[News Figures] The Rise and Fall of Executive Director Ryan

Name: Ryan, Affiliation: Kakao, Position: Executive Director. Although he looks like a bear, he is actually a lion. Debuting in 2016, he gained immense popularity and was recognized for his contributions to the company, earning the nickname 'Director Ra.' Just one year later, in 2017, he was rapidly promoted to Executive Director. At that time, his name appeared on the official list of Kakao executive promotions, attracting considerable attention. Until then, things were good.

Born as a Branding Character... Kakao's Representative Mascot

Ryan was created during Kakao's transition from a simple 'chat messenger' to a 'platform.' KakaoTalk, which launched in 2010, leveraged its free service and the world's first group chat support to secure nearly 80 million global users in just three years. However, until then, KakaoTalk was merely a chat application without a distinct brand. To give KakaoTalk a 'face,' the parent company Kakao came up with the idea of creating original emoticon characters, which led to the birth of 'Kakao Friends,' a collection of Kakao characters.

Monthly Average KakaoTalk User Trends (above), Number of Subscribers to Main Services

Ryan is a member of Kakao Friends who debuted in 2016. Designed with the concept of a 'mane-less male lion,' this character's unique expressionless face and cute design resonated strongly not only with young people but also with middle-aged and older generations. A year later, Ryan was ranked as the most beloved character by Koreans in the 'Character Preference Survey' announced by the Korea Creative Content Agency.

Dominating the Front of Smartphones

As Kakao officially launched its platform business, Kakao Friends, including Ryan, began to 'appear' beyond KakaoTalk's emoticon window, taking over the front of smartphones.

'Kakao T Blue' mid-sized taxi decorated with the Ryan character.

Kakao had already become a messenger app used by the vast majority of the population who owned mobile phones, generating stable revenue through advertising and character businesses. Adding entertainment features such as gifting and playing games together, Kakao launched Korea's second internet-only bank, 'KakaoBank,' in January 2016, transforming itself into a full-fledged 'lifestyle platform.'

Kakao's business expansion was literally unstoppable. In 2017, 'Kakao Mobility,' which integrated car navigation and taxi-hailing services, was established, and the same year saw the launch of 'Kakao Pay,' a fintech company offering simple payment services. In early 2020, amid the global COVID-19 pandemic, Kakao expanded into healthcare and public electronic signature sectors by enabling the government's COVID-19 vaccination certificates to be verified via KakaoTalk QR check-in.

Kakao has expanded beyond chat, entertainment, e-commerce, and banking to enter the public electronic authentication service sector. / Photo by Kakao homepage capture

When KakaoTalk was first introduced in 2010, Kakao's annual revenue was a mere 34 million KRW. However, by its 10th anniversary in 2020, it had grown into a large corporation with sales of 4.1568 trillion KRW and operating profit of 455.9 billion KRW. This represents more than a 100-fold growth in just 10 years.

Over 110 Domestic Affiliates... Ryan Symbolizes 'Neighborhood Business Infringement Controversy'

With Kakao's app handling chatting, gaming, banking, electronic payments, and even public authentication, Kakao became more deeply integrated into the lives of Koreans. However, not everyone welcomed the 'lifestyle platform' Kakao. Concerns were raised that the large corporation Kakao, through over 110 affiliates, was encroaching on the business areas of small business owners and self-employed individuals, such as taxis and delivery (Kakao Mobility) and hair salons (Kakao Hairshop).

Public opinion, which once welcomed Kakao and Ryan, partly turned against them. Online, sarcastic comments like "Soon we might even see Ryan at funeral service companies" surfaced, criticizing Kakao's management style of expanding into nearly every domestic business sector by increasing affiliates.

An image of 'Kakao Sangjo' that went viral online. It is a satirical critique of Kakao's business model, which has entered the domestic market with a high proportion of self-employed and small business owners through more than 100 affiliates. / Photo by Online Community Capture

Voices calling for regulation of Kakao's excessive business expansion also emerged in the political arena. In September last year, Democratic Party lawmakers Song Gap-seok and Lee Dong-joo held a forum at the National Assembly titled 'Kakao's Octopus-like Expansion - Measures to Eradicate Unfair Trade by Platform Giants and Protect Neighborhood Business Ecosystems.' At the event, small business groups criticized, "Kakao is eyeing the secondary industrial market, which is the unique market of small business owners, under the pretext of being a platform."

Amid the 'octopus-like expansion' controversy, Kakao sought to ease conflicts with a 'coexistence plan for self-employed business owners.' This involved organizing or withdrawing affiliates involved in neighborhood business infringement controversies and establishing a 'partner support fund' worth 300 billion KRW over the next five years to support platform workers and small business owners. In fact, in April, Kakao presented a detailed plan for distributing coexistence funds for digital content creators, performing artists, small business owners, platform workers, children, and digital vulnerable groups through an online briefing session.

The Longest Outage in 12 Years of History... Can the Crisis Be Overcome?

Meanwhile, the fate of Kakao and Ryan entered a new phase. On the 15th, a fire broke out at the SK C&C data center in Pangyo, Seongnam City, Gyeonggi Province, where Kakao is housed, cutting off server power and causing service disruptions including KakaoTalk. The 'KakaoTalk outage' saw partial restoration of functions such as text messaging around 2 a.m. the next day, about 10 hours after the incident, but it became the longest connection outage in KakaoTalk's 12-year history.

KakaoTalk has experienced connection errors several times since its launch. However, these were usually resolved within a few hours and mostly caused by external issues rather than internal problems at Kakao. The longest previous outage occurred in March last year due to an error on Google's Android operating system, where a software conflict between Google's OS and the app caused the problem.

Firefighters are conducting extinguishing operations at Building A of the SK Pangyo Campus in Sampyeong-dong, Bundang-gu, Seongnam-si, Gyeonggi Province, where a fire broke out on the afternoon of the 15th. / Photo by Yonhap News

However, this incident occurred because the data center housing Kakao was physically damaged. Moreover, not only the messenger but also multiple app-based services such as taxi, payment, and maps experienced simultaneous errors. This raises concerns about whether Kakao can be relied upon if another human-caused disaster or an uncontrollable natural disaster destroys the data center in the future.

Immediately, the government announced on the 16th that it would inspect server facilities of value-added telecommunications service providers including Kakao and devise measures to enhance service stability. The National Assembly is also considering summoning Kakao officials as witnesses at the comprehensive audit scheduled for the 24th.

Jo Seung-rae, the Democratic Party whip of the National Assembly's Science, Technology, Information and Broadcasting Committee, stated in a press release that "If necessary, data center operators, Kakao, and Naver officials will be summoned as witnesses at the national audit to hold them accountable for this incident," adding, "While the weight of our lives has rapidly shifted online due to COVID-19, related policies and regulations have not kept pace. It is increasingly necessary to examine the vulnerabilities of online platforms and the stability of infrastructure such as networks and data centers."

Although Ryan will not appear before the National Assembly, the rapid promotion record of Ryan, who has shared both Kakao's success and crisis moments, is likely to come to a halt here.