Kakao co-CEO steps down, company to invest over $300m to build data center after massive outage

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Whon Namkoong, the co-CEO of Kakao, resigned in a remarkable show of corporate responsibility after a fire at an SK C&C data center in southern Seoul caused a massive outage over the weekend and disrupted several Kakao services, including messaging, ridesharing, payment, banking, and gaming.

Namkoong, who joined Kakao in 2015, was elevated to co-CEO in March. At a press conference on Wednesday, Namkoong apologized for the massive outage “for such a long period” and said he felt “a heavy burden of responsibility” for the incident, adding that the company would do its best to restore the trust of users. .

Euntaek Hong, head of ESG at Kakao, who led the company alongside Namkoong and currently leads Kakao’s emergency task force team, will remain with the company as Kakao’s sole chief, according to a company file.

Kakao said today morning he had restored additional services like Kakaomail and TalkChannel. Most of its services are running near full capacity, with some remaining partially unavailable.

KakaoTalk is the most popular messaging app in South Korea, reaching more than 47 million of the country’s 51.7 million people every month. The app is also used by government officials and businesses, including banks, ride-sharing services, and payment players.

Kakao’s slow recovery process was caused by the lack of company-owned server infrastructure and its “heavy reliance” on the SK C&C data center, which caught fire, Bernstein analysts said in a statement. report this week. Kakao also lacked a well-distributed backup system, they added.

Hong told a press conference today that the company plans to invest KRW 460 billion (~$325 million) to build its own data center starting next year, with the aim of complete it the following year.

South Korean President Yoon Suk-yeol said Monday that KakaoTalk is practically a national communications infrastructure.

Kakao shares fell on Monday but rallied slightly on news of Namkoong’s departure.

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