Kakao launches AI app Kanana, but road ahead may be rocky

Kakao launched its new conversational AI app, Kanana, on Thursday, but quirks and constraints have industry obervers skeptical of its ability to turn things around for the company.

Kakao CEO Chung Shin-a speaks at a press briefing held at The Plaza Seoul in Jung District, central Seoul, in Feb. 4. [YONHAP]

Kakao launched its new conversational AI app, Kanana, on the Google Play Store and Apple’s App Store on Thursday, positioning it as its next key growth driver. The service features the AI companions “Kana” and “Nana,” who join both one-on-one and group chat rooms, grasp the context of conversations and help manage schedules and other tasks.

However, the service has been criticized as underwhelming even for a trial release, and concerns over sustained growth have intensified following poor first quarter earnings.

While existing AI services typically take the form of chatbots that interact with users in one-on-one conversations, Kanana supports everyday group communication.

The personalities of the companions can be customized to resemble a “friendly,” “expert-like,” or “mood-maker” persona, and users can even define their preferred conversation style by inputting settings such as “speak less, be concise.” Kana assists with organizing conversations in group chats, while Nana supports users in one-on-one chats. Hands-on experience

After downloading the beta version of Kanana and inviting an acquaintance, I began a one-on-one conversation. We made plans for Saturday afternoon, noted the rainy forecast and changed the meeting location to an indoor shopping mall. Later, when I asked Nana, “What was the plan with this person for Saturday?”, it summarized our conversation and relayed the final details.

The advantage is that you can recall how a plan was made without rereading every message. While the calendar integration feature is not yet available, Kakao said it “plans to enhance features like calendar syncing with updates every three weeks.”

However, this feature is only available within the separate Kanana app, not in KakaoTalk. This means both the user and their acquaintances must download the Kanana app. Given the current ubiquity of AI chatbot services, some question whether users will go out of their way to use Kanana.

The AI companion “Nana” summarizes the conversation in the Kanana app. However, it makes errors, such as referring to Sunday as Saturday. [SCREEN CAPTURE]

“Kakao has had internal developers using chatbots in conversation rooms since 2016,” said a spokesperson from a domestic IT company. “If privacy is a concern, user consent should suffice.”

“Rather than securing tens of millions of monthly active users like KakaoTalk, the Kanana app aims to expand the user experience with AI companions,” said a Kakao spokesperson.

There were also errors, such as providing outdated information. When asked, “Who is the Democratic Party’s presidential candidate?” Nana responded that the next presidential election is in 2027. In another instance, when asked for Kakao’s first quarter results, it returned data for the first quarter of 2024.

A conversation in which the user asked Kanana about the Democratic Party’s presidential candidate [SCREEN CAPTURE]

Kakao’s earnings decline

On the same day, Kakao announced its earnings for the first quarter of 2025. On a consolidated basis, Kakao posted revenue of 1.86 trillion won ($1.33 billion), a 6 percent drop from the same period last year. Operating profit fell 12 percent on year to 105.4 billion won.

The decline was driven by underperformance in the content division. Content revenue totaled 870.7 billion won, down 16 percent from the same period last year and 4 percent from the fourth quarter of 2024.

Specifically, the story business, including Piccoma, and the music business, including SM Entertainment, came in at 212.6 billion won and 473.9 billion won, respectively, both down 6 percent on year. Media business revenue dropped 21 percent to 75.1 billion won.

Meanwhile, platform business revenue — including KakaoTalk, Mobility and Pay — increased 4 percent to 993 billion won during the same period.

“It’s still hard to find a compelling reason for users to adopt the Kanana app, so generating profit or growth from AI apps in the next few years seems unlikely,” said Oh Dong-hwan, an analyst at Samsung Securities. “If Kakao can increase traffic and advertising through updates to the discovery section of KakaoTalk in the second half of the year, there may be a chance for a rebound.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY KIM MIN-JEONG [kim.minyoung5@joongang.co.kr]