Korea’s Kakao Talk is paying an unexpected price for becoming the nation’s most popular mobile messenger. To the dismay of Kakao, the company that manages the service, its messages are being used as police evidence

2013-03-08

Kakao Talk pays price of popularity

Chat king suffers increased workload

By Cho Mu-hyun

Kakao Talk is paying an unexpected price for becoming the nation’s most popular mobile messenger. To the dismay of Kakao, the company that manages the service, its messages are being used as police evidence.

As mobile Internet services are increasingly being used for social communication, authorities are starting to look into servers for evidence in cases, rather than calling for witnesses, investigating hearsay or examining hard copies of documents.
Much like Twitter tweets and Facebook posts that have sparked media controversy overseas, Kakao’s two services—KakaoTalk, and the affiliated social network service KakaoStory—are becoming linked to high-profile controversies as both instigators and unwilling participants.

Last month, police investigating the alleged rape case against movie star Park Si-hoo raided Kakao’s headquarters in Pangyo Techno Valley in Bundang, as the alleged victim’s chats were being named in court as evidence.

A month earlier, Kakao had been searched by another set of investigators looking into a sexual assault case against singer Ko Young-wook. The chat logs between him and the victim were being scrutinized for the case.

These incidents caused outrage among consumers, who were mostly unaware that their messages were being stored and saved by Kakao’s servers, raising the issue of whether the company had violated consumer privacy. However, awareness that chat logs were stored also brought in demands from unscrupulous subscribers to see messages sent by their wives and girlfriends.

Last year, the firm saved individual messages for up to 10 days on its servers. Currently, it retains them for 5 to 7 days.

Kakao asserts that saving messages was aimed at the convenience of users, in case of a network or handset problem that prevented a message from being properly sent.

“Following the rising demand from subscribers for privacy, some unwanted scrutiny of our servers and, most important, our need to streamline our business, we are planning to decrease the time we save messages on our servers,” said Kakao spokeswoman Elin Lee.

The firm’s own servers are seeing heavy use following substantially increased traffic from KakaoStory and its game platform, among other services. It recently expanded its servers to LG CNS’s data center in Busan to alleviate the burden on the servers in Seoul.

In March of last year, Kakao saw 2.6 billion text messages sent per day via its messenger. It now averages around 4 billion per day. The all-time high was this year’s New Year’s Day, when 4.8 billion messages were sent.

According to Kakao, there will no longer be unexpected raids on its office. This is due to the reduced message storage time: messages will now be as stored for as little as a day.

“At the request of the court and police, we’ve sent files of the chat data without having to hand over our whole servers,” said Lee. “We want it to be known that these are only case-by-case incidents, and we will continue to conduct business in a way that puts user convenience and information safety above all other considerations.”

The current law doesn’t require service providers for text messages or similar services to save messages in complete form. They only need to keep the login entry for three months.

Kakao plans to delete messages from the server immediately following a “send and receive,” with only those that failed to reach their destination being temporarily saved.

According to Kakao, the new structure should get rid of the privacy violation issue completely, and will also decrease the workload on its servers. The transition will be completed by the first half of the year. “We are expecting to reach 100 million subscribers very soon, and are preparing for that,” said the spokeswoman.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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