Korean Internet Giant Kakao’s Co-CEO Resigns Amid Heat From Data Center Fire - Forbes

Korean net elephantine Kakao’s co-CEO Whon Nam-koong resigned Wednesday morning, pursuing nationalist outrage and regulatory scrutiny implicit a work outage that upended the company’s astir fashionable services.

Founded by Korean billionaire Kim Beom-su, who topped this year’s database of Korea’s 50 Richest with a nett worthy of $9.6 billion, Kakao covers messaging, payments, banking, gaming and ride-hailing. Its messaging app, KakaoTalk, has implicit 47.5 cardinal users successful Korea – much than 90% of the country’s population, according to Kakao.

Kakao’s services went offline connected Saturday for astir 11 hours, arsenic 32,000 Kakao servers were affected by a occurrence astatine the SK C&C information halfway located successful Pangyo, a metropolis southbound of Seoul, Korea’s capital. Operated by the SK conglomerate, the information halfway besides houses servers for Korean billionaire Lee Hae-jin’s Naver, the country’s largest net institution by marketplace capitalization.

“As a CEO of Kakao, I consciousness miserable and powerfully liable for the incident. So I americium stepping down from the post,” Whon said during a press conference held successful Pangyo, reported by section media. He apologized to Kakao’s users and pledged “Kakao volition bash its champion to reconstruct nationalist confidence.”

The erstwhile CEO of Kakao’s video games subsidiary, Whon became co-CEO of Kakao this January alongside Hong Eun-taek. Hong volition enactment connected arsenic the sole CEO, starring exigency efforts successful recovering from the work outage. Kakao plans to put 460 cardinal won ($325 million) to physique its ain information halfway from adjacent year, with an further information halfway slated for the pursuing year.

The outage had an contiguous effect connected Korea, wherever Kakao’s services are profoundly integrated into mundane life. While millions of users could not interaction 1 different implicit KakaoTalk, shopowners reliant connected KakaoBank oregon KakaoPay were besides incapable to behaviour business. Over 650 tiny businesses complained astir mislaid income owed to the Kakao outage, lobby radical Korea Federation of Micro Enterprises said.

In effect to the fire, Korea’s President Yoon Suk-yeol announced Sunday that a Fair Trade Commission probe into Kakao was underway, accompanied by the instauration of a cybersecurity task unit to reappraisal the incidental and its imaginable ramifications for nationalist security.

“Although Kakao is simply a web operated by a backstage company, it is virtually nary antithetic from a nationalist connection web from the position of the people,” Yoon said successful a property league reported by local media. The person of Korea’s ruling enactment besides announced it would hole “legislative measures” to code the disruption of Kakao’s services.

Shares of Kakao are down 70% since their highest successful July past year. The terms dipped by 9.5% connected Monday pursuing the fire, the lowest level since May 2020, but roseate by astir 6% connected Wednesday. As of writing, Kim’s nett worthy stands astatine $4 billion, little than fractional of his nett worthy successful April.

More broadly, Kakao has travel nether occurrence implicit the past twelvemonth arsenic regulators person investigated Kakao for monopolistic activity. In September, the country’s antitrust regulator launched a probe into Kim and his holding institution K Cube implicit imaginable just commercialized violations. In turn, Kakao postponed listing fintech portion Kakao Pay until past November, erstwhile it raised $1.3 billion, and indefinitely pushed backmost the IPO of taxi-hailing app Kakao Mobility.