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How KakaoTalk Makes Money

Kakao Corp's Content segment of games, music, and media brings in the most revenues
By
Zaw Thiha Tun
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Zaw Thiha Tun is currently an investment advisor for PI Financial Corp. He is also a freelance financial writer on a wide variety of topics.
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Updated October 19, 2023
Reviewed by
Doretha Clemon
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Reviewed by Doretha Clemon
Full Bio
Doretha Clemons, Ph.D., MBA, PMP, has been a corporate IT executive and professor for 34 years. She is an adjunct professor at Connecticut State Colleges & Universities, Maryville University, and Indiana Wesleyan University. She is a Real Estate Investor and principal at Bruised Reed Housing Real Estate Trust, and a State of Connecticut Home Improvement License holder.
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Kakao Corp. ("Kakao") is a South Korean entertainment company that offers a variety of products, including KakaoTalk. KakaoTalk is a mobile messaging app for smartphones. KakaoTalk was launched in 2010 and as of Q2 2023, had 53.5 million monthly active users globally, 48.2 million of which were in Korea.

As Kakao does not report financial information solely for KakaoTalk, this article will discuss the financials for Kakao Corp. overall.

Key Takeaways

  • KakaoTalk is a major messaging app in South Korea, competing with notable apps like WeChat.
  • KakaoTalk is owned by Kakao Corp., which is a large South Korean company operating a variety of businesses.
  • Its revenue streams include music, games, messaging apps, and other media.
  • As of Q2 2023, KakaoTalk had 53.5 million monthly active users worldwide.
  • In May 2023, Kakao announced the launch of its "Our Local Market" project in 100 markets. The program seeks to help merchants retain customers.
  • Kakao launched its Kakao Creative Foundation in June 2023, which aims to provide training for cultural content creators.

Financials

Kakao released the financials for its second quarter on Aug. 3, 2023. For Q2 2023, the company had total revenues of $1.5 billion. This was a 15% increase from the same period in 2022. The growth came from both of its reporting segments: Platform and Content.

Kakao reported a net income of $41.4 million for Q2 2023; a 44% decrease from $74.5 million in the same period last year. The decrease is a result of increases in operating expenses.

Business Segments

Kakao has two business segments: Platform and Content. It reports revenues for both segments but only reports consolidated net income.

Platform

The Platform segment consists of three segments: Talk Biz, Portal Biz, and Platform-Others.

Talk Biz includes Advertising and Commerce segments. Advertising consists of its products Bizboard, Talk Channel, and Emoticon. Its Commerce segment consists of its products Gift, Store, Makers, and Kakao Friends Online.

Portal Biz consists of its products Daum PC/Mobile, Kakao Story, Style, and Page.

Platform-Others consists of its products Mobility, Pay, Enterprise, Blockchain, and Kakao Friends.

This segment reported Q2 2023 revenues of $728.6 million; a year-over-year (YOY) 5% increase from the same period in 2022. This segment accounts for 48.4% of total revenues.

Content

The Content segment consists of four segments: Game, Music, Story, and Media.

Game includes all of the mobile, PC, and other games.

Music consists of SM Entertainment, Melon, Digital Music Distribution, Album Distribution, and Music Production.

Story includes Entertainment and Piccoma.

Media includes Video Production and Talent Agency.

This segment reported Q2 2023 revenues of $776.5 million; an 18.2% increase from the same period in 2022. This segment accounts for 51.6% of total revenues.

Recent Developments

In May 2023, Kakao announced its "Our Local Market" project in 100 markets nationwide. The project helps merchants to use KakaoTalk channels to retain customers by communicating with their regular customers. This takes the form of digital training by Kakao's digital experts.

In June 2023, Kakao started the full-scale operations of the Kakao Creative Foundation, which is a cultural foundation for all cultural content creators. The program provides various programs for creators, launching with its Online Creative Academy.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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