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In addition, various non-practicing entities that own patents and other

intellectual property rights often attempt to aggressively

assert claims in order to extract payments from technology companies.


From time to time we have received, and may receive in the future,

claims from third parties which allege that we have infringed upon their
intellectual property rights. Furthermore, from time to time we may

introduce new products and services, including in areas where we currently


do not have an offering, which could increase our exposure to

patent and other intellectual property claims from competitors and nonpracticing entities. Some of our agreements with advertisers, platform

partners and data partners require us to indemnify them for certain


intellectual property claims against them, which could require us to incur

considerable costs in defending such claims, and may require us to pay


significant damages in the event of an adverse ruling. Such advertisers,

platform partners and data partners may also discontinue use of our
products, services and technologies as a result of injunctions or otherwise,

which could result in loss of revenue and adversely impact our business.

As we face increasing competition and gain an increasingly high profile,


patents and other intellectual property claims against us

may grow. There may be intellectual property or other rights held by others,
including issued or pending patents, that cover significant aspects

of our products and services, and we cannot be sure that we are not
infringing or violating, and have not infringed or violated, any third-party

intellectual property rights or that we will not be held to have done so or be


accused of doing so in the future. Any claim or litigation alleging

that we have infringed or otherwise violated intellectual property or other


rights of third parties, with or without merit, and whether or not

settled out of court or determined in our favor, could be time-consuming


and costly to address and resolve, and could divert the time and

attention of our management and technical personnel. Some of our


competitors have substantially greater resources than we do and are able to

sustain the costs of complex intellectual property litigation to a greater


degree and for longer periods of time than we could. The outcome of

any litigation is inherently uncertain, and there can be no assurance that


favorable final outcomes will be obtained. In addition, plaintiffs may

seek, and we may become subject to, preliminary or provisional rulings in


the course of any such litigation, including potential preliminary

injunctions requiring us to cease some or all of our operations. We may


decide to settle such lawsuits and disputes on terms that are

unfavorable to us. Similarly, if any litigation to which we are a party is


resolved adversely, we may be subject to an unfavorable judgment that

may not be reversed upon appeal. The terms of such a settlement or


judgment may require us to cease some or all of our operations or pay

substantial amounts to the other party. In addition, we may have to seek a


license to continue practices found to be in violation of a third

partys rights. If we are required or choose to enter into royalty or licensing


arrangements, such arrangements may not be available on

reasonable terms, or at all, and may significantly increase our operating


costs and expenses. As a result, we may also be required to develop or

procure alternative non-infringing technology or discontinue use of the


technology. The development or procurement of alternative noninfringing technology could require significant effort and expense or may not
be feasible. An unfavorable resolution of any disputes and

litigation could adversely affect our business, financial condition and results
of operations.

Fluctuation of the value of the Japanese yen against certain foreign


currencies may have a material adverse effect on the results of our

operations.

Some of our foreign operations functional currencies are not the Japanese
yen, and the financial statements of such foreign

operations prepared initially using their functional currencies are translated


into Japanese yen. Since the currency in which sales are recorded

may not be the same as the currency in which expenses are incurred,
foreign exchange rate fluctuations may materially affect our results of

operations. In 2013, 2014, 2015 and the first three months of 2016, 13.1%,
24.2%, 29.6% and 28.9%, respectively, of our revenues were

derived from markets outside of Japan, and we expect that an increasing


portion of our revenues and expenses in the future will be

denominated in currencies other than the Japanese yen. Accordingly, our


consolidated financial results and assets and liabilities may be

materially affected by changes in the exchange rates of foreign currencies in


which we conduct our business. We strive to naturally offset our

foreign exchange risk by matching foreign currency receivables with our


foreign currency payables, and our overseas subsidiaries seek to

conduct business transactions in the local currency of the respective market


in which the transactions occur. When deemed appropriate, we

also selectively use derivative contracts, primarily foreign currency forward


contracts. However, there can be no assurance that our hedging

activities will be successful in protecting us from adverse impacts from


currency exchange rate fluctuations, and fluctuation of the Japanese

yen against certain foreign currencies may have a material adverse effect
on our results of operations. See Managements Discussion and

Analysis of Financial Condition and Results of Operations Market Risk


Exchange Rate Risk for a discussion of our foreign currency

exposure and sensitivity analysis.

