was a Japanese company that functioned as an

Internet service provider An Internet service provider (ISP) is an organization that provides a myriad of services related to accessing, using, managing, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, no ...

and operator of a

web portal A web portal is a specially designed website that brings information from diverse sources, like emails, online forums and search engines, together in a uniform way. Usually, each information source gets its dedicated area on the page for displayin ...

and

blog A blog (a Clipping (morphology), truncation of "weblog") is an informational website consisting of discrete, often informal diary-style text entries also known as posts. Posts are typically displayed in Reverse chronology, reverse chronologic ...

platform before being brought down by a scandal in 2006. The company was founded and led in its first 10 years by Takafumi Horie, known as "Horiemon" in Japan. Livedoor grew into one of Japan's premier Internet businesses, putting over 1,000 employees on its payroll at its peak. Its reliance on acquisitions and stock swap mergers to achieve growth also made it one of the country's most controversial enterprises. Its growth came to a resounding halt when scandal erupted in early 2006. An investigation of securities law violations led to a nosedive in the company's stock price. The Tokyo Stock Exchange delisted Livedoor on April 14, 2006. The floundering company's properties were purchased by

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...

based NHN Corporation in 2010. The ISP and

services that bear the Livedoor name used to be operated by Line Corporation, developers of Line messaging services and the Naver Japan search portal from 2012 - 2022. Line Corporation, based in Japan, was spun off from NHN Japan, an arm of its Korean parent, in February 2013. In 2022, Livedoor was sold to . In February of the same year, its founder Takafumi Horie became executive advisor to livedoor.

History

Origins and growth

Livedoor began in 1995 as Livin' on the Edge, a

startup A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses that do not intend to ...

company run by Horie and a group of college friends and was officially founded as Livin' On the EDGE Inc. in April 1996, in Minato, Tokyo. In 1997, it was renamed Livin' On the EDGE Co., Ltd. Though initially a limited company (

yugen kaisha Japanese aesthetics comprise a set of ancient ideals that include ''Wabi-sabi, wabi'' (transient and stark beauty), ''Wabi-sabi, sabi'' (the beauty of natural patina and aging), and ''yūgen'' (profound grace and subtlety). These ideals, and other ...

), Livin' On the Edge was reorganized into a

joint-stock company A joint-stock company (JSC) is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareho ...

(''

kabushiki kaisha A or ''kabushiki kaisha'', commonly abbreviated K.K. or KK, is a type of defined under the Companies Act of Japan. The term is often translated as "stock company", "joint-stock company" or "stock corporation". The term ''kabushiki gaisha'' i ...

'') in July 1997 and within only 3 years, went public on the

Tokyo Stock Exchange The , abbreviated as Tosho () or TSE/TYO, is a stock exchange located in Tokyo, Japan. The exchange is owned by Japan Exchange Group (JPX), a holding company that it also lists (), and operated by Tokyo Stock Exchange, Inc., a wholly owned sub ...

'
Mothers
market in April 2000. In November 2002, Livin' on the Edge acquired the free Internet services business of Livedoor Corp., which had gone bankrupt. Livin' On the Edge changed its name to Edge Co., Ltd. in April 2003, then adopted the name of the ISP business it had acquired from Livedoor Corp., by renaming itself livedoor Co. Ltd. (Livedoor), in February 2004. This was followed by a 1:100 stock split. In March 2004, during the 2004 Nippon Professional Baseball realignment, Livedoor moved to acquire the Kintetsu Buffaloes, a Japanese

baseball Baseball is a bat-and-ball games, bat-and-ball sport played between two team sport, teams of nine players each, taking turns batting (baseball), batting and Fielding (baseball), fielding. The game occurs over the course of several Pitch ...

team, but later withdrew its offer and, in September 2004, founded its own team (named ''livedoor baseball'') and applied for admittance to Japan's professional baseball organization. The team's home ground was to be in Sendai, Miyagi Prefecture, but livedoor lost the competition to be the city's home team to Rakuten, a Japanese

e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...

company; the team became the Tohoku Rakuten Golden Eagles and began play in

2005 2005 was designated as the International Year for Sport and Physical Education and the International Year of Microcredit. The beginning of 2005 also marked the end of the International Decade of the World's Indigenous Peoples, Internationa ...

. Livedoor acquisitions in the U.S. include
MailCreations in Miami, Florida, in June 2004
which functioned as the company's U.S. headquarters. Livedoor entered search and contextual advertising spaces in America in November 2005. A scandal involving securities law violations led the Tokyo Stock Exchange to delist Livedoor on April 14, 2006.

Allegations

The case broke on January 16, 2006, when Tokyo

prosecutor A prosecutor is a legal representative of the prosecution in states with either the adversarial system, which is adopted in common law, or inquisitorial system, which is adopted in Civil law (legal system), civil law. The prosecution is the ...

s raided several Livedoor locations, Horie's home, and the homes of other Livedoor and subsidiary executives on suspicions of

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information.panic selling on the

. Some brokers announced they would no longer allow use of the issue for

margin Margin may refer to: Physical or graphical edges *Margin (typography), the white space that surrounds the content of a page * Continental margin, the zone of the ocean floor that separates the thin oceanic crust from thick continental crust *Leaf ...

trading. Volume was so heavy that it threatened to overload the TSE's computer system, prompting a halt in trading for the entire market—a breaking record and the first time this has ever occurred. The TSE ordered Livedoor to provide a formal response to the allegations. When the company filed a hasty report after a quick internal investigation, the TSE told executives to provide a more detailed report and threatened to delist Livedoor if allegations of improper activities proved valid. On January 18, 2006, Hideaki Noguchi, an executive of H.S. Securities, a firm raided by prosecutors earlier in the week in connection with Livedoor, was found dead in a

Naha is the Cities of Japan, capital city of Okinawa Prefecture, the southernmost prefecture of Japan. As of 1 June 2019, the city has an estimated population of 317,405 and a population density of 7,939 people per km2 (20,562 persons per sq. mi.). ...

