It said in a regulatory filing on Monday that after it normalises services, it will discuss compensation with data centre operator SK C&C for losses sustained by Kakao and its key units. Kakao reported 330 billion won ($229.74 million) in operating profit during the first half of 2022. “What is important would be user traffic trends after full service recovery.” “Assuming that the damage compensation range is limited to paying users, the effect on operating profit is estimated to be about 12 billion won,” said Kim Jin-woo, analyst at Daol Investment & Securities. Kakao is not expected to suffer a large financial hit from compensation, but the reputational hit and future blowback is what matters if businesses and consumers seek to reduce their reliance on Kakao, analysts said.
Kakao’s messenger app Kakao Talk has more than 47 million active accounts in South Korea and 53 million globally, the company said in a report in August, making it one of the most ubiquitous apps in the country of 51.6 million. Police and the National Forensic Service are conducting a second investigation on Monday at the data centre, which is operated by SK C&C.Īfter an initial probe on Sunday, police said electrical issues around battery racks in third basement floor of the data centre may have caused the fire. “Parliament audits are ongoing right now, and it’s likely to spread to the issue of platform monopoly regulation.” “Basically it’s a free service and how compensations will work for paid services is ambiguous, but it’s being seen as a national communication network, not a private one,” said Choi Yoo-june, analyst at Shinhan Financial Corp. A Kakao spokesperson told Reuters on Monday core services such as messaging were back online, although some minor applications were still being restored.
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