[Edaily Reporter Lee So-Hyun ] Kakao(035720)is making a full-scale entry into the search advertising market using artificial intelligence (AI). The strategy is to expand its business structure—which has traditionally focused on display advertising—to secure growth momentum for the medium to long term.

Jeong Shin-ah, CEO of Kakao, stated during the Q2 2026 earnings conference call on the 6th, “In the medium to long term, we view it as a key priority to develop new advertising revenue models based on AI services and expand our business scope to include the search advertising market.”

Kakao anticipates that as the number of users of AI services within KakaoTalk increases in the second half of this year, it will be able to more precisely identify users’ interests and purchase intentions revealed during the AI exploration process. Based on this, the company plans to provide a new AI-based advertising experience that goes beyond existing keyword-centric search ads.

CEO Jeong explained, “If AI services within KakaoTalk expand to a significant user base in the second half of the year, we will be able to understand users’ interests and purchase intentions more accurately through the AI exploration experience.”

While the domestic digital advertising market is dominated by display and search advertising, Kakao has so far focused its business on display advertising, such as KakaoTalk BizBoard and feed-based ads. Going forward, the company plans to expand its business scope to include search advertising through AI services, thereby diversifying its advertising revenue structure.

Its existing advertising business is also continuing to grow. In the second quarter of this year, display ad revenue (excluding BizBoard) tripled year-over-year, and its share of total display ad revenue expanded to 45%. Kakao plans to sustain the growth of feed-based ads by enhancing its news service and expanding the short-form content ecosystem.

Kakao forecasts that, driven by the growth of feed-based ads, business messages, and commerce ads, TalkBiz ad revenue will maintain double-digit growth in the second half of the year. With the addition of AI-based search ads, the scope of its advertising business—which has traditionally centered on BizBoard—is expected to expand significantly.

CEO Jeong stated, “Going forward, we will expand our business scope by entering the search advertising market—an area we have not previously penetrated—and thereby secure growth momentum for the medium to long term.”

Meanwhile, Kakao reported consolidated revenue of 2.0985 trillion won and operating profit of 277 billion won for the second quarter of 2026. These figures represent year-over-year increases of 9% and 36%, respectively, marking record highs for both revenue and operating profit on a quarterly basis. The operating profit margin also improved to the 13% range, up approximately 3 percentage points from the same period last year.