NHN may transform into holding firm: sources

Speculations are rising that NHN, the operator of Naver, may transform into a holding company as it is expected to newly establish a subsidiary taking control of its mobile businesses.

The creation of a new company focusing on mobile-related projects will reportedly become the main topic of discussion during its board meeting next month.

According to industry sources, the new organization, which will be set up as early as March, will be formed as a subsidiary of NHN. It is also projected to be made of 200 employees and located at the Gangnam Finance Center in southern Seoul. 

While putting the mobile businesses as NHN’s top priority for this year, the newcomer will lead services involving gaming, online shopping, digital contents and music, they said.

This comes in line with the firm’s recent moves to concentrate on projects like its mobile messenger service Line as well as the Web novel content platform it announced this week.

With such business schemes in place for the nation’s largest search engine, there are assumptions that NHN may make its move into a holdings company by separating the mobile business unit and possibly spinning off its online gaming unit Hangame.

“We have nothing much to say since nothing has been confirmed at this point. But such reports are nothing new,” said an NHN official.

Similar rumors heated up the industry when NHN divided its advertising platform and sales with its infrastructure sector to set up what was called the NHN Business Platform in 2009.

However, significant moves that signal its transformation into a holdings firm has not been made by NHN since then.

If NHN makes the switch into a holdings company, it reduces the risk for owners and adds strength to the management rights of the firm’s biggest stakeholder. It can also claim cash dividends from its subsidiaries.

By Cho Ji-hyun (sharon@heraldcorp.com)