Kakao Eyes User Trust Recovery in H2 After Record Earnings

Kakao achieved record quarterly earnings in the second quarter, fueled by strong performance in its advertising and commerce sectors. The company is now shifting its focus to a "user-first" strategy for the latter half of the year, aiming to mend public opinion and rebuild user trust following a widely criticized KakaoTalk update last September.

The messaging giant launched "Kakao is Now," a dedicated page to foster communication with users regarding KakaoTalk enhancements. This initiative seeks to integrate user feedback, gathered through app store reviews and customer service channels since last year's overhaul, into upcoming service updates scheduled to begin in October.

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We have challenged and proven short-term revenue growth, but ultimately, long-term growth stamina comes from user preference and trust.

Last year's major update, the first in 15 years, focused on increasing user engagement by introducing short-form content and redesigning the friends tab into a feed format. However, it faced significant backlash, with a flood of one-star reviews appearing on app markets.

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We have confirmed that applying service changes all at once, as we did last year, is not effective. Therefore, we plan to gradually incorporate new KakaoTalk features into monthly updates.

Despite the user criticism, the company's financial performance saw a boost. Increased revenue from expanded advertising space contributed to Kakao's record-breaking second-quarter results. The company's CFO described this as the platform business, centered around KakaoTalk, re-entering a "structural growth phase."

Kakao's primary challenge remains regaining user confidence. As a messenger deeply integrated into daily life for millions, user trust is paramount to its competitive edge. CEO Shin Dong-ah emphasized this in an all-hands meeting, stating, "We have challenged and proven short-term revenue growth, but ultimately, long-term growth stamina comes from user preference and trust." She pledged to prioritize user input in all stages of service planning, development, and launch.

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The platform business, centered around KakaoTalk, has re-entered a structural growth phase.