Asian market: about the merger of Kakao Corp and Daum
Asian deals do not affect Western and Russian audiences. We do not understand the East, we do not use its search engines, we do not download its applications, we do not know, as a rule, its languages. News from beyond the Great Wall takes place within the framework of informational, irrelevant noise. But it is precisely the current permutations (acquisitions and mergers) in the markets of Japan, China and South Korea that determine the geography of the mobile market of the near future.
How dynamic is the Asian market?
Two and a half years ago, the Japanese mobile games market was not of interest to developers and publishers for iOS and Android. The main money was made by GREE and DeNA on games for ordinary mobile phones. Today, Puzzle & Dragons, a game made by the Japanese for the Japanese, is the first and so far the only mobile game project that has earned $1 billion.
A year and a half ago, most analysts spoke of China as a region where it is almost impossible to earn money due to an excessively fragmented mobile market: hundreds of markets, an incomprehensible payment situation, and an extremely wide level of piracy. Today, Tencent's quarterly revenue from mobile games is about $289 million.
Whether we like it or not: Asia is the mobile future. And any major deal is a reason to think about what the market will be like very soon.
In light of all the above, as well as the fact that the other day India's largest online store Flipkart received investments in the amount of $ 1 billion for the development of the mobile direction, we decided to recall one of the most important "Asian" deals of the beginning of this summer - the merger of Kakao Corp and Daum into a single company with a market capitalization of $2.9 billion
Looking ahead, for the Korean market, this deal means about the same thing that it would mean for the Russian association VK and Rambler to "fight" with Odnoklassniki (which, metaphorically speaking, Line acts as in South Korea).
Andrey Kupryakhin, CEO of UFT, and Daniel Choi, regional manager at the UFT Korean office, helped us to understand the situation in more detail.
So, who are these Daums?
Daniel Choi
Daniel: Daum Communication is one of the largest Internet portals in South Korea, offering a lot of services for its users. The portal gained particular popularity in the late 90s and early 2000s. Naver, a product of the South Korean giant NHN Corporation, is currently the leader among Internet portals, but Daum's mail service is still popular.
What is Daum's role in the Korean mobile market?
Daniel: Daum Communication is primarily, of course, a desktop, Internet story. However, as you understand, they also do not stand still and somehow adapt their services to mobile devices. Currently, the company is active in the mobile market with various services, with a total base of about 200 million installations.
Why would a rapidly developing Kakao acquire this company?
Andrey Kupryakhin
Andrey: Kakao, to be precise, has acquired an additional issue of Daum shares (which has been public for a long time) and will now own 2/3 of the shares of the combined Daum Kakao company.
Why would a Korean messenger need this?
According to our data, the explosive growth of Kakao Talk has stopped. Now it is a stable company in the Korean market and moderately growing internationally.
And Kakao is a purely mobile company, and Daum is a major player in the stationary Internet market, with a long history and vast experience.
In this case, the merger of two companies implies joint development and strengthening of activities. If you want, a strong synergistic effect, which is now so necessary for Kakao, which is being squeezed by NHN.
Can I tell you a little more about what connects Naver, NHN and Line?
Daniel: Look, there's a bit of a complicated story here.
Naver is the leader among Internet companies in South Korea. The portal belongs to NHN Corporation, which is a co-owner of Line Corp. Naver in South Korea can be compared to Yandex in Russia.
Line is the brainchild of the developers of NHN Japan– the Japanese representative office of NHN Corporation. Since the beginning of 2013, Line has been a separate corporation with its head office in Japan.
What to expect from Kakao after the deal?
Andrey: For developers of mobile applications and services, it is unlikely that anything can change in the near future. Perhaps in the near future, options will be offered for access not only to the mobile version of the messenger, but also to the desktop.
Got it! Thanks for the interview!
United Fun Traders was founded in May 2005 as an international division of I-FREE with the aim of distributing Herocraft J2ME games and I-FREE VAS services outside the CIS. Currently, the main activity of United Fun Traders is the development and implementation of various solutions related to the mobile entertainment industry.