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Kakao runs South Korea's dominant messaging app and makes money from advertising, games, music, fintech, and ride-hailing built on top of it.
Kakao is best understood as South Korea's everything app. What started as a free texting app called KakaoTalk — used by almost everyone in the country — has grown into a sprawling collection of services that Koreans touch throughout their day: messaging friends, hailing a taxi, paying at a store, reading webtoons, listening to music, and playing games.
The core of the business is the chat app itself. KakaoTalk is free, but it is the front door. The company earns money by selling advertising inside the app, by selling "emoticons" and digital items, and by pointing users toward its other paid services. The biggest of those is Kakao Pay, a payments and financial services arm, and Kakao Mobility, which dominates the country's taxi-hailing market. Kakao also runs a music streaming service (Melon) and a webtoon and content business through Kakao Entertainment, plus a games division through Kakao Games. Each of these plugs into the chat app's giant user base, which is why the whole thing works as one machine rather than a dozen unrelated businesses. For all its reach, Kakao is not a wildly profitable company. Growth at home is limited because nearly every Korean already uses its app, so the company has spent heavily expanding into new areas and looking abroad, where it has struggled to replicate its dominance. It has also had to contend with regulators and politicians, especially in Korea's crowded markets. The company has been criticized for being too dominant in some areas and for governance issues tied to its controlling shareholder, Brian Kim, who was arrested in 2023 and later acquitted.
The company's stock has fallen far from its 2021 highs as investors wait for the next big profit driver. The bet on artificial intelligence and overseas expansion is the story to watch: Kakao wants its app to become the gateway for AI services in Korea the way it became the gateway for messaging. Whether that pays off is the central question hanging over the business today.
Saved answer · last researched 6 Nov 2026