On Thursday, Kakao, a major internet company in Korea announced that it had separated Daum, the country’s second-biggest internet portal into its own company. This move is aimed at helping Daum become more competitive, as it has been losing market share.
In a recent board meeting, Kakao agreed to turn the Daum team into a separate company.
This new company will still be fully owned by Kakao, even though it will now operate on its own.
The new company will run Daum’s main services, like its email and search tools, along with its online community, shopping, and news websites.
Kakao said creating a separate company is to manage things more efficiently and make Daum more competitive. It also clarified that it has no 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.
Daum and Naver used to be among the top internet companies in South Korea. But in recent years, it has lost popularity, and its market share has dropped to about 3%.
Kakao’s CEO, Chung Sin-a, said they are not planning to sell Daum. He explained that the spinoff is part of a bigger plan to reorganize and simplify the company’s operations.
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