Kakao co-CEO resigns, company to invest over $300M to build data center after mass outage

Whon Namkoong, the co-chief executive of Kakao, has resigned in a remarkable demonstration of corporate accountability after a fire incident at an SK C&C data center in the south of Seoul caused a mass outage over the weekend and disrupted Kakao’s several services, including messenger, ride-hailing, payment, banking and gaming.

Namkoong, who joined Kakao in 2015, was elevated to the co-CEO role this March. At a press conference on Wednesday, Namkoong apologized for the mass outage “for such an extended period” and said that he feels “the heavy burden of responsibility” over the incident, adding that the company will do its best to restore the faith of users.

Euntaek Hong, Head of ESG at Kakao, who led the firm alongside Namkoong and is currently leading Kakao’s emergency task force team, will remain the firm as the sole head of Kakao, per a company filing.

Kakao said today morning it had restored additional services like Kakaomail and TalkChannel. Most of its services are in almost full operation, with some remaining partially down.

KakaoTalk is the most popular messaging app in South Korea, reaching over 47 million of the nation’s 51.7 million population each month. The app is also used by government officials and businesses, including banks, ride-hailing services, and payment players.

Kakao’s slow recovery process was caused by the company’s lack of owned server infrastructure and “high dependence” on the SK C&C data center, which caught fire, analysts at Bernstein said in a report this week. Kakao also didn’t have a well-distributed backup system, they added.

Hong said at a press conference today that the company plans to invest 460 billion KRW (~$325 million) to build its own data center from next year, aiming to complete it in the following year.

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

Shares of Kakao tumbled on Monday but recovered slightly on Namkoong’s departure announcement.