Another Shift
As Daum Kakao failed to properly show synergy results after the merger last year and has faced controversy over this crisis, the company has decided to restructure its business.
On May 7, Daum Kakao announced that it will end the messenger service My People and the mobile shopping service Kakao Pick at the end of next month.
My People is the messenger service launched by former Daum Communications before Daum Kakao was established. Kakao Pick is a mobile shopping service launched by Daum Kakao in Sept. last year. The company provided products directly selected by Daum Kakao merchandisers at bargain prices. Kakao Pick attracted attention, as Daum Kakao ambitiously released the service 15 days before the merger on Oct. 1 last year. However, the company will stop the service 8 months after launch due to consumer indifference.
The fact that Naver recently implemented an aggressive game marketing strategy and shook the game business, the major source of income of the company, fanned the flames of Daum Kakao’s crisis theory. Also, the company seems to have opted for business restructuring after it failed to seek out a new source of income besides Kakao Talk.
Even though the company is spending much money on marketing Kakao Taxi and Kakao Pay, the majority opinion is that it is hard to expect profits from these services for a while. In the stock market, Daum Kakao is having a tough time, failing to maintain the top spot in the KOSDAQ.