Daum Kakao faces more challenges than Naver

Choi Sae-hoon, left, and Lee Sir-goo, co-CEOs of Daumkakao, pose during a media briefing on the announcement of the merger between Daum Communications and Kakao at the Westin Chosun Hotel in Seoul, Wednesday. / Yonhap

Merged entity seeks to become ‘mobile life platform leader'

By Bahk Eun-ji

Daum Kakao, an entity formed by a merger between Kakao and Daum Communications, faces the daunting task of beating its bigger rival Naver.

Daum, the nation's second largest portal, and Kakao, the operator the nation's largest messenger app, launched the merged company, with Daum taking over Kakao.

The new company will be co-headed by Choi Sae-hoon from Daum and Lee Sir-goo from Kakao.

The launch of the new company comes amid concerns that the government may search through private chat histories on the platform to seek out the origins of destructive rumors.

Although KakaoTalk is the most popular mobile messenger in the country, a number of Korean users have migrated to foreign mobile messenger services such as Telegram after the prosecution threatened to start real-time monitoring of social media to crack down on libelous rumors shortly after President Park Geun-hye denounced such accusations as baseless.

The prosecution has said that it will never monitor private messages on mobile apps such as KakaoTalk without a specific reason, but users still remain skeptical about this, and it makes foreign messenger services, especially Telegram, likely to be the greatest beneficiary of any potential criminal investigation conducted through online monitoring by authorities.

The co-CEO Lee said that online users have misunderstood the mechanics of the KakaoTalk service because conversations don't remain on the main server for more than five to seven days.

"Of course, KakaoTalk operates within the laws of this country, so if the prosecution requires the details of conversations to be accessed through a legal process, we will cooperate with them," Lee said.

"However, it is usually difficult to disclose the contents to the prosecution, as we don't keep them for more than seven days," he added.

"However, in case of legitimate implementation of the law, we will cooperate with prosecutors, as (Daum Kakao) is subject to the law of South Korea," Lee added.

Prosecutors launched a new task force, vowing strong action against anyone who spreads false information that could cause social confusion and discord.

Some users in South Korea, in a so-called "digital migration," rushed to change their key messenger applications, with Russia-based Telegram suddenly becoming one of the most popular messenger apps in the local mobile market.

Industry watchers said that Daum Kakao will be a major rival company for the nation's largest search engine Naver.

"Using Daum's established content infrastructure and Kakao's platform business, we believe Daum Kakao will seek opportunities to expand the content distribution market, including existing mobile wallet and map-based services," said Joseph Chung, a tech-analyst at Woori Investment and Securities.

Just as other corporations went through merger, it seems that the two tech-giants have also gone through issues about the integration process especially regarding personnel reshuffles.

However, co-CEO Choi said the merger of the two companies has been successfully completed culturally, organizationally and legally.

"We have pursued a horizontal relationship between employees in the process of integration. What it means by that we have tried to listen to the opinion of all staff whenever a decision is made and sharing it together," Choi said.

After that, I believe the two companies will have become one team to work together, namely, we're ready, Choi added.

New platform

"Mobile, life, platform and connection are the four keywords that represent Daum Kakao's directions, We are aiming at becoming ‘mobile lifestyle platform' leader," said co-CEO Lee said during a media briefing at the Westin Chosun Hotel in Seoul.

"By organically merging the two companies' strengths in both the web and mobile sectors, Daum Kakao will be able to swiftly respond to market evolution and maintain a competitive edge both locally and globally," said co-CEO Choi.

Lee said its flagship messenger service KakaoTalk is safe from state monitoring that doesn't follow legal procedures, addressing rising worries that the government may search through private chat histories on the platform.

"We are aware of such concerns. (KakaoTalk) has top-tier security and technology, and (chat records) are saved in servers for only a short period of time," Lee said. "It cannot be leaked to someone else without being noticed."

Site Map E-paper Subscribe Register LogIn
Site Map E-paper Subscribe Register LogIn