By Cho Mu-hyun
Kakao Talk, the immensely popular mobile messenger service, had mostly negative headlines about server shutdowns over the past month in place of good news on the company which has tried desperately to become lucrative.
However, the company has come up with something that might prove to be its ``Holy Grail.’’ Last week, it announced a ``Voice Talk’’ service that will begin in Japan as a toll-free and completely accessible feature for anybody with a mobile device.
“The voice service is an excellent idea and a solid attempt for Kakao Talk to start transforming into a business model that brings profit,” said Lee Seoung-ju, organizer of Mobile Monday’s Seoul chapter and an expert in mobile technology. “Once the service is widely disseminated, Kakao can incorporate such things as advertisements and commercials in various ways into the voice service to provide earnings.”
However, it is not yet known when the service will be available for domestic users. Telecommunication companies here are reportedly strongly against the services, as it will put Kakao Talk in direct competition to a service, which was exclusively theirs.
“The relationship with the telecommunication company is a problem that Kakao must solve. Kakao Talk’s base of operation is Korea, so for the company to grow it must make a strong impact on domestic services first for it to rise globally as well,” said Lee.
Out of some 50 million total users of the messenger, around 37 million are estimated to be Koreans, and their support is a prerequisite for the company to have a strong enough backbone to attempt overseas ventures.
Although the voice call services started trials on February in Japan, three months of feedback from users is insufficient to judge whether or not the quality of the calls can match that of mobile service providers.
Ensuring good quality phone calls, especially international ones, and customer services to supplement them is groundwork that Kakao Talk needs to establish first, says Lee.
Besides their mainstay messenger service, the company launched its social network service Kakao Story in March. Working in collaboration with game company WeMade Entertainment, Kakao Talk will also release a gaming service starting on July. Taking full advantage of information technology’s fast development that is making borders between different platforms ― PC, mobile devices, and tablet PCs ― meaningless, Kakao Talk is showing aggressive diversification in its portfolio.
But there are unavoidable contingencies that arise in any firm’s growth that get in the way.
Due to its large user base, a mere 10 minute shutdown on May 20 between 9:50 a.m. to 10:00 a.m. was enough to cause strong protests and vehement attacks on the firm founded by CEO Lee Jae-beom.
It was later announced by Kakao’s Internet data center provider Korea Internet Neutral eXchange (KINX) that the accident was due to a construction accident that cut a cable.
Less than a month before on April 28, the server was paralyzed for over four hours between 2:50 p.m. to 7:00 p.m., because of a temporary power shortage at the Internet data center.
Kakao Talk issued a long apology following both instances, and though initial reactions from users were hostile, more and more support became visible on the service’s official website.
“The server shutdown was an unpredictable matter. For a relatively young company like Kakao Talk, it is part of the trial and error process. Though it could happen to any firm, the main issue is consumer trust. For a company to become global, a strong faith in its service from consumers is the most important thing,” says Lee.
It is too early to connect Kakao Talk’s potential to direct “value,” according to market analysts. Values of Internet companies are sometimes overrated: Facebook’s initial public offering (IPO) on a stock price of $38 on May 18 has declined to $31.90 as of Thursday, being called the worst IPO disaster in the past decade.