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Kakao to launch mobile news service

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Published : 2014-07-25 21:39
Updated : 2014-07-25 21:39

Kakao Corp., the operator of Korea’s most-used mobile messenger Kakao Talk, is scheduled to launch a news content service later this year.

“We plan to start offering news content that collects and shows information from news, blogs and social networking services. For this, the company is in talks with media outlets to open the new mobile service in the second half of this year,” Kakao’s spokesperson said Friday. The service will reportedly be launched in September.

Kakao’s move to launch a news service is aimed at eating into the market share of Naver, the nation’s largest portal company, in the mobile domain, industry watchers said.

If Kakao’s news service is successful, Kakao could become a threat to Naver as it has the largest number of users among mobile messenger services in Korea.

“The success of the news service, however, depends on the quality of the news content and the coverage of media partnerships,” said Hwang Seung-taek, an analyst at Hana Daetoo Securities.

It is too early to tell whether Kakao will adopt Naver’s news supply and distribution methods. Naver selects news items and posts them on its homepage, which gives the portal site the role of a media outlet with great influence over its readers.

Unlike foreign portal services, through which users read articles from the media outlets they subscribe to, local users tend to see articles distributed by the portals.

“Kakao, which dominates the local mobile messenger service market, seems to be Naver’s one and only competitor in the mobile news service market, armed with Daum Communications’ abundant content and media partnerships,” said Jung Jae-woo, an analyst at Woori Investment & Securities.

Kakao acquired Daum in May through an equity swap, creating an Internet giant with a 3.4 trillion won ($2.9 billion) market capitalization. The combined company is expected to be listed in October.

By Shin Ji-hye (shinjh@heraldcorp.com)

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