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Kakao (Korean: 카카오) is a South Korean Internet company that was established in 2010. It formed as a result of a merger between Daum Communications and Kakao. In 2014, the company was renamed Daum Kakao.[4] The company rebranded once more in 2015, reverting simply to Kakao from Daum Kakao.[5]

Kakao Corporation
Native name
주식회사 카카오
Jusikhoesa Kakao
Public
Traded asKRX: 035720
IndustryInternet
FoundedOctober 1, 2014; 4 years ago (2014-10-01)
HeadquartersJeju City, South Korea
Key people
Kim Beom-soo (Chairman)
Rim Ji-hoon (CEO)
ProductsKakaoTalk, Daum, Path
OwnerAs of January 2016:[1]
Brian Beom-soo Kim (18.80%)
KCUBE Holdings (14.90%)
Tencent Holdings Ltd. (13.54%)[2][3]
Star Invest Holdings Ltd. (8.30%)
WeMade Entertainment Co., Ltd. (3.50%)
SK Planet Co., Ltd. (2.00%)
SubsidiariesKakao M (76.40%)
Kakao Games
Kakao Friends
Kakao Mobility
Path, Inc.
Lycos, Inc.
Websitewww.kakaocorp.com
Kakao
Hangul
카카오
Revised RomanizationKakao
McCune–ReischauerK'ak'ao

In May 2015, the company acquired Path, an American social media company that had become successful in Asia.[6] In January 2016, Kakao acquired a 76.4% stake in LOEN Entertainment, a large South Korean entertainment company, for $1.5 billion.[7] It was later rebranded as Kakao M. The company has gained further prominence from KakaoTalk, a free mobile instant messaging application for smartphones with free text and free call features. By May 2017, the app had 220 million registered users and 47 million active monthly users.[8]

HistoryEdit

2010–2014: Founding of Kakao Corp.Edit

Kakao Corp is the company behind KakaoTalk, which serves as its main platform and flagship application. It was founded in 2010 by Kim Bum-soo, the former CEO of NHN Corporation (the organization that emerged from the Hangame and Naver.com merger).[9] Kakao Corp. is based in Seoul, South Korea. Manson Yeo and Sean Joh serve as the current Co-CEOs.[10]

In August 2013, three of App Annie's Global Top 10 Android games are tied into the KakaoTalk platform—Everybody’s Marble, Cookie Run, and Anipang.[11] With 93 percent of South Korea's users on KakaoTalk, the free downloads of the games Ani Pang and Dragon Flight, which can only be played with a Kakao Talk account, were deemed "national" games. To maintain simplicity across all the provided services, Kakao applications can be purchased and logged in with links to KakaoTalk.[12] Kakao Corp. generated revenue of approximately $200M (USD) through gaming, digital content, mobile commerce, and its marketing channels for brands and celebrities.[13] Kakao Corp. was named a Top Developer on Google's Android Market, and KakaoTalk was chosen as the number one Free SMS App by Cnet.[14]

According to a December 2013 App Annie report, Kakao is the world's third top publisher by monthly revenue at Google Play. Kakao Corp. is the number one publisher for iOS and Google Play in South Korea, and KakaoTalk is the number one app for iOS and Google Play revenue in South Korea.[15] KakaoTalk was nominated for the Most Innovative Mobile App Award at the Global Mobile Awards 2014.[16] Kakao Corp. agreed to buy Daum Communications Corp, to cut costs and save time to jump-start growth and gain a listing in Seoul, South Korea.[17]

Kakao Corp's full suite of apps includes: KakaoTalk, KakaoStory, KakaoTaxi, KakaoAccount, KakaoMap, KakaoDriver, KakaoBus, KakaoMusic, KakaoMusic, KakaoGroup, KakaoHome, KakaoPlace, KakaoAlbum, KakaoPage, KakaoStyle, and KakaoAgit.[18]

