The Korea Herald


Kakao’s Q2 profit surges on LOEN sales

By 김영원

Published : Aug. 11, 2016 - 11:27

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[THE INVESTOR] South Korea’s largest mobile messenger firm Kakao said in its regulatory filing on Aug. 11 that its operating profit in the April-June period increased 133 percent on-year to 26.6 billion won (US$24.20 million).

The second-quarter revenue came in at 376.5 billion won in the same period, up 66.2 percent from a year earlier.

In the regulatory filing, the company unveiled the sales of each of its three business categories – content platform, ad platform, and miscellaneous.


Its content platform segment, which includes businesses for music, games, webtoons (online comics), and mobile messenger emoticons (stickers), played a vital role in improving the firm’s profits in the second quarter.

Kakao’s overall sales from its content platform jumped 215.4 percent on-year to 190.4 billion won -- 90.5 billion won from the music content business, 78.3 billion won from the game business, and 21.6 billion won from the sales of other mobile messenger content including webtoons and emoticons.

The mobile messenger content business stood out among others in the content platform segment as it achieved dramatic sales growth, 469.1 percent on-year, thanks to the popularity of cartoons and emoticons among the users of KakaoTalk, the most-used mobile messenger in Korea.

The music streaming services mainly led by LOEN Entertainment, which Kakao acquired for $1.6 billion in January, also contributed to the improved profits, Kakao said.

Despite the robust sales of its mobile ad businesses, its ad platform segment, however, saw sales drop 12.1 percent on-year to 136.2 billion won, due mainly to decrease in PC traffic.

The sales of what Kakao calls the miscellaneous segment, including music streaming services and e-commerce, stood at 49.9 billion won, up 349.1 percent from a year earlier.

Kakao, which has gone all out to acquire new businesses, spent 349.9 billion won in operating expense. Most of the expense was on salaries and employee benefits of the new businesses and marketing for new services, such as Kakao Driver, a mobile chauffeur service.

“Kakao will put more focus on rolling out competitive content services and new mobile games,” Kakao said in a press release.

The mobile messenger operator also plans to open its second flagship store for merchandise goods, based on its mobile messenger emoticons, in cooperation with companies in various industries ranging from food to fashion.

By Kim Young-won (