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Kakao Talk Passes 16 Million Users, Now Where’s The Profit?

A few days ago, Kakao Talk announced over 16 million users. Earlier this year, Kakao Talk introduced a service where users can send gift certificates for items like coffee, pizza and chocolate.. While the service generated millions of dollars in revenue per month from launch, it was rumored Kakao’s Talk cut of the revenue was around 2 percent.

So the question is, where will Kakao Talk find revenue going forward? The company now employs dozens of employees at salaries above the average range in Korea. Server costs are sure to be high. Sooner or later, Kakao will have to find an additional revenue source.

Is the SMS/MMS marketing market the next route? Kakao Talk has already taken a large chunk of SMS/MMS revenues carriers used to make. Now, will they look to take a chunk of Business to Consumer revenues?

A friend of mine received a SPAM SMS from Kakao the other day for Internet service. These messages are sent by businesses at a cost of around 12 to 15 won through SMS gateways. What if Kakao offered a B2B service where they allowed businesses to send messages to their customers with Kakao for a smaller fee? Let’s say, 2 or 3 won per message. This would be a no-brainer for companies who do SMS/MMS marketing and could turn into a lucrative service for Kakao Talk.

Perhaps they’ve already started. The message was sent from a user with the name “kakao.”

Posted on June 21, 2011 at 2:48 pm

Categories: Business, Mobile

Written by

A web media veteran and guru who has developed and marketed numerous, successful Web sites for both the Korean and Western markets. We’d tell you which ones, but then we’d have to kill you… and that’s that’s not the type of startup we’re supporting here. We can tell you, along with managing the Seoul Space web site and technical needs, Victor is currently preparing to launch a site called PUMPL in the Korean market. He is an avid Mac user and enjoys long walks on the golf course during his spare time.