What is the company's capital allocation strategy? Will it prioritize investment in R&D, marketing, or strategic acquisitions?

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Answer Content: Okay, regarding LY Corporation's (the well-known company formed by the merger of LINE and Yahoo! JAPAN) capital allocation strategy, let me share my understanding.

Think about it like how a household plans its spending—it's not just saying "we'll only buy groceries this year" or "we'll only travel this year," but rather a portfolio approach. LY Corporation operates similarly; its money goes to several crucial areas, but the emphasis shifts at different times.

We can view its investment strategy as a "three-horse carriage" combination – all three elements are indispensable.

The First Horse: Technology Research & Development (R&D) - The Company's "Engine"

This is the core foundation, determining how fast and how far the company can go in the future.

Why is it important? LINE and Yahoo! are both tech companies; technology is their lifeblood. If they fall behind technologically, user experience suffers, new features lag, and they can quickly be overtaken by competitors.
Specific areas of investment:
- Artificial Intelligence (AI): This is currently the top priority. For example, using AI to improve search results, recommend news or products you might like, and developing generative AI (like ChatGPT) for their own services.
- Data Analytics: LY holds massive amounts of user data (from LINE chats, Yahoo! shopping, etc.). Significant technical investment is needed to use this data securely and effectively to provide more precise services to users.
- Optimization of Existing Services: Ensuring LINE's call quality, stability of Yahoo! Mail, security of PayPay payments, etc. Continuous investment is required for this day-to-day maintenance and upgrading.

Simply put: R&D is like building a top-tier kitchen for a restaurant and constantly developing new dishes. Without this, the restaurant will eventually close down.

The Second Horse: Marketing - The Company's "Megaphone"

Having good products and services isn't enough. You need to make people aware of them and get them to use them.

Why is it important? The market competition is fierce. For example, in the payment sector, PayPay competes with rivals like Rakuten Pay and d払い (d-payment) in Japan. Marketing is essential to attract new users and retain existing ones.
Specific areas of investment:
- Promotional Campaigns: Things like the various cashback promotions you see on PayPay or discounts using LINE Points. This requires real financial investment to encourage more frequent use of their services.
- Brand Advertising: Running ads on TV and online to maintain brand visibility.
- Cross-Promotion: Encouraging LINE users to try Yahoo! Shopping or Yahoo! Mail users to download PayPay. Linking users across their major apps is a key goal stemming from the merger.

Simply put: Marketing is like a restaurant not only making great food but also having attractive decor, grand opening specials, and coupons to draw customers in.

The Third Horse: Strategic Acquisitions (M&A) - The Company's "Booster"

Buying a promising company outright is the fastest way to achieve goals compared to building a new business from scratch.

Why is it important? It enables rapid acquisition of new technology, entry into new markets, or removal of a potential competitor.
Specific areas of investment:
- Completing the Ecosystem: For example, if LY wants to strengthen its logistics capability in e-commerce, it might acquire a logistics company. In fintech, it might buy promising small tech firms to supplement PayPay's functionality.
- Acquiring Talent & Technology: Sometimes, the target isn't the acquired company's business per se, but rather its top-tier development team.

Simply put: A strategic acquisition is like your successful restaurant wanting to add desserts. Instead of spending a year learning how to make them, it's faster to buy the famous dessert shop next door.

Conclusion: Where is the Current Priority?

In my view, LY Corporation's current capital allocation priorities are roughly as follows:

Primary Priority: Technology R&D (especially AI & Internal Service Integration). This is core to achieving the "1+1>2" synergy goal of the merger. They need strong technology to truly integrate LINE, Yahoo!, and PayPay – all massive national apps – and create new value. AI is a crucial battleground for all tech giants, and they won't fall behind.
Secondary Priority: Marketing. This is the essential "fuel" for maintaining daily operations and user growth, requiring consistent and stable investment. This is particularly vital in highly competitive fields like mobile payments and e-commerce, where marketing spend must be sustained.
Tertiary Priority: Strategic Acquisitions. Following such a large merger (LINE & Yahoo!), the company's current focus leans more towards "internal digestion and integration" rather than continued large-scale expansion. Therefore, major strategic acquisitions might be approached cautiously. However, if a very attractive "small but beautiful" opportunity arises – something highly complementary to existing business and not too large – they will certainly pursue it.

To summarize: As a mature large corporation, LY Corporation's capital allocation is a dynamic balancing act. Presently, they are betting heavily on using technology (especially AI) to achieve integration internally and realize synergies, while maintaining necessary marketing investments to solidify their position. As for major acquisitions, these are likely more opportunistic rather than the current main strategy.

I hope this explanation helps you better understand how this major company operates.