Path planning to sell social network to Korean KakaoTalk

Close-friends social network Path is currently in talks with Daum Kakao - the owner of South Korean messaging service KakaoTalk - to sell Path Classic.

For over five years, Path has been working to make its social network popular, but the only region that has taken a liking to the social network is Indonesia, a market Daum Kakao, LINE and Tencent have been pushing heavily with millions in marketing investment.

Acquiring Path Classic would give Daum Kakao a large opportunity to win over the 30 million active monthly users, most of which are situated in Indonesia.

Path Classic is only part of the organisation and it is expected Path will remain in the US after the acquisition, still holding the ownership of Path Talk, the messaging service and Kong, a selfie GIF application launched in the US this week.

Both companies declined to comment on the acquisition. It is still not known how much Daum Kakao is willing to pay for Path Classic, although Google offered Path $100 million (£66 million) a few months after the original launch.

Kakao might blend Path with its own brand in Indonesia once it gets hold of the service. We do not expect any of the team working at Path in California to move over to South Korea.

It is one of the first times a South Korean organisation has looked to Silicon Valley, but this is an odd situation, where an app built in the US for a Western audience become popular in Indonesia, one of the largest emerging markets in Asia.

Indonesia has the fourth largest population in the world, making it a prime target for messaging and social applications like LINE and KakaoTalk. The issue has been getting Indonesians to join these platforms, often times promotional offers and other incentives are tacked on to get customers to join.

Even though the average income in Indonesia is lower than in China and India, there is a lot of potential for Internet services in the region, if they can get in before mobile users become tied to one social network or messaging application.