KakaoTalk CEO resigns amid scandal

Kakao’s co-CEO steps down after widespread outage at South Korea’s top chat app

KakaoTalk has a history of spectacular flops. It launched in 2004 in South Korea’s third most populous city to a huge fanfare and made a splash, only to go bankrupt a year later, just as Facebook was taking off in the U.S.

Today, it is one of South Korea’s most-used apps, used by almost 200 million people in the country.

Kakao announced on Thursday that chief executive Bang Chan-ki had stepped down amid the crisis, becoming the latest executive to resign from a prominent South Korean tech firm over a tech scandal.

The mobile-messaging app said it would cooperate with the authorities, saying “there is nothing to be investigated or punished, since no charges have been filed.”

An earlier report said Chang had resigned in June.

“We did our utmost best to make the company successful, and I regret that I am the only one who cannot continue with the responsibility of this company,” Chang wrote in his letter.

Kakao users expressed disappointment in the sudden resignation, which followed a week of problems that had shut down parts of the site, including its messaging service and some of its most popular features, such as video conferencing and gaming.

The app, which offers free services such as messaging, video calling, photo sharing, games and music streaming, was once the most popular in the country and the only one that was not owned by Samsung, its biggest rival.

The latest debacle comes just months after South Korea’s top tech titan, Samsung, saw its share price plunge after it agreed to pay $1.9 billion for a majority stake in the mobile-messaging app.

An Apple-Samsung alliance would have given the company a bigger share of the lucrative mobile messaging market there, which is expected to grow to US$80 billion by 2020, compared with Samsung and its homegrown rival, KakaoTalk, which now only counts about 50 million users globally.

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