KakaoTalk's 15-year overhaul lasted five days — and cost Kakao ₩1.64 trillion

Kakao announced on September 23, 2025 that it would turn KakaoTalk's Friends tab — the app's main page — into a random, Instagram-style feed of friends' profile photos and ads, aiming to keep users in-app longer and expand ad inventory. Backlash was immediate: because KakaoTalk auto-adds phone contacts, users said they had been given 'a social media account that follows hundreds or even thousands of unintended contacts — all without their consent'. Users hunted for rollbacks and rival apps, and the stock fell 4.67 per cent on announcement day and another 6.17 per cent that Friday.

Five days in, Kakao reversed: the list-style Friends tab returned and the feed became a separate tab — too late for the market cap, which shed ₩1.64 trillion ($1.16 billion), over three times Kakao's 2024 operating profit of ₩491.5 billion. The update was the 'Big Bang Project', led by chief product officer Hong Min-taek, a former Toss Bank CEO hired that February, and it skipped KakaoTalk Lab, the opt-in testing channel built for a national-infrastructure app. Employees writing anonymously on Blind said developers' opposition was brushed aside, with resisters labelled 'public servants'.

The commercial logic was real — KakaoTalk revenue had slid from a ₩537.6 billion peak in late 2024 to ₩513.9 billion in Q2 2025, with ads at 60 per cent of sales — but analyst Jung Ho-yoon noted KakaoTalk friends are connections of necessity, not interest, so feed engagement was never guaranteed. Industry officials read the episode as a deeper failure: a company that once pioneered carefully tested features pushing through, unasked, services users already had elsewhere.

Kakao's market cap shed ₩1.64 trillion (US$1.16 billion) in days — more than three times its 2024 operating profit of ₩491.5 billion.

The update monetised a permission users never gave: phone-number contacts became a feed audience by default.

It bypassed KakaoTalk Lab, the company's own testing mechanism, and was driven by an executive months into the job over internal opposition.

The ad-revenue motive was visible enough that the rollback read as retreat rather than iteration, compounding the credibility hit.

A platform that is infrastructure for a whole country has to test like one: skipping your own feedback channel converts a UI change into a trust event.

Kakao restored the list-style Friends tab, moved the feed to a separate tab, and said the reversal addressed the complaints; the stock bounced 1.69 per cent on the announcement before slipping again. Hong Min-taek wrote internally that the update was meant to expand social features, not shrink the messenger, pointing to steady download and traffic figures — an argument that did little to calm the criticism that Kakao had lost its user-first habits.