Where does Kakao Talk go from here?

Kakao Talk, a mobile messenger application downloaded by almost all smartphone users here, is successfully expanding its business scope by making full use of its huge user base. The venture company is evidently enjoying the first-comer advantage in networking services where the number of users matters more than anything else.

Kakao Talk launched Kakao Story, a mobile social networking service based on a profile album Tuesday. One can upload stories with photos taken by smartphone cameras to share with friends who can post replies. It is linked with Kakao Talk and boasts an intuitive user interface that makes it easy for anyone to use.

It has received a wild reaction, rising to the top in the social networking category of Apple’s App Store on the first day of its launch and becoming the most popular free app after a day. It triggered the curiosity of non-smartphone users as well, becoming the top keyword at local portals. The number of subscribers reached 5 million Friday in only three days, and the number is expected to near 10 million soon.

Kakao Story owes it to the success of Kakao Talk, which boasts 42 million users exchanging 1.3 billion messages daily. Launched in March 2010, it has marked explosive growth amid the penetration of smart devices. It successfully took over the mobile messenger service market, the killer service for smartphone applications. “As mobile messenger services have a low entry barrier, diverse businesses, ranging from portals and handset manufacturers to venture companies, have been launching the service,” ROA Consulting, an IT consulting company, said in a report. The competitors of Kakao Talk are trying to differentiate their services by providing more than text messaging.

It seems difficult, however, if not impossible, for them to catch up. “In the mobile messenger market, it is a game in which one draws more users and traffic. It is not a game of differentiating services or setting up concrete profit models,” ROA added.

According to a survey, 72.4 percent of smartphone users said they won’t buy smartphones that don’t support Kakao Talk.

The ultimate goal of Kakao Talk, which doesn’t have a concrete profit model yet, is to become a mobile platform. It has launched marketing tool Plus Friend and is providing diverse content such as Web cartoons, weather forecasts and news. Diverse services are also suggesting joint business with Kakao, seeking synergy. Kakao Story is part of the move to accelerate the expansion, and mobile games are likely to be its next target.

According to industry sources, Kakao Talk is planning to expand its scope to the game business as well, launching mobile games for Kakao Talk users. Wemade Entertainment, a mobile game developer which invested 5 billion won in Kakao Talk last year, is working with the firm to launch smartphone games together.

Choi Hoon, an analyst at KB Investment & Securities, compares the coupling of Kakao Talk and Wemade Entertainment to that of Facebook and Zynga. Facebook, which boasts 900 million subscribers around the world, became the biggest social game platform, thanks to its massive number of users.

“The coupling of Kakao Talk, which boasts 42 million users, with mobile games of Wemade Entertainment will accelerate the latter’s advancement in social networking games,” he said. “In the local market, Kakao Talk is enjoying an absolutely huge number of users… mobile games can expand fast based on Kakao’s 11.3 million users.”

He said while mobile games are expecting increasing competition due to a low entry barrier, the partnership similar to that of Facebook and Zynga will increase the likelihood of their success. <Korea Times/Yoon Ja-young>

news@theasian.asia