Kakao ( ko, 카카오) is a South Korean internet company that was established in 2010. It formed as a result of a merger between

Daum Communications Kakao ( ko, 카카오) is a South Korean internet company that was established in 2010. It formed as a result of a merger between Daum Communications and the original Kakao Inc. In 2014, the company was renamed Daum Kakao. The company rebrande ...

and the original Kakao Inc. In 2014, the company was renamed Daum Kakao. The company rebranded once more in 2015, reverting simply to ''Kakao''. In May 2015, the company acquired Path, an American

social media Social media are interactive media technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks. While challenges to the definition of ''social me ...

company that had become successful in

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Gui ...

. In January 2016, Kakao acquired a 76.4% stake in

LOEN Entertainment Kakao M (; formerly Seoul Records, YBM Seoul Records and LOEN Entertainment) was a South Korean entertainment company established by Min Yeong-bin in 1978. It is currently one of the largest co-publisher companies in South Korea. The company op ...

, a large South Korean entertainment company, for $1.5 billion. It was later rebranded as

Kakao M Kakao M (; formerly Seoul Records, YBM Seoul Records and LOEN Entertainment) was a South Korean entertainment company established by Min Yeong-bin in 1978. It is currently one of the largest co-publisher companies in South Korea. The company op ...

. The company has gained further prominence from

KakaoTalk KakaoTalk (Hangul: 카카오톡), commonly referred to as KaTalk (Hangul: 카톡) in South Korea, is a mobile messaging app for smartphones operated by Kakao Corporation. It was launched on March 18, 2010, and it is available on mobile and deskto ...

, a free mobile

instant messaging Instant messaging (IM) technology is a type of online chat allowing real-time text transmission over the Internet or another computer network. Messages are typically transmitted between two or more parties, when each user inputs text and tri ...

application Application may refer to: Mathematics and computing * Application software, computer software designed to help the user to perform specific tasks ** Application layer, an abstraction layer that specifies protocols and interface methods used in a c ...

for

smartphone A smartphone is a portable computer device that combines mobile telephone and computing functions into one unit. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, whi ...

s with text and call features. By May 2017, the app had 220 million registered users and 47 million active monthly users. As of March 2022, the company is competing with

Naver Naver (Hangul: 네이버) is a South Korean online platform operated by the Naver Corporation. It was launched in 1999 as the first web portal in South Korea to develop and use its own search engine. It was also the world's first operator to ...

for No.1 position in the Japanese

web comic Webcomics (also known as online comics or Internet comics) are comics published on a website or mobile app. While many are published exclusively on the web, others are also published in magazines, newspapers, or comic books. Webcomics can be co ...

and web novel market.

History

2006-2014: Founding of Kakao Corp.

Kakao Corp is the company behind KakaoTalk, which serves as its main platform and flagship application. It was founded in 2006 by Kim Bum-soo, the former CEO of

NHN Corporation NHN Corp. () is a Korean IT company that started its business as a game company called Hangame in 1999. Currently its main businesses can be categorized as Cloud, Fin-Tech (cross-border e-commerce, payment), Entertainment (game, webtoon, musi ...

(the organization that emerged from the Hangame and Naver.com merger) as Kakao Inc. Kakao Corp. (then known as Kakao Inc.) is based in

Seoul Seoul (; ; ), officially known as the Seoul Special City, is the Capital city, capital and largest metropolis of South Korea.Before 1972, Seoul was the ''de jure'' capital of the North Korea, Democratic People's Republic of Korea (North Korea ...

, South Korea. Manson Yeo and Sean Joh serve as the current co-CEOs. In August 2013, three of globally ranked top 10 Android games (according to analytics provider App Annie) are tied into the KakaoTalk platform— Everybody’s Marble, '' Cookie Run'', and Anipang. 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. Kakao Corp generated revenue of approximately $200M (USD) in 2013 through gaming, digital content, mobile commerce, and its marketing channels for brands and celebrities. Kakao Corp. was named a Top Developer on Google's

Android Market Google Play, also known as the Google Play Store and formerly the Android Market, is a digital distribution service operated and developed by Google. It serves as the official app store for certified devices running on the Android operating syst ...

, and KakaoTalk was chosen as the number one Free

SMS Short Message/Messaging Service, commonly abbreviated as SMS, is a text messaging service component of most telephone, Internet and mobile device systems. It uses standardized communication protocols that let mobile devices exchange short text ...

