Namkoong Whon and Hong Eun-taek, co-CEOs of Kakao Corp., bend their heads at a press conference on Wednesday, October 19, 2022, at Kakao’s office in Pangyo, South Korea. A senior executive of Kakao, the biggest mobile messaging app in South Korea, resigned on Wednesday due to a widespread service outage that led to a flood of complaints in a nation that depends significantly on such technology.
Reason for The Resignation
To concentrate on his role as the head of the company’s emergency task force for resolving the technical issues exposed by the outage, which was brought on by a fire at a data center outside of Seoul on Saturday, Namkoong Whon, who was appointed Kakao’s co-CEO in March, said he would resign.
In the beginning, the fire rendered most of Kakao’s services inoperable, causing a significant inconvenience in a nation where millions of people depend on the apps to message friends, send money, and call for cabs. According to critics, the severity of the outage and Kakao’s sluggish recovery efforts highlighted the company’s inadequate backup procedures and excessive reliance on external servers.
As of Wednesday morning, according to the company, most of Kakao’s services were running regularly. Kakao’s servers are kept on SK C&C’s servers, which”I feel worse than ever because of the data center fire, and I take my solemn obligation very seriously. Namkoong stated at a news conference, “I will step aside to show Kakao’s willingness for reconstruction and transformation.
Hong Eun-taek is now the sole CEO of Kakao. In the city of Ansan, he claimed, the business is spending 460 billion won ($322 million) to construct its data center, which it intends to finish in a year. By 2024, the business intends to build another data center in the adjacent Siheung.
During the news conference, Hong stated, “We have learned from the incident, and our own data centers will be designed as facilities that will be safe from fires and natural disasters like earthquakes, tidal waves, and typhoons.”
Kakao’s free chat app reportedly had 45 million active users as of April, a significant number in a nation with a population of over 51 million. Thanks to the app’s popularity, the business has recently expanded into banking, online shopping, and Uber-like taxi services. Additionally, it has contributed to the nation’s COVID-19 response through its app, enabling reservations for vaccines and using QR codes for infection tracing.
According to WiseApp, the number of Kakao chat users fell to about 39 million during the weekend downtime as consumers switched to Facebook Messenger, Telegram, and Naver’s Line, among others.
A South Korean internet firm called Kakao was founded in 2010. It was created due to the combination of the old Kakao Inc. with Daum Communications. The business changed its name to Daum Kakao in 2014. In 2015, the business changed its name once more to Kakao.
The business bought Path, an American social networking startup that has flourished in Indonesia, in May 2015. For $1.5 billion in January 2016, Kakao purchased a 76.4% share in LOEN Entertainment, a sizable South Korean entertainment conglomerate. Later, it adopted the Kakao M moniker. KakaoTalk, a free mobile instant messaging program for cell phones with free text and free call features, has helped the business become more well-known. The app had 220 million registered users as of May 2017 and 47 million monthly active users.
The business is vying with Naver as of March 2022 for the top spot in the Japanese webcomic and web book market.
When Kakao’s messenger, ride-hailing, payment, banking, and gaming services experienced a massive outage during the weekend in October 2022 due to a fire event at an SK C&C data center in the south of Seoul, Namkoong Whon, the co-chief executive, resigned.
Yoon Suk Yeol, the president of South Korea, stated that the company’s service outage revealed the challenges with its strong market presence and added that the nation’s antitrust body was looking into competition-related issues.
“The government should, of course, respond with required measures to defend the interests of the people if a market gets distorted by a monopoly or a severe oligopoly, especially to the level that the (services) begin to function like a national infrastructure,” Yoon said on Monday.