"Release After Quality Verification and Improvement Work"
Record Quarterly Sales Driven by Platform Growth
Kakao will launch an artificial intelligence (AI) service in the form of a conversational platform in the second half of this year.
On the 8th, at the Q2 earnings presentation, Jeong Sin-ah, CEO of Kakao, stated, "In the second half, we plan to introduce a B2C (business-to-consumer) AI service in the form of a conversational platform, which is Kakao's unique strength," adding, "Since the service will include users who are not familiar with AI, we will minimize hallucinations and release it as a separate application (app) rather than within KakaoTalk."
She continued, "We will conduct quality verification and improvement work during the second half before launching the service," and added, "Rather than focusing investment on developing our own large language model (LLM), we will quickly launch AI services that are easily accessible from a cost-efficiency perspective."
Previously, Kakao established a dedicated AI organization called 'Kanana.' It is divided into 'Kanana X,' which develops AI services, and 'Kanana Alpha,' which focuses on AI model development. Kanana X is led by Lee Sang-ho, former Kakao CAIO (Chief AI Officer), and Kanana Alpha is led by Kim Byung-hak, CEO of Kakao Brain.
CEO Jeong also announced plans to streamline non-core businesses for future growth. She said, "We want to focus company-wide resources on accelerating the growth of Talk Biz and discovering AI growth engines," adding, "We define businesses that are deemed to have little relevance to the KakaoTalk platform and AI as non-core, and we plan to speed up efficiency improvements for those businesses in the second half."
She also addressed the unprecedented situation of the 'arrest of the group head.' Last month, Kim Beom-su, Kakao's founder and co-chairman of the CA Council and Management Innovation Committee, was arrested on charges of manipulating stock prices to set them higher than the public tender offer price of 120,000 KRW in order to obstruct HYBE's public tender during Kakao Entertainment's acquisition of SM. CEO Jeong said, "There are difficulties in the external environment surrounding Kakao recently," and added, "The group management and all members will strive to uphold the essence and responsibility of our services, and we will strengthen our foundation and substance while promoting co-growth with various stakeholders."
Kakao recorded the highest-ever Q2 revenue due to growth in the platform sector. Revenue was 2.0049 trillion KRW, a 4% increase compared to the same period last year. Operating profit rose 18.5% to 134 billion KRW.
According to Kakao, Q2 platform sector revenue increased 10% year-on-year to 955.3 billion KRW. Talk Biz, which operates advertising and commerce businesses through KakaoTalk, recorded revenue of 513.9 billion KRW, a 7% increase during the same period. Advertising-type revenue from Talk Biz, including Biz Board and KakaoTalk Channel, was 307.3 billion KRW, up 9% year-on-year. Transaction-type revenue from Gift, Talk Store, and others rose 5% to 206.6 billion KRW.
The domestic monthly active users (MAU) of KakaoTalk in Q2 were estimated at 48.93 million, and the business model implemented through KakaoTalk was evaluated as a core growth driver.
Revenue from the platform's other sectors, including mobility and Pay, increased 18% year-on-year to 353.5 billion KRW, while portal business revenue, including the portal site Daum, decreased 2% year-on-year to 87.9 billion KRW.
Alongside the platform, the content sector, another pillar of Kakao's business, recorded Q2 revenue of 1.0496 trillion KRW. Music revenue was 510.9 billion KRW, a 6% increase compared to the same period last year. New releases from 'IVE,' 'RISE,' and 'aespa' sold 1.7 million, 1.27 million, and 1.17 million copies respectively, driving revenue and profit growth.
Story revenue was 215.9 billion KRW, down 7%. This was influenced by increased strategic marketing expenses to respond to intensified competition in the Japanese webtoon market. Media revenue rose 22% year-on-year to 89.6 billion KRW, explained by a base effect due to a concentrated production lineup in the second half of last year.
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