KakaoTalk blunder: What went wrong with Korea’s largest messaging app

It has been a turbulent week for Kakao. It ambitiously announced, on Sept. 23, that it would turn its flagship KakaoTalk messaging app into an Instagram-like social platform and maximize ad revenue by locking in users. However, it decided to roll back the new service five days later following severe criticism from users over multiple "unwanted" functions.

Industry officials note that the rollback symbolizes more than just a misreading of user preferences. Rather, it highlights deeper flaws in Kakao’s overall decision-making process, which once made the app the country’s most beloved platform and enabled the company to build a mobile platform empire.

The tech giant announced Monday that it will bring back the previous list-style format for the Friends tab, which is shown as the messaging app’s main page, while moving the updated feed-style posts to a separate tab.

Since its launch, the feed-style tab had been the target of mounting complaints from users, as it showed profile photos of a user’s friends — along with ads — in a random, Instagram-like format.

Since KakaoTalk automatically saves friends through users’ phone numbers, many users say they suddenly found themselves “having a social media account that follows hundreds or even thousands of unintended contacts — all without their consent.” Every time a KakaoTalk friend changed a profile picture, it appeared in the feed, forcing users to see personal updates from acquaintances they had no interest in following.

In doing so, Kakao also complicated the interface for accessing one's contacts, which goes against the app’s core purpose of messaging.

Since the update, users have been scrambling for a way to roll back the function and even seeking alternative messaging apps. But because KakaoTalk has become an important piece of digital infrastructure in Korea, public discontent has only grown louder.

Upon announcing the update on Sept. 23, Kakao stock price fell 4.67 percent to 63,300 won and plunged 6.17 percent again to 59,300 won on Friday as users' complaints grow. It gained 1.69 percent after Kakao announced the rollback on Monday, but again slid 1.16 percent on Tuesday. During this period, Kakao’s market cap shedded 1.64 trillion won ($1.16 billion), more than three times its 2024 operating profit of 491.5 billion won.

KakaoTalk's updated Friends tab / Courtesy of Kakao

Kakao has explained that the update was aimed at providing “more convenient chat experiences.” But ad-tech industry officials say the underlying goal was to maximize advertising revenue by keeping users on the platform longer and creating more ad space.

So far, Kakao has said that it has no plan to charge fees for its KakaoTalk service, but at the same time it has been considering a monetization plan to boost the messaging app’s stagnant revenue growth.

KakaoTalk’s business revenue peaked at 537.6 billion won in the fourth quarter of last year, but declined for two consecutive quarters to 513.9 billion won in the second quarter of this year. During the April-June period, KakaoTalk’s ad revenue reached 307 billion won, accounting for 60 percent, as sales from its e-commerce business slid, meaning the company faced the need to maximize its ad sales.

“Unlike Instagram, where users explore feeds based on their interests, KakaoTalk friends are mostly connections saved out of necessity rather than shared interests,” Korea Investment & Securities analyst Jung Ho-yoon said. “It remains uncertain whether users will engage with the feed’s content and ads as they do on other social media platforms.”

Kakao Chief Product Officer Hong Min-taek introduces new updates to the KakaoTalk messaging app during a conference in Yongin, Gyeonggi Province, Sept. 23. Courtesy of Kakao

Questions on approach

For years, Kakao has been using a feature called “KakaoTalk Lab” to test new functions or updates in the app and gather user feedback. Through this function, users were able to decide whether to try out newly introduced features, allowing Kakao to collect user feedback before formally rolling out updates.

“The reason Kakao had taken such a cautious approach is because KakaoTalk has an enormous influence on the Korean public, and this requires that level of prudence,” an industry official said. “The same goes for Naver and other apps with dominant market positions, which tend to be extremely careful when designing and rolling out updates.”

However, this time that was not the case. The update, known internally as the “Big Bang Project,” was led by Hong Min-taek, Kakao’s chief product officer and former Toss Bank CEO, who joined the company in February.

This means that the update, which Kakao promoted as the most important overhaul in 15 years, came just months after he joined the company, even without user feedback.

Several internet users identifying themselves as Kakao employees left comments on Blind, a workplace community app that requires authentication, claiming the update was pushed unilaterally by the company’s top management, particularly Hong, despite opposition from developers and designers.

Those employees claimed that Hong and others who moved from Toss with him ignored opposing views and labeled those who resisted the update as “public servants," implying they refused to accept changes.

Amid the ongoing criticism, Hong reportedly wrote on Kakao’s internal community on Monday that the update was intended to expand social features while strengthening messenger services, not to scale them back. He also noted that key indicators such as app downloads and traffic have remained steady despite user complaints.

This has led to criticism that Kakao may have lost its corporate philosophy of embracing user feedback and experimenting with innovative services.

“The feed-style format has already been around for 10 years and offers no fresh experience to users,” another industry official said.

“The voice talk summary, artificial intelligence agents and short-form videos promoted in the latest update are services available on other platforms, and users are already fatigued with them. Kakao has failed to explain why these should be used on KakaoTalk. The controversy is not just about the messaging app becoming inconvenient, but about whether Kakao still has the pioneering spirit it once had.”