'Jungsin A's Second Term' Kakao Accelerates AI-Centered Business Restructuring (Comprehensive)

Jung Shin-ah, who has been confirmed for another term as CEO of Kakao, will focus this year on streamlining non-core businesses and strengthening the company’s business structure, while also driving AI-centered business growth.

At the regular shareholders’ meeting held on the morning of the 26th at Kakao’s Space Dot One headquarters in Jeju City, CEO Jung stated, “This year, we will move beyond simply restructuring and shift our focus to healthy growth centered around AI and KakaoTalk.”

Jung Shin-ah, CEO of Kakao, is holding the regular shareholders' meeting on the morning of the 26th at Kakao's Space Dot One headquarters in Jeju City. Kakao

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At the shareholders’ meeting, the agenda item for Jung’s reappointment as an internal director was approved. All other agenda items, including approval of consolidated and separate financial statements, amendments to the articles of incorporation, appointment of outside directors, and the cancellation of treasury shares, were also passed.

CEO Jung presented goals related to improving Kakao’s performance. She said, “We have set a target of more than 10% annual consolidated revenue growth and an operating margin of 10% for this year,” emphasizing, “During my term, I will work to deliver short-term performance improvements while also striving to turn the growth potential that shareholders expect into tangible results.”

Jung has been credited with leading both stability and growth across Kakao’s operations over the past two years. One notable example is the company’s move to organize its non-core subsidiaries, responding to criticism of Kakao’s so-called “octopus-style management.” Immediately after taking office, Jung began restructuring affiliates unrelated to Kakao’s main business, reducing the number of subsidiaries from 132 to 94 by the end of last year, a decrease of about 30%.

Kakao’s business streamlining has continued into this year. Just the previous day, Kakao Games announced that LAAA Investment-a special purpose vehicle funded by LINE Yahoo-would acquire a portion of its shares and participate in a third-party allotment capital increase worth 240 billion won, as well as a 60 billion won convertible bond (CB) issuance. Once the transaction closes in May, LINE Yahoo will become the largest shareholder, with Kakao stepping down to the position of the second-largest shareholder, effectively transferring management control of Kakao Games to LINE Yahoo. The content CIC (Company-In-Company) that operates the portal site “Daum” has also spun off as AXZ and is currently undergoing due diligence for sale to Upstage.

Performance is also improving. Kakao’s consolidated operating profit last year was 732 billion won, up 48% year-on-year, while revenue for the same period grew 3% to 8.0991 trillion won. Both sales and operating profit reached record highs, with the significant increase in operating profit attributed to the effects of subsidiary restructuring.

Regarding the winding down of non-core businesses, Jung stated, “We are now in the final stages of strengthening our fundamentals by reducing the number of subsidiaries,” and added, “Any future initiatives will focus on collaborating with strategic partners rather than undermining employment stability or the company’s stability.”

Kakao Tools. Kakao

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Over the next two years, Jung plans to focus on strengthening and monetizing AI capabilities, including agentic AI. She stated, “This year, we aim to expand opportunities for users to use AI services on KakaoTalk daily and experience convenience through AI agents in everyday life. By the end of this year, numerous external partners will be connected to Kakao’s AI ecosystem, and we will showcase the initial version of our differentiated AI agent.”

By the end of this year, Kakao will connect a variety of external partners to its AI ecosystem via Play MCP and the AI Agent Builder. Through “Kakao Tools”-an AI agent service for use on ChatGPT for Kakao-external services can be integrated within a single AI agent.

At last month’s earnings conference call on the 12th, Jung also surprised the market by revealing Kakao’s collaboration with Google. Kakao plans to adopt Google’s proprietary AI chip, the Tensor Processing Unit (TPU), and work on building an interface for Google’s extended reality (XR) device, the AI Glass. In February of last year, Kakao became the first Korean company to form a partnership with OpenAI, providing the “ChatGPT for Kakao” service within KakaoTalk.

At the shareholders’ meeting, there were a series of questions from shareholders regarding the recent weak stock price and requests for shareholder return policies. Jung responded, “I feel a heavy sense of responsibility for the concerns caused by the poor stock performance,” and added, “I am taking the frustration and criticism expressed by shareholders very seriously.”

She continued, “We will continue to drive earnings growth in our platform business centered on KakaoTalk, while also building a differentiated agentic AI ecosystem and concretizing our business model for monetization.”

Jung also announced plans for shareholder returns. First, the total dividend for 2025 will increase by 10% compared to the previous year, and more than half of the treasury shares held (1,420,723 shares) will be canceled. Canceling treasury shares is expected to raise the value of the remaining outstanding shares by reducing their number. The dividend per share will be 75 won, totaling 3.3 billion won. The remaining 1,006,741 shares will be allocated for employee compensation purposes.

She also expressed her intention to actively incorporate user feedback. This appears to be in response to criticism received following the major KakaoTalk update last year, which included changes to the Friends tab. Jung stated, “Before launching any AI-related services or features in the first half of this year, we plan to introduce the ‘Kanana Lab,’ where KakaoTalk users can try out the services in advance and provide feedback.”

Regarding the controversy surrounding Hong Min-taek, Chief Product Officer (CPO) of Kakao, during the update process, Jung stated, “We will continue to change the top-down decision-making culture so that decisions are not simply handed down internally.” This is interpreted as an acknowledgment of concerns that CPO Hong pushed through the Friends tab update despite internal opposition at the time.

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