, Okinawa hotel room in what the authorities labeled a

suicide Suicide is the act of intentionally causing one's own death. Risk factors for suicide include mental disorders, physical disorders, and substance abuse. Some suicides are impulsive acts driven by stress (such as from financial or ac ...

. The authorities called in several Livedoor and subsidiary executives for questioning over several days, and Horie himself on January 23. After several hours of questioning Horie, investigators felt they had learned enough to press charges and petitioned for four

arrest warrant An arrest warrant is a warrant issued by a judge or magistrate on behalf of the state which authorizes the arrest and detention of an individual or the search and seizure of an individual's property. Canada Arrest warrants are issued by a jud ...

s, which were granted. Horie, Livedoor's chief financial officer, and the presidents of two subsidiaries were arrested mid-evening for securities and accounting fraud. They were held for two months without bail, and during this time, Livedoor's temporary Representative Director Fumito Kumagai was also arrested. Japan's Securities Commission filed a criminal complaint against the five arrested ex-executives of the company on March 13, 2006. Founder Horie was sentenced to 2.5 years in jail on March 16, 2007. Others were given various jail sentences four days later but appealed.

Aftermath

After losing 90% of its stock price in four months and strong evidence of securities fraud, Livedoor was delisted from the Tokyo Stock Exchange on April 14, 2006. Fuji Television sued the company for ¥35 billion in damages in March 2007; 1,000 individual investors filed a class-action suit in May 2006, eventually rising to 3,340 asking for ¥23 billion, which resulted in a final ruling of ¥7.6 billion against Livedoor, and other similar suits resulted at least one judgment of ¥4.9 billion. Livedoor in turn sued its own executives, with founder Horie settling for ¥21 billion and six others settling for a total of ¥760 million. Information obtained during the investigation led to the arrest and conviction of fund manager Yoshiaki Murakami for using inside information to profit off of a stake Livedoor purchased in Nippon Broadcasting System in 2005. Horie published an autobiography during his appeals, ''Complete Resistance'', in which he proclaims his innocence and states that he was being targeted only due to his infamy, not the actual nature or severity of any crimes. The veracity of the suspicions aside, many smelled conspiracy given the timing of the action. It was seen as a political move by defenders of the status quo to punish Horie for daring to challenge them, and to discredit him and the business practices he had come to represent, which Horie's opponents considered distasteful and "un-Japanese." In order to prevent a recurrence of the scandal, Japan passed a law similar to Sarbanes–Oxley, nicknamed J-SOX, on June 14, 2006.

Livedoor Holdings

In 2007, the company spun off to create a new subsidiary that retained the name of "Livedoor" and most of its portal-related businesses and itself became a pure holding company named " Livedoor Holdings" that oversaw the legal and financial management of its subsidiaries (reportedly 44 subsidiaries as of the end of 2005) including the new Livedoor. In 2008, Livedoor Holdings changed its name to "LDH Corporation."

Sale

During the upheaval in 2006 and 2007 rumors spread that Livedoor was preparing a $2 billion initial public offering in 2008. Several technology companies expressed interest in participating but the IPO never materialized. Livedoor instead put itself up for sale. In early 2010

-based NHN Corporation bought Livedoor for a reported ¥6.3 billion.

Liquidation

After completing the sale of Livedoor and other subsidiaries and paying dividends to its shareholders, LDH Corporation entered into voluntary liquidation by the shareholders' resolution in August 2011 and completed liquidation in December 2012 after distributing residual assets to its shareholders.

Offices

The headquarters of the original Livedoor company were located in the in Nishi-Shinjuku,

Shinjuku , officially called Shinjuku City, is a special ward of Tokyo, Japan. It is a major commercial and administrative center, housing the northern half of the busiest railway station in the world ( Shinjuku Station) as well as the Tokyo Metropol ...

Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...

.会社概要 - 会社案内 - 株式会社ライブドア
." Livedoor. Retrieved on December 14, 2011. "〒160-0023 東京都新宿区西新宿7-20-1 住友不動産西新宿ビル24F,25F（総合受付：24F）"
Map
Additional corporate offices were located on the 38th floor of the Roppongi Hills Mori Tower at 10-1,

Roppongi Roppongi (, , 'six trees') is a district of Minato, Tokyo, Minato, Tokyo, Japan, famous for the affluent Roppongi Hills development area and popular night club scene. A few foreign embassies are located near Roppongi, and the night life is popu ...

6-chome, Minato, Tokyo, 106-6138, Japan.

References

External links

* {{Authority control Technology companies established in 1995 Mass media companies established in 1995 Japanese companies established in 1995 Internet properties established in 1995 Companies formerly listed on the Tokyo Stock Exchange Internet technology companies of Japan Blog hosting services Accounting scandals 2010 mergers and acquisitions