Kakao scales down noncore affiliates to focus on messenger app, AI Published: 19 Aug. 2024, 18:32 LEE JAE-LIM lee.jaelim@joongang.
co.kr Kakao's headquarters in Pangyo, Gyeonggi [NEWS1] Kakao, the operator behind Korea’s dominant messenger service, is downsizing noncore assets irrelevant to its primary businesses in the KakaoTalk app or AI. The number of Kakao affiliates has been scaled down from 144 to 123 compared to the year before, including businesses in beauty reservations and golf rental services, according to the company’s regulatory filing on Wednesday.
The tech company recently completed the filing with the Fair Trade Commission to exclude Wyatt, the operator behind salon reservation service Kakao Hair Shop, from its list of affiliates. Kakao’s venture capital arm divested the 38.9 percent stake it held over Wyatt in May.
The company is speeding up the process of cutting ties with what it considers as non-essential businesses. Kakao VX, a golf studio rental service, will withdraw from its key businesses in golf equipment, health care platforms and non-fungible tokens within the year. The move is part of scaling down operations in the Kakao Friends Golf brand, which utilizes Kakao Friends characters in golf equipment, to prioritize the short-term success of its screen golf and golf platform businesses.
The company also sold off its equity in former affiliates such as Awins, which sells children’s toys and products, food service company Beacon Holdings and real estate leasing company Xtriple. Kakao CEO Chung Shin-a stated at the company’s second-quarter online conference call this month that the company has “defined KakaoTalk and AI as the core drivers of future growth” and that it would “focus the company’s resources on accelerating related businesses and driving innovations through AI” from the latter half of this year. Kakao’s management restructuring comes amid regulatory risks it has faced this year.
It is dealing with a leadership vacuum as Kakao founder Kim Beom-su was indicted and arrested earlier this month on charges of stock manipulation related to his company’s acquisition of K-pop agency SM Entertainment. Last week, the nation's financial regulator also accused Kakao Pay, a mobile payment service affiliated with Kakao, of having leaked its customers’ personal credit information to the Chinese mobile payment service Alipay without user approval. BY LEE JAE-LIM [lee.
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