Shrinking Overseas Business
Daum Kakao has broken up with Yahoo Japan after two years of business cooperation in the Japanese market. The former said that the decision was made as a part of its overseas business restructuring following the merger between Daum Communications and Kakao.
Kakao and Yahoo Japan established Kakao Japan in October 2012 on a 50-50 basis, drawing much attention as an example of Yahoo Japan’s partnership with a Korean venture firm in the Japanese mobile messenger market. However, the Kakao Talk messenger failed to outperform Naver Line in the market.
Kakao Japan recorded 20 million won (US$17,703) in sales and 11.6 billion won (US$10.3 million) in losses in 2012, and 630 million won (US$557,600) and 10.1 billion won (US$8.9 million) in 2013, respectively. Late last year, Daum Kakao purchased the 50 percent share invested by Yahoo Japan, and Kakao Japan became a fully-owned subsidiary of Daum Kakao.
Last year, Daum Kakao was in the red in other overseas markets, too. Kakao Singapore recorded sales of 320 million won (US$283,254) and losses of 60 million won (US$53,105), while Beijing Kakao marked losses of 740 million won (US$655,025). The number of global Kakao Talk users is on the decline as well. Monthly average users fell from 14.95 million to 10.83 million between Q4 2013 and Q4 2014 with WhatsApp, WeChat, and Line increasing their popularity in the U.S. and Europe, China, and Southeast Asia.