Kakao price is plummeted by a third of the peak.

 

  Kakao, the super messenger platform in Korea, has been struggling with its stock price and business strategy. Its business can be divided into three parts : Talk-Biz, E-commerce, and Messenger. Talk-Biz is the biggenst moneymaker, showing users ads on the platform. E-commerce makes money bt connecting merchants and consumers. And the Messenger business is a bait to attract people to the platform.  

 

  After enjoying a period of rapid growth, low interest rates, and a positive image form Korea since COVID-19, Kakao's reputation has fallen. Its stock price has plummeted by a third of its peak. The biggest problem is that Kakao, as the parent company of Kakao Bank, Kakao Pay, Kakao Games, etc., has been rushing to IPO its subsidaries. As you know, When a company's subsidary is spun off, inverstors who were interested in the subsidary tend to put their money in the child company, which usually leads to decreasing the value of the parent company.  

 

  On the other hand, Naver, a IT platform company, either, has been showing a different vibe. Naver has never IPO'd a single subsidiary. What has made investors satisfied with Naver is that it is keeping up with new trends, such as AI. Of course, Naver is facing a threat from the tech giants Microsoft and Google, which have launched large language models(LLMs). People are flocking to their platforms to use these highly skilled AIs that even offer a wide variety of languages for free. Naver is trying to counter this threat by launching its own LLM specifically for the Korean language. It has a lot of data written in Korean, and unlike other countries where Google is usually dominant, more than 60% of Koreans use Naver search. Whether or not Naver's platform can bear the cost of maintaining an LLM, it has the AI skills that the tech giant have. This is a testament to Naver's competence.