App by

Cnet ''CNET'' (short for "Computer Network") is an American media website that publishes reviews, news, articles, blogs, podcasts, and videos on technology and consumer electronics globally. ''CNET'' originally produced content for radio and televi ...

. According to a December 2013 App Annie report, Kakao is the world's third top publisher by monthly revenue at

Google Play Google Play, also known as the Google Play Store and formerly the Android Market, is a digital distribution service operated and developed by Google. It serves as the official app store for certified devices running on the Android operating sy ...

. 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. KakaoTalk was nominated for the Most Innovative Mobile App Award at the Global Mobile Awards 2014. 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. Kakao Corp's full suite of apps includes: KakaoTalk, KakaoStory, KakaoTaxi, KakaoAccount, KakaoMap, KakaoDriver, KakaoBus, KakaoMusic, KakaoGroup, KakaoHome, KakaoPlace, KakaoAlbum, KakaoPage, KakaoStyle, and KakaoAgit.

2014–2015: Merger of Daum and Kakao

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 In corporate finance a stock swap is the exchange of one equity-based asset for another, where, during the merger or acquisition, the swap provides an opportunity to pay with stock rather than with cash; see . Overview The acquiring company e ...

. Once the two firms were combined the emergent company would have a market capitalization, enabling it to lodge a credible threat to Naver, which is South Korea's biggest web portal. The new entity Daum Kakao was valued close to . In 2015, the company changed its name to Kakao, restoring its pre-merger name. 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 Rim may refer to: *Rim (basketball), the hoop through which the ball must pass **Breakaway rim, a sprung basketball rim *Rim (coin), the raised edge which surrounds the coin design *Rim (crater), extending above the local surface *Rim (firearms), ...

. Kim Beom-soo become the largest shareholder in the new pro forma company with a 22.2 percent stake.

2015–present: New business model

Internet bank

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. Although K Bank eventually became South Korea's first Internet-only bank having been launched several months prior, Kakao Bank immediately attracted more customers; 820,000 within four days of its launch on 27 July 2017. The dedicated Kakao Bank app itself was downloaded 1.5 million times within the same period. The bank had 3.5 million customers after a month. These figures trounced the 400,000 users that K-Bank amassed within 100 days of its existence. 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. 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.

Transportation services

Kakao Taxi in Daejeon with license plates removed

On 10 March 2015, Daum Kakao launched their KakaoTaxi service that allows users to call a taxi using the KakaoTaxi application. About 600,000 taxi-consumers used the ride-hailing platform every day within eight months of its launch. In 2017, KakaoTaxi was renamed to

Kakao T Kakao T (formerly KakaoTaxi) is a Korean transportation service app launched by Kakao Mobility Corp., a subsidiary of Kakao in 2017. The service provides taxi-hailing, designated driver booking, nearby parking space searching, and real-time traff ...

. The service includes the premium extension Kakao Taxi Black, which allows users to book rides in Seoul via the messenger app, exclusively carried in luxury cars such as Mercedes Benz, Lexus, and BMW. Fares for the premium service start at ₩8,000. Kakao announced plans to expand the offering to other Korean cities within the following year. 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.

2022 outage

After a massive outage in October 2022, the co-chief executive, Namkoong Whon, resigned. A fire at an SK C&C data center in the south of Seoul caused a mass outage over the weekend and disrupted several of Kakao’s services, including messenger, ride-hailing, payment, banking and gaming.

Charity

In March 2022, amid

2022 Russian invasion of Ukraine On 24 February 2022, in a major escalation of the Russo-Ukrainian War, which began in 2014. The invasion has resulted in tens of thousands of deaths on both sides. It has caused Europe's largest refugee crisis since World War II. A ...

, Kakao donated approx. $3.65 million worth of Klay cryptocurrency to

UNICEF UNICEF (), originally called the United Nations International Children's Emergency Fund in full, now officially United Nations Children's Fund, is an agency of the United Nations responsible for providing humanitarian and developmental aid to c ...

to battle humanitarian crisis in Ukraine.

Services

Korea

Kakao provides a diverse set of services.