2014–2015: Merger of Daum and KakaoEdit

On 26 May 2014, Kakao Corp. announced that it had decided to merge with Daum Communications—one of Korea's top Internet portals—through a stock swap. Once the two firms were combined the emergent company would have a 3 trillion won ($2.9 billion) market capitalization, enabling it to lodge a credible threat to Naver, which is South Korea's biggest web portal.[19] The new entity Daum Kakao was valued close to 10 trillion won (US $9.45 billion).[20]

In 2015, the company changed its name to Kakao. Due to gambling and censorship issues within the Kakao ecosystem, the organization's board of directors ejected Kim-beom-soo as CEO and decided to replace him with Rim Ji-hoon.[21][22][23] Kim Beom-soo become the largest shareholder in the new pro forma company with a 22.2 percent stake.[24]

2015–present: New business modelEdit

On 10 March 2015, Daum Kakao launched their KakaoTaxi service that allows users to call a taxi using the KakaoTaxi application.[25] Thanks to the many taxi companies cooperating with the KakaoTaxi service,[26] about 600,000 taxi-consumers used the ride-hailing platform every day within eight months of its launch.[27]

Internet bankEdit

Kakao was approved by South Korean regulators to become the nation's first Internet-only bank in 2017. The Internet bank engages in the same business as commercial banks, including processing deposits, loans and wiring money. Consumers will no longer need to visit a bank to open a new bank account or to get a loan. Kakao's business plan was considered innovative, and the company's business model was expected to secure sizable customer sign-ups relatively easily, based on the users of KakaoTalk, which is the country's most popular messaging application.[28]

Although K-Bank eventually became South Korea's Internet-only bank having been launched several months prior, Kakao Bank immediately attracted more 820,000 customers within four days of its launch on 27 July 2017.[29] The dedicated Kakao Bank app itself was downloaded 1.5 million times within the same period.[29] The bank had 3.5 million customers after a month.[30] These figures trounced the 400,000 users that K-Bank amassed within 100 days of its existence.[30] By 26 September 2017, Kakao Bank lent ₩1.4 trillion ($1.2 billion), constituting 40 percent of the total loans in all of South Korea for that particular month.[31] The bank's unprecedented expansion is seen as an exception to the closure of banks, particularly foreign-owned institutions. The fledgling performance for these banks is being blamed on the high cost of maintaining brick-and-mortar operations and the popularity of Internet finance among Korean consumers.[31]

Transportation servicesEdit

In November 2015, Kakao launched the taxi business model Kakao T. The service includes the premium extension Kakao Taxi Black, which allows users to book rides in Seoul via the messenger app that is exclusively carried in luxury imported cars such as Mercedes Benz, Lexus, and BMW. Fares for the premium service start at ₩8,000. Kakao announced plans to expand the activity field to other Korean cities within the following year.[32] Kakao announced in April 2019 that they would be launching a e-bike sharing service with an initial fleet of 400 bikes across two major cities[33].

ServicesEdit

KoreaEdit

Kakao provides a diverse set of services.

CommunityEdit

  • KakaoTalk: instant messaging and VoIP service
  • KakaoStory: image, video, and music sharing service
  • KakaoPage: web-based cartoon and novel service
  • KakaoGroup: group chat service with picture, video, and music sharing
  • Plain: mobile blog service
  • Brunch: mobile contents publishing service

EntertainmentEdit

  • KakaoMusic: music app with sharing features
  • Melon: music streaming service acquired through Kakao M
  • PotPlayer: media player for Windows

FashionEdit

FinanceEdit

  • KakaoPay: mobile e-wallet, integrated with KakaoTalk
  • KakaoBank: mobile bank in Korea.
  • Klaytn: consumer blockchain platform for mobile payments (via its subsidiary Ground X)[34]

TransportationEdit

  • Kakao T: transportation service app, providing taxi hailing, chauffeur service and navigation services.
  • KakaoBus: real-time location and traffic information on buses.
  • KakaoMetro: metro line app, option of looking at the metro map, planning your trip, checking the price.

