Kakao announces new management structure

Just days before inaugurating 35-year-old Jimmy Rim as the company’s new CEO, Kakao launched a new leadership body consisting of Rim and incumbent executives to share management decisions, the company announced Monday.

Although the company says the move is to make the decision-making process more efficient, industry insiders claim it’s really due to fears about the new CEO’s youth and lack of management experience.

The new six-member body at the operator of Korea’s most popular mobile messenger KakaoTalk will be named CXO, a reference to the way responsibility will be shared among top-ranking executives. The form of corporate structure is unprecedented in Korea.

The six members of the CXO are new CEO Jimmy Rim, also known as Rim Ji-hoon; Choi Sae-hoon, one of two current co-CEOs who will become a chief financial officer; Hong Eun-taek, chief operating officer; Chung Joo-hwan, chief business officer; Park Chang-hee, chief product officer; and Shin Jung-hwan, chief technology officer. Choi is the former CEO of Daum Communications, the country’s second-largest portal site, which merged with Kakao in October of last year.

The other current CEO, Lee Sir-goo, will lead a separate advisory group within Kakao that will comprise of experts from outside the company, but Kakao wouldn’t say whether he would still be an employee.

Such an unprecedented management experiment comes at a critical time for the merged company, which is set to celebrate its first anniversary next month.

Kakao faces the challenge of building a new business model that can capitalize on its enormous number of users - 38 million out of the country’s 50 million population - to rake in revenue and profits. It successfully launched Kakao Taxi, a taxi hailing service app inspired by Uber of the United States, but the service is profitless, given the app currently does not receive commission from neither taxi drivers nor customers.

Kakao is scheduled to hold a shareholders’ meeting Wednesday to confirm Rim, currently the head of investment at K Cube Ventures, as its new CEO.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]