Daum Kakao, the company behind South Korea’s popular messaging service KakaoTalk, reported Q1 2015 net income of KRW30.85 billion ($28.3 million), a 23 per cent drop from a year earlier, as it increased its ad and marketing spend to support new services.
First quarter revenue was KRW234.39 billion, up 19 per cent year-on-year. Its mobile business generated 55 per cent of total revenue.
Mobile game revenue increased 14.2 per cent year-on-year to KRW58.77 billion. It also saw strong growth in its Kakao-branded commerce services, with revenue increasing almost threefold year-on-year to KRW15.53 billion.
Monthly active users (MAUs) for KakaoTalk in South Korea rose from 37.4 million in Q4 to 38.2 million in Q1. However, globally – across more than 230 countries and 15 languages – MAUs have fallen over the last year and quarter, from 50.4 million in Q1 2014 to 48.3 million in Q4 and 48.2 milliion in Q1 2015.
According to The Wall Street Journal, Choi Sae-hoon, co-CEO, said that “at this point, we believe maximising customer satisfaction is our number one priority”. The executive added that cab-hailing app KakaoTaxi now has a market share of more than 50 per cent in Seoul with mobile payment service KakaoPay and its gaming platform attracting consumers (4 million for KakaoPay).
“Many players are competing quite fiercely to build a user base, but once that stabilises and a strong player emerges, then we can achieve financial growth,” he said.
The company’s future plans include a video-sharing service and possibly also a mobile designated-driver service.