Shares of Korean internet giant Kakao slide after fire disrupts service • TechCrunch

The stock price of South Korea’s internet giant Kakao tumbled on Monday just after a hearth at a info center that lower off energy on Saturday, producing several support malfunctions.

The blaze at the SK C&C facts centre, which residences the servers of Korea’s two biggest net businesses — Kakao and Naver — disrupted Kakao’s messaging, experience-hailing, payment and sport applications, and Naver’s web look for and news services, above the weekend.

Some disruption is ongoing — largely influencing Kakao’s companies.

On Monday morning, Kakao’s share cost dropped far more than 9%. Its peer Naver also slid 2% at the opening of investing just before recovering.

At the time of producing, Kakao claimed it experienced restored KakaoTalk, the country’s dominant messaging app — with much more than 46 million regular lively consumers in South Korea as of September 2022 and 53 million globally. On Monday afternoon it also mentioned it had finished recovering its fiscal services. But some other expert services are continue to down.

In the meantime, Naver, which faced partial disruptions as a result of the hearth on Saturday, promptly restored most of its operations on Sunday.

According to a report by Bernstein, Kakao’s gradual restoration approach was induced by the company’s absence of owned server infrastructure and “high dependence” on the SK C&C information middle. It also highlights Kakao’s lack of a perfectly distributed backup system. The report pointed out that Naver was in a position to resume its main products and services immediately mainly because it has owned server infrastructure and a effectively-designed backup system.

KakaoTalk stays the dominant messaging company in South Korea and the Bernstein report predicts it will preserve its situation inspite of the outage, specified how far driving its rivals are in marketshare phrases. Moreover, it details out that Kakao’s messaging app is linked to other products and services these types of as Kakao bank, payment and journey-hailing solutions, so consumers are not likely to change the application with a lot less totally showcased solutions like WhatsApp or Telegram, for every the report.

The second greatest messaging app right after Kakao in South Korea is Facebook Messenger but it has only 3.9 million MAU as of September 2022. Even though Naver’s messenger application, Line, has about 1.6 million month-to-month energetic people.

Korea Internet & Media by Bernstein

In its assertion on Saturday night time, Kakao said the hearth broke out at all over 3:30 PM (neighborhood time). It included that it is investigating the issue.

A statement by Naver on Saturday afternoon reported it is mindful of troubles impacting its solutions as a end result of the hearth.

South Korean President Yoon Suk-yeol also manufactured public remarks on Monday next the incident — remarking that a non-public business operates KakaoTalk but describing it as almost a countrywide communications infrastructure. Yoon called on the governing administration to look into the specific will cause of the hearth. “I respect corporate autonomy and creative imagination, but that is dependent on the premise that the industry moderately allocates sources and profits in a technique of truthful level of competition,” Yoon claimed. “If a monopoly circumstance results in market manipulation, the federal government ought to choose systemic motion.”

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