Shares of Korean internet giant Kakao slide after fire disrupts service • TechCrunch

The stock cost of South Korea’s online large Kakao tumbled on Monday just after a fireplace at a data heart that slice off electricity on Saturday, triggering many service malfunctions.

The blaze at the SK C&C data center, which houses the servers of Korea’s two most significant world wide web companies — Kakao and Naver — disrupted Kakao’s messaging, ride-hailing, payment and activity applications, and Naver’s world wide web search and information companies, in excess of the weekend.

Some disruption is ongoing — predominantly impacting Kakao’s services.

On Monday morning, Kakao’s share rate dropped additional than 9%. Its peer Naver also slid 2% at the opening of investing right before recovering.

At the time of composing, Kakao stated it had restored KakaoTalk, the country’s dominant messaging app — with additional than 46 million every month energetic consumers in South Korea as of September 2022 and 53 million globally. On Monday afternoon it also stated it had completed recovering its financial companies. But some other solutions are continue to down.

In the meantime, Naver, which confronted partial disruptions as a final result of the fire on Saturday, speedily restored most of its operations on Sunday.

In accordance to a report by Bernstein, Kakao’s slow restoration approach was induced by the company’s absence of owned server infrastructure and “high dependence” on the SK C&C data centre. It also highlights Kakao’s lack of a effectively dispersed backup technique. The report pointed out that Naver was capable to resume its primary solutions promptly because it has owned server infrastructure and a very well-developed backup system.

KakaoTalk stays the dominant messaging company in South Korea and the Bernstein report predicts it will preserve its placement even with the outage, presented how far behind its rivals are in marketshare phrases. Furthermore, it factors out that Kakao’s messaging application is linked to other solutions these types of as Kakao bank, payment and ride-hailing expert services, so customers are unlikely to exchange the application with much less completely featured solutions like WhatsApp or Telegram, for every the report.

The next premier messaging application just after Kakao in South Korea is Fb Messenger but it has only 3.9 million MAU as of September 2022. Even though Naver’s messenger app, Line, has about 1.6 million regular monthly energetic buyers.

In its statement on Saturday evening, Kakao reported the fireplace broke out at all over 3:30 PM (neighborhood time). It extra that it is investigating the make any difference.

A statement by Naver on Saturday afternoon reported it is mindful of challenges impacting its services as a consequence of the hearth.

South Korean President Yoon Suk-yeol also built public reviews on Monday subsequent the incident — remarking that a non-public business operates KakaoTalk but describing it as basically a nationwide communications infrastructure. Yoon named on the authorities to examine the specific leads to of the fireplace. “I regard corporate autonomy and creative imagination, but that is based mostly on the premise that the market place moderately allocates methods and income in a program of fair levels of competition,” Yoon claimed. “If a monopoly predicament triggers current market manipulation, the federal government ought to just take systemic action.”