Kakao announced Thursday it has spun off Daum, the country’s second-largest internet portal. (Image courtesy of Creative Commons)
SEOUL, May 22 (Korea Bizwire) — South Korea’s internet giant Kakao Corp. said Thursday it has spun off Daum, the country’s second-largest internet portal, in a bid to revive the platform’s competitiveness amid a declining market share.
During a board of directors meeting, Kakao approved the plan to spin off the in-house team managing Daum and set it up as a new, wholly owned subsidiary, according to the company.
The new entity will take over Daum’s core services, including its flagship email and search offerings, as well as its online community, shopping and news platforms.
Kakao emphasized that the move is intended to enhance management efficiency and boost competitiveness, rejecting speculation that it plans to sell the portal business.
“We have taken the first step to build an environment that can swiftly respond to intensifying market competition,” said Yang Joo-il, who has been named the head of the new entity.
“We will focus on new experiments and challenges to create opportunities for a second chance for the portal, supported by a faster and more flexible decision-making structure.”
The spinoff comes 11 years after Daum merged with Kakao in 2014.
Once a dominant player in South Korea’s internet landscape, along with Naver Corp., Daum has seen its presence decline in recent years, with its market share falling to around 3 percent.
Earlier, Kakao CEO Chung Sin-a said there were no plans to sell Daum, reiterating that the spinoff is part of broader restructuring and streamlining efforts across the company.
Shares of Kakao dropped 0.53 percent to close at 37,250 won (US$27) on the Seoul bourse, outperforming the broader KOSPI’s 1.22 percent drop.
(Yonhap)
