Kakao founder Kim Beom-su, 59, is stepping down from frontline management due to health concerns that require dedicated medical treatment. While Kakao CEO Chung Shin-a, 50, will assume his responsibilities, disruptions to the corporate restructuring efforts Kim has been spearheading appear inevitable.
On Mar. 13, Kakao announced that Kim would step down as co-chair of the Corporate Alignment (CA) Council, an internal body overseeing the company’s operations. Chung will take over as sole chair of the council. A Kakao representative confirmed that Kim was recently diagnosed with early-stage bladder cancer and will focus on his treatment.
Since launching its messaging app in 2010, Kakao has aggressively expanded its business, drawing criticism for its diversification strategy. In response, Kim took charge of management reform efforts in 2023, leading a corporate restructuring initiative. That same year, he was indicted for allegedly directing and colluding in stock manipulation during Kakao’s acquisition of SM Entertainment and is currently on trial.
An industry insider noted that with Kim required to attend court proceedings regularly and now facing health challenges, remaining actively involved in management has become untenable. “The pace of Kakao’s restructuring is bound to slow down,” the source said. On the same day, Kakao also announced plans to spin off Daum, its search platform currently operating as an in-house independent company (CIC).
Kim founded Kakao in 2006 and stepped down as board chairman in Mar. 2022, citing plans to focus on global expansion. However, following a series of controversies—including allegations of stock manipulation tied to the SM Entertainment acquisition, a fire at Kakao’s data center in Pangyo, and disputes between Kakao Mobility and taxi associations—he returned to management in Nov. 2023, establishing the Management Reform Committee as its chairman. At the time, he pledged to overhaul the company, stating, “I am even prepared to change the company’s name.”
As part of the restructuring, Kim established the Compliance and Trust Committee and reshuffled key leadership, appointing Chung, formerly head of Kakao Ventures, as CEO. He also sought to streamline the company’s corporate structure, reducing the number of affiliates from nearly 150 to around 116.
However, Kim was arrested last year on charges of directing and colluding in stock manipulation related to Kakao’s acquisition of SM Entertainment. He was later released on bail but remains entangled in legal proceedings, attending court hearings almost weekly. A Kakao representative confirmed that with Kim stepping down, the Management Reform Committee will be dissolved. Moving forward, corporate governance will be overseen by the Strategic Committee, Responsible Management Committee, and ESG Committee, composed of key executives from major Kakao subsidiaries.
Chung will take over Kim’s role in leading the group’s restructuring efforts. During an internal town hall meeting, Kakao announced plans to spin off Daum as a standalone entity. The move comes 11 years after Kakao’s merger with Daum Communications and two years after Daum was restructured as a CIC.
Daum’s domestic web search market share has declined to around 2%, raising concerns that it is weighing down Kakao’s overall performance. The decision to spin off Daum is seen as an effort to enhance its competitiveness before missing a critical turnaround opportunity. “Daum has yet to establish a reliable revenue model,” a Kakao representative said. “Through this spinoff, it will seek a path to independent survival.” Employees will be given the option to remain with Kakao following the separation. The spinoff is expected to be finalized later this year, pending board approval and other required procedures.
