South Korea’s largest mobile platform operator Kakao Corp. is readying a diverse-spec pipeline in new services ranging from hair shop to parking and cleaning to broaden online-to-offline (O2O) choices for both supply and receiving end and generate new revenue for the company.

During the global IR conference for major KOSDAQ companies held in Singapore last week, Choi Yong-seok, Kakao’s Investor Relation director, pitched on the growth potential of Korea’s leading social media platform which has been diversifying and expanding fast on the commercial front.

During the event where 16 KOSDAQ firms attended, Kakao received the largest number of calls from institutional investors.

Regarding Kakao’s response to Naver’s aggressive marketing to be fueled by IPO of Japanese subsidiary LINE Inc., mobile messaging platform of Naver. Choi emphasized that unlike Naver, Kakao is more committed to enrich the domestic market first although Kakao has turned its attention globally by starting a social media service in Indonesia. “Both Naver and Kakao are looking for a new source of cash cow beyond portal and search engine models. Naver is injecting money into LINE, but Kakao pins hope on O2O services.”

Kakao launched Kakao Driver, a driver-for-hire service, late last month and is preparing to add to hair shop, car parking and home cleaning to the O2O portfolio in the second half of this year.

Choi said profits from Kakao Driver are expected to be reflected from the third quarter and the company is looking for various profit models for Kakao Taxi and other O2O services.

The biggest contributor to Kakao’s top-line growth is mobile game. Sales from its game platform were 70.3 billion won ($61 million) in the first quarter, up 23 percent from a year ago, recovering the level in the previous year. The increase was driven by upbeat sales from its PC online game ‘Black Desert’ launched in North America and Europe in March.

But poor sales from advertisement business are worrisome. Sales from Kakao’s ad platform in the January-March period were 129.4 billion won, down 11 percent from a year ago and 16 percent from the previous quarter. In particular, online ad sales fell by more than 20 percent.

Earnings from LOEN Entertainment acquired by Kakao in February will be reflected from the second quarter. Kakao said it will continue to acquire promising startups to leverage them for business diversification.

By Bae Mi-jung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]