Kakao recorded the highest performance in the second quarter despite the economic downturn. The company is going to change the growth curve around the advertising and commerce business while changing KakaoTalk, its flagship service in the second half of the year.

On April 4, Kakao announced that it recorded sales of 1.82 trillion won and operating profit of 171 billion won in April-June. Sales and operating profit increased 35% and 5% YoY, respectively. The operating margin is 9.4%. Operating costs amounted to 1.65 trillion won, up 39% from the same period last year.

The platform and content sales are all rising… Operating costs ↑

The platform division’s sales amounted to W930.7bn, up 22% from the second quarter of last year. Talk biz sales, including bizboard advertising and gift trading, increased 16% year-on-year to W453.3bn. Tokbiz Commerce Integrated Transactions amounted to 2.1 trillion won, up 29% year-on-year.

Content sales such as webtoons and music (melon) were set at W891.7bn, up 51% from the same period last year. In the case of Picoma, the number of monthly active users of the Japanese market exceeds 9.5 million, solidifying its number one business.

In addition, Picoma Europe, which entered France earlier this year, has also increased rapidly in the market. Bae Jae-hyun, chief investment officer of Kakao, said, We will expand synergy with the integrated marketing strategy following the merger of Tapas, Radish and Usia World.

However, operating costs swelled nearly 40% in a year. Labor costs and sales costs were 42%and 24%, respectively, up 42%and 24%year-on-year, respectively. Marketing costs increased 65% to 15.3 billion won, accounting for 8.5% of total sales.

Kakao business essence is advertising and commerce… KakaoTalk reorganization

Kakao is a scenario that provides new growth engines by giving power to commercials and commerce. Nam Gung-hoon, CEO of Kakao, said, It is important to clearly define our strengths and essences in the difficult market environment.

Representative Nam Gung-hoon predicted the reorganization of KakaoTalk, its flagship service. The strategy is to expand KakaoTalk profile to daily life sharing windows such as social network services (SNS) such as Facebook and Instagram, and maximize profitability in connection with advertising and gifts.

Nam Gung said, If KakaoTalk profile has been a space that expresses individuals unilaterally, it will allow emoticons to send emoticons or sympathetic through the year’s update. It is expected.

Use open chat. Nam Gung said, Open chat has grown into a service that has secured 9 million daily activity users without a separate promotion.

This month, an open chat entry point will be added to the top of the chat tab, he added. ‘More’ tab will also be connected to external life services.

Improvement of advertising business constitution

Currently, Kakao is based on a large advertisement based on toe-based large advertisements, and 1% advertiser is 70% sales. Nam Gung said, There is a disadvantage in the tightening situation of large companies.

Based on KakaoTalk, it is a blueprint that Namgung’s representative is to expand the area of advertising business by putting weight on the search advertisement (SA).

We will showcase search and content-oriented advertisements on open chat services rich in traffic within the year, he said. We will add products that advertisers in KakaoTalk will be attractive.

He also moves the weight from the image to the video advertisement. Nam Gung said, We have the largest user and strong traffic in Korea, but we did not have a lot of budget because of the lack of video advertising. I will release a model.