What is the main revenue source composition after the merger? What are the respective proportions of advertising, e-commerce, and financial services?
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Okay, let me break down the revenue structure for you after the LINE and Yahoo merger (LY Corporation) in a straightforward way.
Think of the merged LY Corp as a massive online lifestyle hub. This hub makes money through several distinct zones. Currently, its main revenue streams fall into three major buckets: Commerce, Advertising, and Finance.
Based on the latest financial data (e.g., FY2023, meaning data up to March 2024), the approximate revenue breakdown looks like this:
Revenue Share by Business Segment
| Business Segment | Analogy | Approx. Revenue Share |
|---|---|---|
| Commerce | Shopping Malls & Marketplaces | ~ 45% |
| Media / Ads | Billboards & Flyers | ~ 40% |
| Strategic / Finance | Banks & New Business Incubator | ~ 15% |
Note: This ratio is based on estimated figures from financial reports and may fluctuate slightly between quarters, but the overall structure remains consistent.
What does each segment actually do?
1. Commerce - The Largest Revenue Source
- Share: ~ 45%
- Simply Put: Revenue generated from our everyday online shopping ("buying sprees").
- Think of it as operating huge online shopping malls and flea markets. When you buy things through Yahoo! Shopping, ZOZOTOWN (Japan's largest fashion e-commerce site), ASKUL (office supplies), or bid on items on Yahoo! Auctions, the platform takes a cut through commissions or merchant fees. This is currently the most profitable part of the business and serves as the anchor of the company's revenue.
2. Media / Ads - The Second Largest Revenue Source
- Share: ~ 40%
- Simply Put: Revenue comes from showing advertisements to users.
- This is like the billboards and promotional flyers in a mall. It includes the "promoted" links you see when searching on Yahoo! Japan (search ads), the images or video ads alongside news and web content (display ads), and messages pushed by business accounts on LINE (LINE ads). With their massive user base using their services consistently, advertising revenue provides a stable income stream.
3. Strategic / Finance - The Growth Engine
- Share: ~ 15%
- Simply Put: Revenue generated by providing financial services like payments, credit cards, and banking.
- This is a segment with huge future potential for the company. While currently the smallest contributor, it's growing rapidly. The centerpiece is the well-known PayPay.
- Payment Services: Every time you scan to pay with PayPay, merchants pay PayPay a small transaction fee. It might seem tiny per transaction, but they add up significantly.
- Other Financial Services: They've launched PayPay Credit Card, PayPay Bank, PayPay Insurance, etc. They earn interest and fees from credit card usage, and they generate revenue from deposited funds within their bank. This segment is key to building their "economic ecosystem" and creating a closed loop.
To Summarize
LY Corp's current revenue structure is clear:
- Commerce and Advertising are the core pillars, together comprising about 85% of company revenue and forming the solid foundation of its operations. You can think of this as Commerce generating transaction fees and Advertising selling ad space (like "rental income").
- Finance is the future growth engine. Their ultimate goal is to have you see ads on their platforms (Media), shop in their marketplace (Commerce), and pay with their financial tools (Finance), keeping your entire consumption cycle within their ecosystem.
So, if you're wondering about the biggest change post-merger? It's leveraging LINE's social network and Yahoo's media and commerce strengths to integrate these three segments more tightly, aiming for a synergistic effect where "1+1 > 2".