April 19, 2024

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[THE INVESTOR] Korea’s largest mobile messenger operator Kakao said on Nov. 9 that it plans to create an artificial intelligence ecosystem, reaffirming its decision to collaborate with conglomerates including Samsung Electronics and Hyundai Motor Group.

“Kakao aims to build an AI ecosystem, offering its technologies to partners to help their business thrive,” said CEO Rim Ji-hoon in a conference call held after the firm announced its third-quarter earnings.

He added that the firm, which also runs web portal Daum, will roll out products and services running on its AI platform Kakao I in partnership with Samsung, Hyundai, and GS Engineering & Construction.

Samsung’s AI assistant Bixby will likely be available on KakaoTalk, the most-used mobile messenger in Korea, from next year while Hyundai has already deployed a voice recognition solution based on Kakao I in its luxury sedan G7.

According to its regulatory filing, Kakao posted an operating profit of 47.4 billion won (US$42.60 million) in the third quarter, up 57 percent from a year earlier, while its revenue came in at a record 515.4 billion won, up 32 percent on-year.

Its content platform business, which earned 261.5 billion won in sales, and the advertisement platform business, which generated 151.5 billion won in revenue, drove the profit increase.

Kakao said during the conference call that it plans to spin off its game business unit KakaoGames in 2018.

When asked if the Pangyo-based firm has IPO plans for other business units, such as KakaoPage, CFO Choi Yong-seok said the firm is planning to list some of its affiliates on the Korean stock market but has not decided on the details.

Regarding its money-losing transportation business platform, Kakao T, the company forecast that things would turn around in the first quarter next year.

“As Kakao has recently spun off KakaoMobility, an affiliate in charge of overseeing Kakao’s transportation services, the initial plans to build a concrete revenue model in the fourth quarter have been slightly postponed,” Choi said, adding the first quarter next year will be a turning point.

By Kim Young-won (wone0102@heraldcorp.com)