User time spent on KakaoTalk rises despite controversy over friends tab redesign

Kakao CEO Chung Sin-a (Kakao Corp.)
Kakao CEO Chung Sin-a (Kakao Corp.)

Kakao shrugged off public backlash over its recent KakaoTalk messenger revamp to post record earnings in the third quarter, with both revenue and operating profit hitting all-time highs on the back of steady platform growth and surging ad sales.

The South Korean tech firm said Friday its July-September sales climbed to 2.09 trillion won ($1.4 billion) on-year, while operating profit jumped 59.4 percent to 208 billion won — beating market consensus of 2.02 trillion won in sales and 163 billion won in profit compiled by FnGuide. It is the first time the company’s quarterly operating income has surpassed the 200 billion won mark.

Revenue from the platform division rose 12 percent to 1.06 trillion won. The company said its “Talk Biz” service, the ad, gifts and commerce service within KakaoTalk, grew 7 percent to 534.4 billion won. Advertising sales alone reached 325.4 billion won, up 11 percent from a year earlier.

Commerce sales including the Gift and Talk Deal services totaled 208.7 billion won, with self-purchase transactions — users buying for themselves — surging 40 percent, lifting Kakao’s integrated commerce gross merchandise value by 4 percent to 2.5 trillion won.

Mobility, payments and other platform businesses earned 452.7 billion won, up 24 percent. Content sales, driven by webtoons and music streaming, advanced 5 percent to 1.03 trillion won, the company added.

The strong results came despite fierce user backlash to KakaoTalk’s first major interface overhaul in 15 years. The update replaced the friends list with an Instagram-style feed showing users' profile photos in chronological order by update.

Yet the redesign appears to have boosted engagement. Kakao said the average daily time spent on KakaoTalk rose by about two minutes after the September update, nearing 26 minutes and reversing a long-term decline.

“Traffic in the chat remains solid, while time spent on the newly revamped friends list and new service tabs rose more than 10 percent from the quarterly average,” Kakao CEO Chung Sin-a said during the third quarter earnings call.

“As traffic extends beyond chat rooms into other areas, the overall quality of engagement across the platform has improved.”

Still, the company plans to reintroduce the classic friends list layout later this quarter to address widespread complains.

Chung also introduced Kakao’s new generative AI features that are driving user activity. The company’s ChatGPT for Kakao launched in late October drew more than 2 million users within 10 days of release.

“Average time spent per active user has already reached four minutes,” she said, saying it signals the potential of Kakao’s future growth.

Under its “Agentic AI” strategy, the messenger operator aims to introduce conversational assistants throughout its services. It has rolled out AI agents such as Kanana and plans to expand Kakao Tools, which automatically organizes chatrooms and summarizes unread messages using AI.

“We will continue balancing innovation with user trust. By listening closely to user feedback and keeping core services stable, we aim to drive sustainable growth across our platform," Chung said.


herim@heraldcorp.com