Co-CEO of Kakao resigns after massive service outage

Co-CEO of Kakao Corp. Namkoong Whon has stepped down after a data center fire and mass outage that shut down South Korea’s largest mobile chat app and other services, while vowing for timely damage compensation and measures to prevent recurrence.

“I feel the heavy burden of responsibility over the latest incident and will step down from my position as CEO and lead the emergency disaster task force overseeing the aftermath of the incident," Namkoong said during a press conference held on Wednesday. Kakao will take the service failure as an opportunity to inspect and revamp the entire Kakao system and will actively cooperate with authorities in investigations over the mass outage.

Namkoong’s resignation was effective as of Wednesday, leaving Hong as sole CEO of Kakao.

His resignation comes after the fire at a data center shut down Korea’s dominant messenger app KakaoTalk used by 53 million users worldwide and disrupted other related services for a few days since the weekend.

“We promise to thoroughly investigate the cause of this matter as soon as all services are restored to normal and take maximum measures to prevent this from happening again,” Namkoong told reporters.

Kakao’s major services are expected to be fully normalized today as power supply recovery is completed at its data center in Pangyo on Wednesday. Most of the Kakao services, including KakaoTalk, have already been restored. The email service from its portal site Daum also returned to normal in key functions from 6 a.m. on the same day.

There was no data loss and users will be able to check all emails normally once the stabilization work is completed soon, the company explained.

Kakao also discussed plans to improve system management in addition to an apology for its service failure.

Now sole CEO Hong Euntaek who is in charge of the company’s emergency committee said the company will establish a compensation plan for all stakeholders, including users and partners, who have been affected by the outage, and implement it as soon as possible. The subject and scope of compensation will be discussed based on reports from those affected, he added.

“We will review compensation not only for paid service users, but also for all users, partners, and various stakeholders who have been affected, while building additional data centers for data backup” Hong said, emphasizing the company will first address the issue of compensation before determining who is more responsible for the incident with SK, the data center operator.

Shares of Kakao, Kakao Bank, Kakao Pay and Kakao Games were uplifted by 2 to 5 percent right after the CEO resignation was announced in the morning.

Kakao shares ended up 0.81 percent at 49,800 won ($34.92) on Wednesday, while its payment affiliates KakaoBank and Kakao Pay added 1.16 percent and 0.54 percent to end at 17,400 won and 36,950 won, respectively. Kakao Games shares fell 2.55 percent to close at 38,200 won.

[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]