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Line Builds $15 Billion Value With Teddy Bears, Wicked Witches

How do you create a $15 billion company in an industry that gives its primary product away? Line Corp. did it by getting smartphone users to pay for teddy bear icons and games with cute cookies and wicked witches.

The Tokyo-based messaging application has grown to more than 370 million subscribers since its creation in 2011, when South Korean parent Naver Corp. saw a need for Internet-based communications after an earthquake crippled Japan’s phone networks. Now after Facebook Inc. agreed to buy rival WhatsApp Inc., Line is drawing interest, too. The Japanese mobile-phone carrier SoftBank Corp. is seeking to take a stake in the company, people familiar with the matter said this week.