We may have exposure to greater than anticipated tax liabilities.

Our income tax obligations are based on our corporate operating structure
and intercompany arrangements, including the manner in

which we develop, value, and use our intellectual property and the
valuations of our intercompany transactions. The tax laws applicable to our

business activities, including the laws of Japan and other jurisdictions, are
subject to interpretation. The taxing authorities of the jurisdictions

in which we operate may challenge our methodologies for valuing


developed technology or intercompany arrangements, which could increase

our worldwide effective tax rate and harm our financial position and results
of operations. In addition, our future income taxes could be

adversely affected by earnings being lower than anticipated in jurisdictions


that have lower statutory tax rates and higher than anticipated in

jurisdictions that have higher statutory tax rates, by changes in the


valuation of our deferred tax assets and liabilities, or by changes in tax laws,

regulations or accounting principles. We are subject to regular review and


audit by tax authorities of various jurisdictions in which we operate.

Any adverse outcome of such a review or audit could have a negative effect
on our financial position and results of operations. In addition, the

determination of our worldwide provision for income taxes and other tax
liabilities requires significant judgment by management, and there are

many transactions where the ultimate tax determination is uncertain.


Although we believe that our estimates are reasonable, the ultimate tax

outcome may differ from the amounts recorded in our financial statements
and may materially affect our financial results in the period or

periods for which such determination is made.

We may be classified as a passive foreign investment company for U.S.


federal income tax purposes, which could subject U.S. investors

in shares of our common stock or ADSs to adverse tax consequences, which


may be significant.

We will be classified as a passive foreign investment company (a PFIC) in


any taxable year in which, after taking into account

our income and gross assets (and the income and assets of our subsidiaries
pursuant to applicable look-through rules) either (i) 75% or more

of our gross income consists of certain types of passive income or (ii) 50%
or more of the average quarterly value of our assets is

attributable to passive assets (assets that produce or are held for the
production of passive income). We believe that we were not a PFIC for

U.S. federal income tax purposes in 2015 and do not expect to be a PFIC in
subsequent taxable years. PFIC status is a factual determination

made annually after the close of each taxable year on the basis of the
composition of our income and the value of our active versus passive

assets. Because our belief is based in part on the expected market value of
our equity, a decrease in the trading price of our common stock and

ADSs following this offering may result in our becoming a PFIC. Additionally,
the overall level of our passive assets will be significantly

affected by changes in the amount of our cash, cash equivalents and


securities held for investment, each of which may be classified as passive

assets under the PFIC rules.

If we were to be or become classified as a PFIC, a U.S. Holder, as defined in


Taxation United States Federal Income Taxation,

that does not make a mark to market election may incur significantly
increased U.S. income tax on gain recognized on the sale or other

disposition of shares of our common stock or ADSs and on the receipt of


distributions on the shares of our common stock or ADSs to the

extent such distribution is treated as an excess distribution under the U.S.


federal income tax rules. We do not intend to provide holders with

the information necessary to make a QEF election (as described below


under Taxation United States Federal Income Taxation

Passive Foreign Investment Company). Thus, a U.S. Holder seeking to


mitigate the potential adverse effects of the PFIC rules should

consider making a mark to market election. Additionally, if we were to be or


become classified as a PFIC, a U.S. Holder of shares of our

common stock or ADSs will be subject to additional U.S. tax form filing
requirements, and the statute of limitations for collections may be

suspended if the U.S. Holder does not file the appropriate form. See
Taxation United States Federal Income Taxation Passive Foreign

Investment Company.

Rights of shareholders under Japanese law may be different from rights of


shareholders in other jurisdictions.

Our articles of incorporation and the Companies Act of Japan (the


Companies Act) govern our corporate affairs. Legal principles

relating to matters such as the validity of corporate procedures, directors


and executive officers fiduciary duties and obligations and

shareholders rights under Japanese law may be different from, or less


clearly defined than, those that would apply to a company incorporated

in any other jurisdiction. Shareholders rights under Japanese law may not
be as extensive as shareholders rights under the law of other

countries. For example, under the Companies Act, only holders of 3% or


more of our total voting rights or our outstanding shares are entitled

to examine our accounting books and records. Furthermore, there is a


degree of uncertainty as to what duties the directors of a Japanese joint

stock corporation may have in response to an unsolicited takeover bid, and


such uncertainty may be more pronounced than that in other

jurisdictions.