Video GamesEdit

OthersEdit

  • KakaoFriends: diverse products including finance, distribution, foods, and so on
  • KakaoHello: Call app service based on Kakao account
  • KakaoTV: interlocks Kakao TV Live broadcasting and KakaoTalk's open chatting
  • KakaoHome: service, managing Smartphone home display
  • KakaoPlace: service, sharing famous places
  • KakaoAlbum: sharing pictures with Kakao friends
  • Path: US social network service

JapanEdit

Kakao Japan Corporation is the Japanese subsidiary of Kakao. It currently offers some of Kakao's Korean services as well as specific ones for the Japanese market. Kakao Japan has announced plans to launch a music service in a second attempt to penetrate the Japanese market.[35] In April 2018, Kakao Japan announced plans to launch a video streaming service to compete against Netflix and Amazon with a similar pay model to their Piccoma service.[36] The streaming service will be called Piccoma TV.[37]

ControversyEdit

KakaoTalk censorshipEdit

When the announcement by the Korean government that it would tighten its real-time monitoring to prevent people from spreading false information, the company cooperated fully by providing reams of conversation data. KakaoTalk users expressed their displeasure to the censorship saying that they would migrate to other messenger services. Because of this, as many as 1.5 million users are reported to have recently signed up for the hitherto obscure mobile messenger service Telegram, which is known for its security.[38]

Daum Kakao has explained the censorship, saying, "It is unthinkable not to follow the rules in a constitutional country." "The move (by Daum Kakao) reflects users' repulsion and fear against cyber censorship", said Yoo Ki-hong, a spokesman of the main opposition New Politics Alliance for Democracy. "The government should understand the sense of resistance of the people on the issue, rather than justifying its execution of warrants."

Kakao Corp. chairman accused of gamblingEdit

Kakao board chairman Kim Beom-soo was accused of gambling in Las Vegas in the early years of Kakao Corp from 2007–2010. Overseas gambling is illegal under Korean law. Korean prosecutors have reportedly obtained information from the U.S. Department of Justice and the Department of Treasury that Kakao mobile messenger founder Kim had spent 20 hours and 51 minutes at the Bellagio Hotel in Las Vegas in 2007 when he served as NHN Global CEO. He bet an average of $2,440 per session and lost $16,993, Korean Hankook Ilbo newspaper reported.[39] The company decided to comply with the prosecution's warrants requesting monitoring of chatting records, a reversal from its earlier stance.[39]

