Naver to spin off mobile photo editing app Snow

By Lee Gyung-jin and Oh Chan-jong

South Korea’s biggest internet portal Naver Corp. said Thursday that it will spin off its burgeoning mobile video messaging and photo editing app Snow as a separate company to replicate success of LINE, its Japanese mobile messaging app that turned huge to go public in Tokyo and New York.

In a conference call Thursday, the Korean web giant said it raked in 213.2 billion won ($241.7 million) in net profit, up 71.8 percent from a year ago. Operating profit rose 44 percent on year to 272.7 billion won in the April - June period. Revenue also totaled 987.3 billion won, up 26.3 percent on year and 5.3 percent against the first quarter, largely driven by soaring advertising revenue on the raging popularity of LINE.

Thanks to LINE, - the chat app with around 220 million monthly active users mostly based in Asia - its revenue from advertising segment reached 722.9 billion won in the second quarter, up 29.4 percent from a year ago and 7.5 percent on quarter. The mobile chat app, along with other services, also lifted income from the mobile platform to 608.7 billion won to make up 62 percent of its total revenue. The share has been on the rise since it hit 51 percent in the second quarter last year.

To bolster its mobile advertising business, Naver launched an advertising platform early this month. Park Sang-jin, its chief financial officer said the company will add diverse advertising products onto the platform which would bolster revenue from next year.

LINE has strengthened the company’s overseas front. Revenue from overseas totaled 349.7 billion in the second quarter, making up 35 percent of the firm’s total revenue and mostly coming from advertising, which rose 99 percent from a year ago.

Naver envisions blockbuster hit with its mobile video messaging and photo editing app Snow. Chief executive officer Kim Sang-hun said Thursday after the second-quarter earnings release that the company decided to spin off Snow - whose downloads surpassed 40 million in less than a year since its launch - in hopes of making it into a global hit like LINE. He added that the app will add more channels and grow in size through joint efforts with media companies.

Naver’s “V Live,” interactive social platform with celebrities and Naver “Webtoon” are also gaining popularity worldwide. The app, with 170 channels that air unique content in real time all over the world, will be made more and more intriguing, Kim said. Shares in Naver closed at 710,000 won Thursday, down 0.28 percent from the previous session.

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