Kakao’s headquarters in Seoul (Courtesy of Yonhap)
South Korean mobile platform giant Kakao Corp. said on Thursday that it will accelerate its artificial intelligence push by launching a conversational AI platform, separate from the country’s dominant messaging app Kakao Talk, and streamline its businesses.
In the second half of this year, Kakao will release a business-to-consumer (B2C) AI service as an interactive platform, one of the company’s strengths, Chief Executive Chung Shina said during the second-quarter earnings conference call on Aug. 8.
The tech giant will explore opportunities of monetization by quickly launching AI service that users can easily access in consideration of cost efficiency, rather than focusing on in-house large language model (LLM) development, she added.
The company will launch the conversational AI service via a new app, not Kakao Talk, to respond quickly to market needs, Chung said.
The announced plan was contrary to industry insiders’ expectations that Kakao will unveil a conversational AI platform via Kakao Talk as the messaging app boasted 48.9 million monthly active users (MAUs) as of the end of June, more than 95% of the South Korean population.
Sign of taxi using Kakao’s taxi-hailing service (Courtesy of Yonhap)
GROWTH DRIVEN BY MOBILITY, FINTECH
Kakao’s second-quarter earnings improved from a year-earlier period.
The company logged a 134 billion won ($97.3 million) operating profit and 2.05 trillion won revenue for the second quarter, up 18.5% and 4.2% from a year ago, respectively.
The earnings growth was driven by mobility and digital payment platforms, which increased 18% on-year to 353.5 billion won.
The revenue from the game business fell 13.1% on-year to 233.5 billion won.
Sales from digital content such as online comics and novels dropped 6.6% on-year to 215.7 billion won due to increased marketing expenses amid intensified competition in the Japanese digital comics market.
Online shopping category in Kakao Talk (Courtesy of Kakao)
FOCUSING ON KAKAO TALK, AI
Kakao plans to increase revenue from Kakao Talk with new services.
It will launch full-screen advertisements for mobile phones, strengthen personalized product recommendations based on users’ purchase history and provide digital marketing tools and group chat features for conferences via the messaging app.
Kakao also plans to streamline its businesses while ramping up the core business of each affiliate. The online platform giant operated 128 affiliates as of the end of April, about 90% of which are intellectual property, information tech, AI and digital transformation.
Chung said that as Kakao Talk and innovations through AI are the Kakao headquarters’ core value, the tech giant will define businesses not relevant to AI as non-core ones and accelerate streamlining of them in the second half.
Market insiders forecast Kakao to sell some businesses of game publisher Kakao Games Corp., which has seen sluggish earnings.
Meanwhile, Kakao founder Kim Beom-soo was indicted by the Seoul Southern District Court on Thursday on stock price manipulation charges related to the tech giant’s acquisition of K-pop powerhouse SM Entertainment Co. in February last year.
Kim was arrested for his alleged involvement in the SM share manipulation on July 23.
By Ju-Hyun Lee
2juhyun@hankyung.com
Jihyun Kim edited this article.