ReferencesEdit

  1. ^ ""카카오 주주? 로엔 주주?" SK플래닛의 선택은... - 머니투데이 뉴스" [Kakao shares or LOEN shares? SK Planet picks..)]. 머니투데이.
  2. ^ "Tencent Invests US$63M into KakaoTalk the Korean WeChat". TechNode. 17 May 2012.
  3. ^ "Tencent expansion in Asia may be bolstered by Kakao connection". South China Morning Post.
  4. ^ "kakao > About > History". Kakao Corp. Kakao. Archived from the original on 1 October 2015. Retrieved 9 October 2015. Cite uses deprecated parameter |deadurl= (help)
  5. ^ "Daum Kakao Sets Sail Under New Name". The Chosun Ilbo. Seoul. 24 September 2015. Retrieved 9 October 2015.
  6. ^ "Path Sells Its Social Networking App To Daum Kakao". TechCrunch. Retrieved 28 June 2015.
  7. ^ "Kakao acquires Loen". koreatimes. 11 January 2016.
  8. ^ "Kakaotalk: number of monthly active users 2017 - Statistic". Statista.
  9. ^ Kim, Nam Kyu (18 March 2010). "아이위랩, 아이폰용 메신저 '카카오톡' 출시". Economy Today. Archived from the original on 3 October 2013. Retrieved 1 May 2013. Cite uses deprecated parameter |dead-url= (help)
  10. ^ "Kakao". kakaocorp.com (in Korean). Retrieved 19 April 2018.
  11. ^ ACUÑA, ABEL (19 October 2013). "Why is mobile gaming so popular in South Korea?". VentureBeat. Retrieved 13 November 2016.
  12. ^ "KakaoTalk, a Mobile Social Platform". KoreaMarketing.co=22 December 2013. Archived from the original on 11 April 2013. Retrieved 19 May 2014. Cite uses deprecated parameter |deadurl= (help)
  13. ^ "South Korea's Kakao Pushes Boundaries of Social Media". Wall Street Journal. 26 February 2014. Retrieved 21 April 2014.
  14. ^ "Cnet's No.1 Free SMS app KakaoTalk". Cnet. 26 September 2011. Retrieved 26 September 2011.
  15. ^ "App Annie Index: Apps – LINE Tops the Revenue Rankings". AppAnnie. 30 January 2014. Retrieved 20 April 2014.
  16. ^ "Korean Software Recognition". BusinessKorea. 3 February 2014. Retrieved 19 May 2014.
  17. ^ "Kakao Corp Agrees to Buy Daum to Spur Growth, Gain Seoul Listing". Bloomberg. 26 May 2014. Retrieved 19 May 2014.
  18. ^ "Kakao Corp Home". Kakao. 21 April 2014.
  19. ^ "Daum, Kakao announce merger". The Korea Herald. 26 May 2014. Retrieved 11 June 2014.
  20. ^ "Daum and Kakao merge, massive valuation puts them head-to-head with Naver-Line". techinasia. Retrieved 1 October 2014.
  21. ^ "Kakao Changes CEO, Name to Highlight Corporate Identity as Leader in Mobile Market". businesskorea. Archived from the original on 12 January 2016. Retrieved 24 September 2015. Cite uses deprecated parameter |dead-url= (help)
  22. ^ "Daum Kakao to change its name to Kakao". yonhapnews. Retrieved 1 September 2015.
  23. ^ Russell, Jon. "Korea's Daum Kakao Brings In 34-Year-Old CEO To Grow Its Messaging Business Overseas". TechCrunch. Retrieved 1 January 2016.
  24. ^ Lee, Min-Jeong (26 May 2014). "South Korean Messaging-App Maker Kakao to Buy Web Portal Daum". Wall Street Journal. ISSN 0099-9660. Retrieved 19 April 2018.
  25. ^ Shu, Catherine. "Daum Kakao Debuts Uber Rival KakaoTaxi In South Korea". TechCrunch. Retrieved 28 February 2017.
  26. ^ "Messaging app Kakao's taxi service already has 84% of Seoul's drivers signed up". The Drum. Retrieved 28 February 2017.
  27. ^ Jin-young, Cho (17 December 2015). "Kakao Taxi Draws 600,000 Requests per Day". BusinessKorea. Retrieved 28 February 2017.
  28. ^ "Kakao, KT Surge After South Korea Grants Online Banking Permits". bloomberg. Retrieved 29 November 2015.
  29. ^ a b "Kakao Bank attracts 820,000+ clients in four days since launch". FinTech Futures. Retrieved 19 June 2018.
  30. ^ a b Ray, Stephane (19 October 2017). "Kakao Bank: from 0 to 1,5 millions customers in just one week!". Retrieved 19 June 2018.
  31. ^ a b Song, Jung-a (5 October 2017). "South Korea web-only banks thrive as traditional lenders struggle". Financial Times. Retrieved 20 June 2018.
  32. ^ "Kakao Launches Luxury Taxi Service". Chosun. 4 November 2015.
  33. ^ https://www.techinasia.com/kakao-launches-ebike-sharing-service-south-korea
  34. ^ https://www.techinasia.com/kakao-launches-blockchain-platform-klaytn
  35. ^ "Kakao readies Japan push with music and game content". Nikkei. Retrieved 20 February 2018.
  36. ^ "Kakao to launch video-streaming app in Japan". Nikkei. Retrieved 19 April 2018.
  37. ^ "Kakao to launch piccomaTV video streaming service this summer". telecompaper. Retrieved 19 April 2018.
  38. ^ "Daum Kakao in Serious Danger after "Censorship" Announcement". hankyung. Retrieved 8 August 2014.
  39. ^ a b "Kakao chairman again embroiled in gambling scandal". koreaherald. Retrieved 11 October 2015.

External linksEdit