Korea's 2 Leading Internet Firms Keep Growing
Naver is believed to have surpassed 6 trillion won in annual sales in 2019 for the first time. Kakao is also estimated to have posted 3 trillion won in annual sales last year. The two leading Korean internet companies are thus believed to have achieved a new sales milestone in their company history.
This year, Naver is expected to continue to grow, driven by growth in its search ad business, an entry into the techfin business, and synergies generated by the integration of LINE and Yahoo! Japan in Japan. Kakao is also expected to realize both qualitative and quantitative growth as Talk Board will take the lead in increasing sales and its major subsidiaries will begin to generate profits.
Naver's sales estimate of last year was about 6.5 trillion won (about US$6.6 billion), said sources in the stock market on Jan. 12. Naver's cumulative sales in the first three quarters of last year stood at 4.80 trillion won (about US$4.1 billion). In addition, securities firms estimate Naver's sales in the fourth quarter at 1.7 trillion won (about US$1.5 billion), indicating that Naver virtually entered the era of 6 trillion won (about US$5.1 billion) in sales for the first time.
However, Naver's profitability (operating profit) is estimated at less than 1 trillion won (about US$862 million). This is attributable to an increase in operating loss and marketing cost at Naver's Japanese subsidiary LINE.
Kakao is also expected to post 3 trillion won (about US$2.5 billion) in sales for the first time in 2019. Its sales reached about 2.2 trillion won by the third quarter of last year. With the addition of a sales estimate of about 850 billion won (about US$742 million) in the fourth quarter, it is expected to enter an era of 3 trillion won (about US$2.5 billion) in sales. In particular, as Kakao's Talk Board is expected to improve Kakao's profitability as it evolves into a new platform that links commerce and advertising.