"Firstly, regarding advertising revenue, once Kakao becomes the number one online communication platform in South Korea, advertisers will see a steady stream of advertising revenue. Currently, most advertisers rely on print media and live television broadcasts, but with the development of internet platforms and the increasing number of internet users, new media advertising will become the most important source of advertising investment."
According to Kakao's official investor profile, the company derives most of its revenue from advertising. Mobile advertising has been thriving in South Korea for many years. In 2013, Kakao partnered with mobile advertising marketing company IGAWorks to bring its adPOPcorn advertising platform to KakaoTalk.
adPOPcorn will allow Kakao users, especially gamers, to earn rewards, such as in-game items, by clicking on ads. According to the company, Kakao also earns ad revenue through its KakaoStory, a "photo-centric social networking site that allows sharing photos, videos, and ideas." Key features include photo editing, blogs, hashtags, and a news feed where ads can be displayed.
"The second point of the game."
"Games?" Lee Boo-jin and Kim Soo-beom frowned. Kakao, at this stage, had no specific focus on online games and wasn't involved in that area.
“Online games are a great tool for making money, just like gambling. KAKAO may not need them at the moment, but they will definitely be developed in the future. You can position KAKAO games in the field of leisure and entertainment, or you can acquire projects made by local Korean game developers.”
Kakao's game publishing service, launched in 2012, has been a major driver of its revenue growth. According to Statista, despite the simple source, Kakao's massive platform enables developers to publish and distribute games to its millions of users.
The first major success was achieved by Match 4, which is considered "Korea's Candy Crush Saga." This game, called "Anipang," not only imitated Western games in terms of gameplay mechanics but also in its freemium model, generating hundreds of thousands of dollars in revenue daily.
Anipang's success has led to a surge of games flooding the Kakao platform (and Kakao's coffers). Kakao generated over $100 million in game revenue last quarter.
"Then there's the third point: online stickers and emojis. You can refer to Tencent's Red Diamond, Blue Diamond, and QQ Membership services for these. They use virtual currency to guide people to make purchases."
For those looking to easily take their messages to a new level, Kakao also sells stickers and emojis, which can be purchased using Kakao's own virtual currency, Chocos.
Kakao's competitor Line has proven that stickers are highly profitable in the messaging app space, with sticker sales accounting for 20% of its net sales, according to the company. While Kakao doesn't rely on sticker sales as heavily as Japanese app makers, stickers fall under the "Other" category for Kakao Music, Kakao Pages, and Kakao Pay services.
"The fourth point is online e-commerce. That is, internet e-commerce platforms, such as Amazon, and Alibaba's Alimama in China. You can send people to learn about them. This will be the main source of sales for physical businesses in the future. If you do well in this area, the annual business tax will be enormous."
Like Line and WeChat, Kakao also offers its own e-commerce marketplace through Kakao Gift Shop and KakaoStyle. The former allows users to send gift certificates to each other via KakaoTalk, offering products ranging from food and beverages to cosmetics and home goods. The latter is South Korea's number one style app, boasting 100,000 browsable items and over 160 brands, allowing users to share style opinions and information with friends while shopping.
"Then there's the big entertainment industry, which means building an ecosystem. We need to get involved in music, film and television, games, novels, animation, ACG (anime, comics, and games), and other related fields. KAKAO will do everything that the public needs, and not only will we do it, we will become the number one in the industry."
In addition to continuing its deep involvement in the internet industry, Kakao Talk launched its own version of Spotify in 2013. KakaoMusic allows users to create their own music rooms and share them with friends. Users can leave messages and comments, sharing their emotions and memories. For this entrepreneur, Kakao also created KakaoPages, a paid mobile optimization platform that gives users the opportunity to sell and market their original content in the form of text, images, audio, or video.
Meanwhile, Kakao Group, through its entertainment arm KakaoM, has aggressively expanded its talent management business in the past two years, particularly in 2019, acquiring and investing in several top talent agencies and beginning to build up its content production resources.
1) BH Entertainment: Lee Byung-hun, Kim Go-eun, Choo Ja-hyun, Yu Xiaoguang, and 27 other actors.
2) Soop Entertainment: Gong Yoo, Gong Hyo-jin, Jeon Do-yeon, and 17 other actors.
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