November 22, 2024

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Despite criticism on the overt commercialization of its platform, Kakao Corp., the operator of South Korea’s leading mobile messenger KakaoTalk, proves it is worth it. 

The better-than-expected results, which exceeded a consensus of 34 billion won in operating income estimated by local brokerages, were backed by steady growth of both platform and content businesses, the company said.

The revenue from its platform business surged by 30 percent on-year to 327 billion won during the second quarter on the back of fast growth of its controversial Biz Message and increased revenues from new businesses, such as Kakao Mobility and Kakao Pay.

Launched in May, Biz Board places advertisements on top of the messenger’s default page. While it can attract traffic from 430 million monthly active users on KakaoTalk for advertisements, users have criticized the overt commercialization of the messenger, which for many has become inevitable to use for communication with colleagues and friends.

The company’s new businesses, such as Kakao Mobility and Kakao Pay, soared 103 percent from a year ago to log 51 billion won in revenue.

But its revenue from game contents fell 12 percent during the same period to 98.4 billion won, partly due to the base effect. In April last year, Kakao Games started to charge for gaming sensation 'Player Unknown’s Battleground', which spiked its revenue.

For the first six months of 2019, the mobile giant’s operating profit surged 79.3 percent to 68.1 billion won compared to the same period a year prior, while net profit rose 30.7 percent to 48.6 billion won. Sales increased 25.8 percent on-year to 1.44 trillion won during the January-June period.

Following the news, the company’s shares rose as high as 127,000 won in morning trade.

By Park Ga-young (gypark@heraldcorp.com)