Kakao Corp. runs KakaoTalk, the messenger used by nearly every smartphone owner in South Korea. Kim Beom-su, who co-founded Hangame and helped build NHN, founded IWILAB in 2006 and launched KakaoTalk in March 2010 as a free alternative to paid text messages. In 2014 Kakao merged with Daum Communications, and in FY2025 the group reported record revenue of ~$5.75 billion (KRW 8.099 trillion).
Using the messenger as a distribution channel
Kakao treated KakaoTalk as a channel for other services. Games, emoticons, gifting, Kakao Pay, KakaoBank, and Kakao T taxi-hailing were all offered to users already in the app, keeping acquisition costs low. Talk Biz advertising and commerce became the most profitable part of the business.
A digital conglomerate
Kakao built a wide group: listed affiliates KakaoBank, Kakao Pay, Kakao Games, and SM Entertainment, plus Kakao Entertainment, Kakao Mobility, and Japan's Piccoma. Listing subsidiaries raised capital but drew criticism that the parent's value was being diluted.
The outage and the SM case
An October 2022 fire at the SK C&C data center in Pangyo took KakaoTalk and linked services offline for days, prompting leadership change and new investment in redundancy. In July 2024 founder Kim Beom-su was arrested over alleged manipulation of SM Entertainment shares; he was acquitted at first instance in October 2025, and an appeal verdict is due in November 2026.
Record profit and a proposed split
Under CEO Shina Chung, Kakao cut affiliates and focused on Talk Biz and AI. FY2025 operating profit rose 48% to ~$520 million (KRW 732 billion), and Q2 2026 set new quarterly records. In August 2026 Kakao proposed splitting into Kakao AI, which keeps KakaoTalk, and Kakao X, an investment company holding its fintech, content, and mobility stakes.
