The Korean mobile messenger service provider Kakao is continuing its upward trajectory as it raked in over 1 trillion won in 2016 for the first time, giving the company ammo for its dive into R&D on deep-tech like artificial intelligence according to a report at Forbes.
Last week Kakao Corp. said growth from its gaming and music platforms propelled the company to hit an all-time high of 1.46 trillion won ($1.3 billion) revenue in 2016, up 57.1 percent from 2015. That brought operating income to 116.1 billion won ($101.3 million) for the year, up 31.1 percent. While the rest of the tech scene may have slowed down a bit in 2016, Kakao continued a slew of activities, expanding its brand into on-demand services and offline merchandise. Now it’s poised for the next jump into the dark unknowns of deep technology.
The Korean tech company started out a humble but ambitious startup in 2010 as the maker of KakaoTalk, a mobile messenger known for its addictive series of emoticon character stickers. While its Korean rival Naver found luck with Line messenger abroad to become wildly popular in Japan and parts of Southeast Asia, Kakao failed to break out and zeroed in on the home turf, a play that succeeded to make KakaoTalk the app of choice on 99 percent of local messenger users’ smartphones.
After monetizing the stickers, developing Koreans’ go-to platform for mobile games and merging with Naver’s portal rival Daum to become a publicly listed company, Kakao has used its star power to sprawl into online-to-offline “mobility” services from a taxi-hailing app that crushed Uber in Korea to hair salon reservations. It also acquired the maker of top music streaming service MelOn and developed freebie transport info apps to occupy every space of Korea’s mobile internet.
But critics were concerned that building an O2O empire of mostly free services would weigh down the company, and the company’s profit excluding music services plummeted 60 percent on-year in the third quarter last year to 10.4 billion won ($9 million). Local startups have even argued that Kakao was stealing their ideas and running with them. So Kakao changed tacts, hinting it would streamline its own role to focus on what it’s good at being a platform.
First seen at and source: Forbes