Kakao Streamlines Operations, Reduces Affiliates to Focus on Core Assets

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19 Aug 2024

Kakao, the powerhouse behind Korea's leading messaging platform, is strategically refocusing its efforts by divesting from noncore assets that do not align with its primary business interests in the KakaoTalk app and artificial intelligence. This shift is evident in the company's recent regulatory filing, which revealed a reduction in the number of Kakao affiliates from 144 to 123 over the past year. Notably, this includes the exit from sectors such as beauty reservations and golf rental services.

In a significant move, Kakao has completed the necessary filings with the Fair Trade Commission to remove Wyatt, the operator of the salon reservation service Kakao Hair Shop, from its affiliate roster. This decision follows the divestment of a 38.9 percent stake in Wyatt by Kakao's venture capital arm in May, marking a decisive step in the company's strategy to streamline operations.

Strategic Refocus on Core Businesses

The company's commitment to shedding non-essential businesses is further underscored by Kakao VX's decision to withdraw from key segments, including golf equipment, healthcare platforms, and non-fungible tokens, within the year. This initiative is part of a broader effort to concentrate on the Kakao Friends Golf brand, which leverages popular Kakao Friends characters in golf-related products, thereby prioritizing the immediate success of its screen golf and golf platform ventures.

Moreover, Kakao has also divested from other former affiliates, including Awins, a children's toy retailer, Beacon Holdings, a food service company, and Xtriple, a real estate leasing firm. These moves reflect a clear intention to concentrate resources on areas with the highest potential for growth.

During a recent online conference call, Kakao CEO Chung Shin-a emphasized the company's strategic direction, stating that KakaoTalk and AI have been identified as the core drivers of future growth. He articulated a vision for the latter half of the year that focuses on accelerating related businesses and fostering innovation through AI.

However, this restructuring comes at a time of heightened regulatory scrutiny for Kakao. The company is navigating a leadership crisis following the indictment and arrest of founder Kim Beom-su on charges of stock manipulation linked to the acquisition of K-pop agency SM Entertainment. Additionally, the financial regulator has raised concerns regarding Kakao Pay, a mobile payment service, for allegedly leaking customers' personal credit information to the Chinese mobile payment platform Alipay without user consent.

How do I log into KakaoTalk?

To log into KakaoTalk, first, download and install the app from the Google Play Store or Apple App Store. Open KakaoTalk and either log in with your existing account credentials (email and password) or sign up for a new account if you don't have one. If you have 2-step verification enabled, you will need to enter a verification code sent to your registered phone number. Once all the necessary information is entered, you will be logged into your account.

Why is KakaoTalk banning open chat?

KakaoTalk has occasionally banned certain open chat rooms to combat the spread of illegal activities, including the distribution of explicit content, scams, and other unethical behaviors. The decision to ban or moderate these chats is aimed at creating a safer and more secure environment for all users. These measures are part of KakaoTalk's continued efforts to enforce their community guidelines and legal compliance.
Update: 19 Aug 2024
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