Naver focuses on enterprise messaging, AI services to secure growth in Japan after Line ordeal

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Naver focuses on enterprise messaging, AI services to secure growth in Japan after Line ordeal

Published: 12 Jul. 2025, 07:00

Audio report: written by reporters, read by AI

Kim Yu-won, CEO of Naver Cloud, speaks about the future direction of the company’s business in Japan at a hotel in Osaka on July 9. [NAVER CLOUD]

Naver is ramping up its business in Japan with a focus on enterprise messaging and AI-driven services, seeking to secure long-term growth after weathering last year’s turbulence surrounding Line Yahoo.

The Line Yahoo ordeal — where the Japanese government pressured Naver to reduce its stake in Line, a messaging app popular in the country — threatened to destabilize Naver’s operations in Japan, but the fallout proved smaller than feared.

Still, the Korean tech giant is preparing for a future where it might need to stand on its own.

What's the deal?

Speaking to reporters Wednesday at a hotel in Osaka, Kim Yu-won, CEO of Naver Cloud, laid out the company’s plans for its business-to-business (B2B) projects in Japan.

Naver has maintained the top spot in Japan’s paid enterprise messaging market for seven straight years since 2017, according to research firm Fuji Chimera. Now it aims to build on that with two key initiatives: transitioning its Line Works platform into an AI-powered service, and expanding its AI CareCall program — marketed as Clova CareCall in Korea — which helps check on older people living alone.

“We’re combining AI with on-the-ground operations in Japan’s slow-to-digitize sectors, fundamentally transforming work in the process. These two services will set a new milestone for Naver’s business in Japan,” Kim said.

Naver faced one of its biggest challenges in Japan last year when the Japanese government pushed Line Yahoo to break away technologically from Naver and pressed for Naver to reduce its stake.

While the episode rattled nerves, it ultimately didn’t hit as hard as many feared. Naver has kept its stake in Line Yahoo and even took home a hefty dividend of 706.6 billion won ($515 million) last year.

Although Line Yahoo is moving ahead with plans to become technologically independent, Naver still expects to earn revenue from technology licensing until the separation fully takes shape.

“We think the concerns tied to Line are now resolved,” Kim said. “But from here on out, we’ll run our Japan businesses clearly separate from Line.”

An older resident living alone in Izumo, a city in Shimane Prefecture, Japan, uses Naver Cloud's AI CareCall service. The firm launched a pilot project for the AI service with the city. [NAVER CLOUD]

Finding success in Japan

Naver Cloud made an early bet on Japan’s workplace culture a decade ago, recognizing how deeply Japanese employees separate personal and professional spheres. It launched Line Works as a dedicated business messenger, targeting mobile and field operations that global giants like Google and Microsoft largely overlooked.

The strategy paid off. As of January, Line Works served 590,000 corporate clients and had 5.8 million users.

Shimaoka Takeshi, head of Line Works Corporation, said, “We added features tailored to workers in the field, like mobile-based attendance and inventory tracking, so even employees with low digital literacy could use the service without special training. That proved hugely effective.”

Looking ahead, Naver Cloud plans to embed more AI into Line Works. The platform will soon feature an “AI Agent,” which analyzes chats, emails, and calendars to automatically handle repetitive tasks, such as daily reports.

The company also plans to roll out its AI CareCall program nationwide in Japan. The service utilizes AI to monitor older residents and identify any unusual signs.

About 140 local governments in Korea are already using it, which Kim said proves its reliability. In Japan, Naver recently completed a successful pilot in Izumo, a city in Shimane Prefecture known for its aging population.

Naver Cloud executive Kim Dong-hoe explained the local need: “A manager in Izumo might oversee nearly 70 seniors, meaning they only call once or twice a month and can’t hire more staff. Our AI CareCall checks around 40 detailed health and lifestyle items each time, then generates a report. That’s why it’s gotten such a strong response there.”

Kim Yu-won, CEO of Naver Cloud, shares the firm's business plans in Japan at a hotel in Osaka on July 9. [YONHAP]

Japan’s outsized role for Naver

Japan is more than just another overseas market for Naver. It’s where founder and chair Lee Hae-jin personally championed Line into the ranks of Japan’s national messaging apps.

Last year, Naver’s revenue from Japan reached 899.3 billion won, accounting for 59 percent of its 1.53 trillion won global revenue.

Naver had initially hoped to scale up its Japanese business by partnering more closely with SoftBank, which runs Yahoo Japan. But after the Line Yahoo crisis, it now faces the task of building out stand-alone models.

“Solving each country’s social issues through technology is what we mean by sovereign AI,” Kim Yu-won said. “Based on what we’ve achieved in Japan, we’ll expand to other countries facing similar challenges.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KANG KWANG-WOO [[email protected]]