Seoul, KOREA ¶ Apr. 12, 2012 (Whowired) -- Can a business in good faith make a "good" deal of money? If the question is raised to the CEO of Kakao Talk (the cross platform mobile messaging service) and Kakao Story (the social networking service based on a profile album), the answer is a resounding "yes."
Emoticons sales from Kakao Talk best exemplify or even vindicate the case for "good-will" business model. Custom emoticons created by popular webtoonists go on sale and when profits can be made, the company and the writer can receive the half the profits respectively. Given that it is increasingly hard for cartoonists to make some money in conventional ways, this will well serve as an effective window to profit-making and nurturing artists' creative passion in some ways.
Emoticon sales alone can't hit a jackpot, so the company is examining varied business potential, experimenting with a series of trial-level businesses, mostly combining merits of mobile commerce, gaming, social networking services on their next-generation goodwill business in terms of profit-making and social responsibility.
Explosive growth of Kakao Talk and Kakao Story lends credibility to the business model's blueprint. The pace of Kakao Talk, for example, has been quite phenomenal; the daily number of text messages sent and received via this app platform (which is free) now stands at about 2.6 billion per daily — nearly ten times that of combined mobile messages using 'paid' wireless services from Korean top three carriers. Meanwhile, "Plus Friend," the additional service which allows you to receive "free" discount digital coupons when making friends with a company, sees its users numbering over 35 million.
Driven by impressive success of Kakao Talk, the company launched Kakao Story in late March this year, and it is observing a wild reaction among users; the number of subscribers reached 10 million just nine days after the launch and it's expected the user base should catch up with that of Kakao Talk in the near future.
Dubbed as the "Korean version of Facebook," the popular SNS was ranked the most popular application in the favorite iPhone App Download Rankings in Korea—for two consecutive weeks—beating the seemingly invincible Angry Bird. Some attributes the success of Kakao Story to its feature similar to Instagram, a free photo sharing site recently acquired by Facebook.
As with the case of Facebook, which is worth $100 billion by some measure, the longer-term value of "Korean Facebook" or Kakao Talk is proving quite promising. The center of gravity in terms of SNS user bases is shifting into mobile platforms at a faster clip, the potential of this mobile-based business model is significantly rising as well.
In reflection of such big potential, Chinese Internet gaming company Tencent and Korean gaming company Wemade Entertainment decided to invest 92 billion won (about US$90 million) in Kakao Talk, with the Chinese entity contributing 72 billion won (or 78 percent) and Wemade adding the remaining 20 billion. The two companies are betting on huge user bases generated by the ongoing popularity of Kakao Talk and as such, Kakao Talk is considering a range of new business models believing "bigger traffic is highly likely to entail bigger money" accentuated by Mr. Seok-woo Lee, the CEO of Kakao Talk.
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