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Kakao eyeing more revenue growth with messenger ad biz

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By Baek Byung-yeul

Kakao forecasted higher profits in 2020 due to a boost in advertisement sales from its Kakao Talk messenger platform, the internet company said during an earnings call, Thursday.

Kakao Talk is the country's most popular mobile messenger with around 43 million monthly active users as of the fourth quarter of 2019.

While seeking ways to improve its sales, Kakao decided to display advertisements in its Kakao Talk application last year. The strategy proved to be a success as the company posted sales of over 3 trillion won for the first time in its history.

In a regulatory filing to the Korean Exchange (KRX), the company said its sales in 2019 increased 28 percent to 3.08 trillion won and an operating profit was 206.6 billion won, up 183 percent year-on-year.

Breaking down revenues by business division, the platform business dealing with Kakao Talk and its mobile payment business posted sales of 1.43 trillion won with an annual growth of 38 percent.

Kakao CEO Yeo Min-soo told investors that it will strengthen the advertisement business this year by securing more advertisers for the messenger platform.

"We've already secured more than 3,000 new advertisers for the 'talk board.' Not only big-sized companies but also small and mid-sized advertisers are increasingly interested in the platform," Yeo said.

Speaking of its goal in 2020, Yeo said it "will secure tens of thousands of new advertisers this year and we've concluded that the 'biz board' has the potential to attract more than 100,000 advertisers."

Thanks to the large number of users of its internet-only bank subsidiary Kakao Bank and fin-tech service Kakaopay, the company announced its plans to move into the property insurance business during the call.

"As a brokerage service provider, we are preparing to launch various stock trading-related services," Bae Jae-hyun, executive vice president of Kakao, told investors. "We are also making efforts to launch a digital property insurance company that is based on innovative ideas in insurance technology."

The internet company will more actively pursue the international launch of its paid content service such as web comics, novels and mobile games this year.

"Kakao Page ― a mobile content platform of Kakao ― saw its sales surpass 70 billion won in the fourth quarter of 2019. We are preparing to launch the platform in Taiwan, Thailand and China," Yeo said.


Baek Byung-yeul baekby@koreatimes.co.kr


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