Daum Kakao buys Path assets for Indonesia growth, stock soars

Social networking services need to reach a critical mass of users to survive in a community.

Along our journey we have celebrated some wonderful successes and learned valuable lessons.

By 2013, amid design and feature changes, it caught the attention of users in Latin America and later in Southeast Asia where most of its users are today.

Path tried refocusing its efforts by launching the standalone messaging app Path Talk last summer, followed by Kong in April.

Daum Kakao announced on May 29 that it acquires a major SNS Path and Path Talk. Currently, Path has only ten million active users, as compared to Kakao Talk’s 48 million count. The company plans to expand and said it will explore investment and partnership opportunities around the world, along with more acquisitions.

“Daum Kakao will assess the state of the local Indonesian Path team and nothing has been determined at this time”, said the spokesperson.

Daum Kakao's thirst for expansion comes as the company has struggled to find new profit drivers.

The company’s Kakao Talk app is perhaps the best example of how a messaging app has impacted media and internet distribution – which is where the trend is moving in the U.S. and other countries.

It’s not clear whether funds from the sale will be reinvested in Path (the company) or investors may see money returned. This team will work with Daum Kakao over the next few months to ensure a smooth transition.

Daum Kakao’s shares were trading at 117,700 won in afternoon trade.

It is unclear whether Path's new services will be able to revive Daum Kakao's ambitions in Southeast Asia. The South Korean company confirmed the deal in an e-mailed statement.

Daum Kakao rose 11 percent to 118,400 won as of 12:24 p.m.in Seoul. However, the stock remains in negative territory for the year.

The startup prided itself on being a private place for people to connect with close friends – no more than 150.

Post Comment