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6 Below is a part of a news article on the major crash of the KakaoTalk service in Korea a year ago ( FYl: KakoTalk
Below is a part of a news article on the major crash of the KakaoTalk service in Korea a year ago FYl: KakoTalk is the dominant mobile messenger app in Korea. Naver Line is a competitor of KakaoTalk Read the article carefully and answer the following questions. pt
After Kakao's services crashed over the weekend, its messenger users are broadening their horizons and completely switching to or signing up for additional message services in a move that could create a crack in KakaoTalk's dominance over the Korean messenger market. The number of users for other messenger apps such as Line and Telegram has increased sharply following the disruption of KakaoTalk's services due to the fire at its data center on Saturday The number of daily KakaoTalk users decreased by million from Friday to million on Sunday after the service failure. On the other hand, the number of Line users soared from to million and from million to million for Telegram from Friday to Sunday. In particular, for Line, the number of users who installed the app on their mobile phones increased by in just two days.
The people were beginning the Kakao exodus, branching out into other corners of the messenger market, which had been dominated by KakaoTalk. KakaoTalk has unmistakably dominated the domestic messenger market IT companies pull out all the stops to prevent their users from branching out to other messaging apps, because securing a market dominance is key to growing their internet business. KakaoTalk was the poster child of an IT platform in Korea that successfully achieved that dominance.
In fact, using multiple apps for the same main purpose requires more effort and costs on the part of the user. KakaoTalk, commonly considered Korea's national messenger, was able to achieve its dominance due to the network effect that made it inconvenient for people not using KakaoTalk because everyone else was using it Other Kakao services, such as the Kakao T app, which dominates more than percent of the taxi hailing app market, managed to do so by actively making use of Kakao IDs, which many people already had
Kakao's crash over the weekend, however, put a damper on Kakao's image and led many of the million KakaoTalk users to realize it may be in their best interest to branch out. As not only individuals but also public institutions and companies experienced various service failures linked to Kakao ID some are opting to distribute their risk by using multiple apps.
If exclusive KakaoTalk users start adopting other messaging apps, it could affect the overall corporate value and competitiveness of Kakao. On Monday, stocks of Kakao subsidiaries fell one after another, and Kakao, KakaoBank and Kakao Pay all recorded week lows. Taking advantage of this, Naver promoted the messenger app Line, which it jointly owns with SoftBank through a venture called A Holdings, on the first screen of its Naver mobile app while KakaoTalk services were down. This is believed to have contributed directly to the increase in the number of downloads and users for Line. UT a navigation app owned percent by Uber and percent by TMAP Mobility, a spinoff of SK Telecom, seized the opportunity to catch up by announcing promotional benefits to drivers using the app.
a The news article mentioned several reasons behind Kakao Talk's dominance in the messenger app market in Korea. Rephrase the reasons by using the concept of switching costinstalled base and complementary goods Remember that you must explain the definition of each term first before using the term pt
b When KakaoTalk was launched in the CEO of this company declared that they would provide the service for free. Why do you think KakaoTalk started its business without requiring users to pay? Answer by incorporating the concepts of the firstmover advantageinnovation adoption and increasing return to adoptionpt
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