Kakao's co-CEO steps down amid public anger over chat app outage - Reuters

SEOUL, Oct 19 (Reuters) - Kakao Corp's (035720.KS) co-CEO Namkoong Whon resigned connected Wednesday arsenic South Korea's largest mobile chat app sought to defuse nationalist anger implicit a monolithic outage that near tens of millions without entree to a wide scope of services.

The institution has pledged to summation concern to guarantee continuity astatine the information centres it uses amid increasing interest astir the app's marketplace dominance successful Asia's fourth-largest economy.

Namkoong's resignation comes lone 7 months aft helium took the apical occupation and leaves co-CEO Hong Euntaek, appointed successful July, arsenic sole CEO.

The 2 apologised for the outage that started connected Saturday owed to a occurrence astatine a information centre tally by SK C&C (034730.KS) adjacent Seoul, which chopped disconnected powerfulness to 32,000 servers, oregon astir 30% of Kakao's total.

"We did not hole for a implicit shutdown of an full information centre," Hong said astatine a property briefing, adding that erstwhile exigency drills had mostly progressive contingencies for surges successful traffic.

"We volition summation infrastructure concern truthful we tin beryllium prepared for shutdown of a information centre oregon two."

He noted portion determination was nary nonaccomplishment of information owed to backmost up plans, programmers' tools had not been backed up.

Most of its systems were restored by Wednesday, but miscellaneous functions stay shaky aft disruptions to a wide scope of services from payments to taxis and edifice bookings.

"While Kakao has go a nationalist work that the bulk of the nationalist uses, we've neglected responsibilities accompanying our status," Hong said.

'LIKE WATER OR AIR'

KakaoTalk, launched successful 2010, has much than 47 cardinal progressive accounts successful South Korea, making it 1 of the astir ubiquitous apps successful the state of 51.6 million.

The escaped messenger work took mobile users by tempest soon aft smartphones took disconnected successful precocious 2000s and its aboriginal mover vantage allowed it to outpace competitors, including tech elephantine Naver, to go South Korea's ascendant chat app.

It was aboriginal capable to leverage its ample idiosyncratic basal to grow into games, advertising, intelligence spot and different entertainment, shopping, payments and mobility.

Hong, who is besides starring the company's effect to the outage, said Kakao would look into wherefore work betterment enactment was slow, reappraisal compensation for users and businesses affected by work disruptions and physique its ain information centres.

Namkoong, whose responsibilities included supervision of information centre operations, volition stay successful an advisory relation to guarantee nary repetition of the problem.

"As the CEO successful complaint of the business...all reasoning revolved astir income and operating profit. Rather than staying successful that role, I recognise the gravity of this situation," Namkoong said.

"For a tech company, the strategy is similar h2o oregon air... arsenic (Kakao) has grown rapidly successful caller years, we are reevaluating the request for deeper involvement and concern successful the area."

Kakao is investing 460 cardinal won ($325 million) to physique its ain information centre from adjacent year, and different 1 volition beryllium completed successful the pursuing year, it said.

More than 650 tiny businesses complained astir mislaid income owed to the Kakao outage, lobby radical Korea Federation of Micro Enterprise said.

The ruling party's argumentation main said connected Wednesday lawmakers volition suggest a measure requiring companies similar Kakao to backmost up their systems.

The reshuffle and its biggest ever work disruptions headdress a tumultuous twelvemonth for Kakao.

The group's billionaire laminitis Brian Kim discontinue the committee and Namkoong was tapped for the apical occupation successful March aft controversy involving banal options exercised by immoderate executives astatine its fiscal affiliate soon aft IPO.

Shares successful Kakao roseate arsenic overmuch arsenic 5.7% connected Wednesday. Kakao shares plunged arsenic overmuch arsenic 9.5% connected Monday to their lowest since May 2020, wiping retired 2 trillion won ($1.39 billion) successful marketplace capitalisation astatine 1 point.

($1 = 1,415.6400 won)

Reporting by Joyce Lee; Writing by Miyoung Kim; Editing by Sam Holmes

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