Community

: instant messaging and

VoIP Voice over Internet Protocol (VoIP), also called IP telephony, is a method and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet. The terms Internet t ...

service *

KakaoStory KakaoStory (Hangul: 카카오스토리) is a social network platform launched by Kakao Kakao ( ko, 카카오) is a South Korean internet company that was established in 2010. It formed as a result of a merger between Daum Communications and t ...

: image, video, and music sharing service *

KakaoPage KakaoPage () is a monetized content platform optimized for mobile devices, launched by the Kakao Corp. in 2013 and currently owned by its subsidiary Kakao Entertainment. The service launched on April 9, 2013 as a digital content marketplace allow ...

: web-based comic and novel service *

Brunch Brunch is a meal eaten between 10:00 a.m. and 2:00 p.m., sometimes accompanied by alcoholic drinks (typically champagne or a cocktail). The meal originated in the British hunt breakfast. The word ''brunch'' is a portmanteau of ''breakfast'' ...

: mobile contents publishing service

Entertainment

KakaoMusic KakaoMusic (Hangul: 카카오뮤직) was a music streaming service launched by Kakao. It lets users stream and buy music while also allowing them to share songs and connect with friends through KakaoTalk. In 2017, Kakao merged Kakao Music into Mel ...

: music app with sharing features *

Melon A melon is any of various plants of the family Cucurbitaceae with sweet, edible, and fleshy fruit. The word "melon" can refer to either the plant or specifically to the fruit. Botanically, a melon is a kind of berry, specifically a "pepo". T ...

: music streaming service acquired through Kakao M *

PotPlayer PotPlayer is a multimedia software player developed for the Microsoft Windows operating system by South Korean Internet company Kakao (formerly Daum Communications). It competes with other popular Windows media players such as VLC media player, ...

: media player for Windows

Fashion

* KakaoStyle: mobile fashion service. * KakaoHairshop: service, finding a nearby beauty salon

Finance

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

Investment

* Kakao INV: Investment in late stage startups. * Kakao Ventures: Venture Capital for early stage startups.

Transportation

: transportation service app, providing taxi hailing, chauffeur service and navigation services. * KakaoBus: real-time location and traffic information on buses. * KakaoMetro: metro line app, allows users to view the metro map, plan trips, and check prices.

Video Games

* Kakao Games: video game subsidiary.

Others

* KakaoFriends: diverse products including finance, distribution, foods, and so on * KakaoHello: Call app service based on Kakao account * KakaoTV: integrates Kakao TV Live broadcasting with 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 (discontinued)

Japan

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. In April 2018, Kakao Japan announced plans to launch a video streaming service to compete against

Netflix Netflix, Inc. is an American subscription video on-demand over-the-top streaming service and production company based in Los Gatos, California. Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, it offers a ...

and Amazon with a similar pay model to their

Piccoma Piccoma ( ja, ピッコマ, Pikkoma) is a Japanese webtoon subscription service that is available on smartphones, tablets, and personal computers. It was developed and released by Kakao piccoma Corp., the Japanese subsidiary of Kakao. Service W ...

service. The streaming service will be called Piccoma TV. *

* Piccoma TV

Controversy

KakaoTalk censorship

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.

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 mobile messenger service

Telegram Telegraphy is the long-distance transmission of messages where the sender uses symbolic codes, known to the recipient, rather than a physical exchange of an object bearing the message. Thus flag semaphore is a method of telegraphy, whereas ...

, which is known for its security. 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 gambling

Kakao board chairman Kim Beom-soo was accused of gambling in Las Vegas in the early years of Kakao Corp from 2007 to 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 Bellagio is a resort, luxury hotel and casino on the Las Vegas Strip in Paradise, Nevada. It is owned by The Blackstone Group and operated by MGM Resorts International. Bellagio was conceived by casino owner Steve Wynn, and was built on the for ...

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 ''Hankook Ilbo'' () is a Korean-language daily newspaper in Seoul, South Korea. As of 2017, it had a daily circulation of about 213,200. It was previously published by the Hankook Ilbo Media Group, however following an embezzlement scandal ...

'' newspaper reported. The company decided to comply with the prosecution's warrants requesting monitoring of chatting records, a reversal from its earlier stance.

Notes

References

32. Naver vs. Kakao: Way of working with startups. https://pickool.net/naver-vs-kakao-way-of-working-with-startups/

External links

{{KRX 100 companies South Korean companies established in 2014 Companies based in Jeju City Companies listed on KOSDAQ South Korean brands Internet properties established in 2014