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Comment by chaz | Hacker News Reader

LINE, a free messaging app in Japan, made $194m in a single quarter, and its high margin business continues to grow fast. It's monetized through virtual goods and partnerships. And yet, it's nearly unheard of in the US.

I'm not sure if SnapChat is a winner and if their multi-billion dollar valuation is correct, but there's there's still whitespace in the market and plenty of money to be made.

http://www.techinasia.com/line-app-financials-q3-2013-sees-r...

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LINE makes 80% of its revenue from stickers (20%) and games (60%). I can't see stickers as a workable revenue model outside of Asia. As for games, it may work, but I don't think Westerners like the idea of integrating their games into their messaging apps/services. After all, Facebook tried this with games, but nowadays people prefer to play standalone game apps on their mobile devices.

I'm thinking less about Zynga-like in-browser games, and more like Candy Crush (solo game but it's arguably more fun with others, and def faster/cheaper) and Quiz Up (obv a two person game). For the same user, they'll have different friends lists on SnapChat vs Facebook, and may want to play games more with former vs the latter.

Agree about sticker, but other virtual goods are open. Farmville was rumored to be making $1m a day, and I believe it. Who knows what other iterations we'll see.

> I can't see stickers as a workable revenue model outside of Asia.

Asia is a HUGE market.

It's also notoriously difficult to break into (in the software space) for Western companies. With Japan, there's the isolationist culture, and with China, there's the Great Firewall.

Disagree with stickers. Everyone I know uses them constantly. A friend of mine has the cat with birthday hat as a tattoo.

Stickers are as crazy as hats.

For those who did not get the reference, Valve paid out 400K$ in the first week of 2014 [1] to item creators for Team Fortress 2 and Dota 2, which are purely cosmetic video game items ("hats") [2].

[1] http://steamdb.info/blog/43/

[2] http://ca.ign.com/articles/2013/04/16/how-to-make-a-living-s...

And one of LINE's core business is being a (mobile) video game storefront.

What is sticker in this context?

Yeah, I don't see it. This is Dot Com Bubble 2.0. Nothing but hype. I don't care how many teenage eyeballs SnapChat has. You don't suddenly become Tencent or LINE or whatever tomorrow's out-of-the-ass comparison will be. SnapChat is going to have an uphill battle moving their users to anything that is not a simple picture transferring app. And they only have so much time left. If there is one thing teenagers do not do, it is use something past its trend expiration date. The fact that SnapChat hasn't been monetized yet probably means it's already too late and they have no clue where they are going with it, other than hoping to get bought out for an even more outrageous sum of money.

The challenge for SnapChat is to shift from novelty and entertainment to utility. Facebook was fun early on, especially when adding friends and reconnecting with old ones that you hadn't talked to in 10+ years. However, it's shifted to more of a utility for sharing photos and keeping loose tabs on family and friends. SnapChat needs to bridge that, and it can enjoy life far beyond a fad.

> SnapChat is going to have an uphill battle moving their users to anything that is not a simple picture transferring app.

SnapChat is kind of being used as a text messaging app already. That's been my observation of young users, and Bryce Roberts mentioned this as well: https://twitter.com/bryce/status/424600001868599296 (not that a VC has a crystal ball, but it summed up my thoughts.). I think older folks have written if off as an Instagram substitute and the young crowd is only interested in it because it's trendy.

LINE is big here (Uruguay, South America), it's not used in the U.S.?

Not really, nope. Very small user base here comparatively. LINE and KakaoTalk were huge in Korea when I was there last but when I came here no one had even heard of them.

I believe that Whatsapp and Groupme are the two popular apps in the U.S. I personally use both, but prefer Whatsapp and use Groupme only because my workplace does.

WhatsApp is really big in some European countries, especially Spain. But apps provide a non-exclusive messaging market, so I suspect people can fairly easily switch to alternatives.

WhatsApp is huge here as well, but many people started using LINE after the 1 dollar scare (99% of users here literally can't pay because of the lack of international credit cards).

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