Dividend payments and the amount you may realize upon a sale of shares of
our common stock or ADSs that you hold will be affected

by fluctuations in the exchange rate between the U.S. dollar and the
Japanese yen.

Cash dividends, if any, in respect of the shares of our common stock


represented by our ADSs will be paid to the depositary in

Japanese yen and then converted by the depositary into U.S. dollars, subject
to certain conditions. Accordingly, fluctuations in the exchange

rate between the Japanese yen and the U.S. dollar will affect, among other
things, the amounts a holder of ADSs will receive from the

depositary in respect of dividends, the U.S. dollar value of the proceeds that
a holder of ADSs would receive upon sale in Japan of the shares

of our common stock obtained upon surrender of ADSs and the secondary
market price of ADSs. Such fluctuations will also affect the U.S.

dollar value of dividends and sales proceeds received by holders of shares of


our common stock.

Daily price range limitations imposed by the Tokyo Stock Exchange may
prevent you from selling shares of our common stock at a

particular price on a particular trading day, or at all.

Share prices on the Tokyo Stock Exchange are determined on a real-time


basis by the balance between bids and offers. The Tokyo

Stock Exchange is an order-driven market without specialists or market


makers to guide price formation. To prevent excessive volatility, the

Tokyo Stock Exchange sets daily upward and downward price range
limitations for each listed stock based on the previous days closing price

or any special quote, a price indicated by the Tokyo Stock Exchange to


notify investors that there are orders beyond such price that may

result in a large price fluctuation. Although transactions may continue at the


upward or downward limit price if the limit is reached on a

particular trading day, no transactions may take place outside these limits.
Consequently, an investor wishing to sell shares of our common

stock at a price above or below the relevant daily limit may not be able to
effect a sale at such price on a particular trading day, or at all.

USE OF PROCEEDS

We estimate that we will receive net proceeds from the sale of shares of our
common stock (including shares represented by ADSs)

in the global offering of approximately 101,236,000,000 after deducting


the estimated underwriting discounts and commissions and estimated

offering expenses payable by us. This estimate is based upon an assumed


initial offering price of 3,100 per share in the global offering, which

is the midpoint of the estimated offering price range shown on the front
cover page of this prospectus. The international underwriters will

purchase shares from us in Japanese yen, including for the portion of shares
that will be represented by ADSs. If Morgan Stanley & Co. LLC,

as representative of the international underwriters, and Nomura Securities


Co., Ltd., as representative of the Japanese underwriters, exercise in

full their options, in the aggregate, to purchase up to an additional


5,250,000 shares, we estimate that we will receive net proceeds of

approximately 116,779,000,000 after deducting the estimated


underwriting discounts and commissions and estimated offering expenses

payable by us.

A 100 increase (decrease) in the assumed initial public offering price of


3,100 per share would increase (decrease) the net proceeds

of this offering to us by 3,342,000,000, assuming that the number of


shares offered by us, as set forth on the front cover page of this

prospectus, remains the same and after deducting the estimated


underwriting discounts and commissions and the estimated offering
expenses

payable by us.

The primary purposes of the global offering are financing our business
expansion, which may include investment, acquisition or

strategic cooperation to expand our user base or procure additional content


for the LINE platform, marketing new products and services and

for other general corporate purposes. In addition, we intend to use a portion


of the net proceeds from this offering to repay 42,000 million in

loans, all due between July and September 2016, with interest rates
between 0.07% and 0.18%, including 5,000 million in short-term

borrowings we obtained in August 2015 primarily for income tax payments.

We have no agreements or commitments for particular uses of the net


proceeds from this global offering, and our management may

exercise discretion over the terms and timing of any future transaction in
light of the changing needs of our business. In the meantime, we

intend to hold any net proceeds in cash or invest them in short-term,


investment-grade, interest-bearing instruments.

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