Sputh Korea’s Kakao Corp has spun off Daum, South Korea’s second-largest internet portal, to strengthen its market position amid falling user engagement.

Daum is now a wholly owned subsidiary of Kakao, overseeing services like email, search, communities, shopping, and news.

Kakao said the move will improve efficiency and competitiveness, with Yang Joo-il leading the new unit for faster decision-making.

The decision comes 11 years after Daum merged with Kakao, as its market share has dropped to about 3%.

CEO Chung Sin-a emphasized that Daum will not be sold, calling the move part of Kakao’s larger restructuring strategy.

🔗 Source: Yonhap

🧠 Food for thought

1️⃣ Portal business decline reflects shifting digital landscape in South Korea

Daum’s fall from being a co-dominant player alongside Naver to holding just 3% market share highlights the dramatic transformation of South Korea’s internet ecosystem.

The portal has experienced a steady decline over years, dropping below not just Naver (56.97%) and Google (35%), but even Microsoft’s Bing, which recently overtook Daum with a 3.35% share compared to Daum’s 3.29% 1.

This shift reflects broader changes in how users access information, with Daum’s contribution to Kakao’s revenue shrinking to just 9% of the group’s total 1.

Kakao’s decision mirrors industry patterns where companies isolate underperforming legacy businesses to allow more agile decision-making. The spinoff represents a strategic pivot as portal services become less central to digital ecosystems, with Kakao now primarily focusing on its diverse services spanning messaging, fintech, and content platforms.

2️⃣ South Korea’s tech landscape evolves from portals to super apps

Kakao’s restructuring of Daum illustrates the shift from portal-centric internet businesses to integrated super app ecosystems that dominate the Korean digital economy.

When Daum merged with Kakao in 2014, messaging apps were beginning to transform into multi-service platforms, with KakaoTalk now serving as the foundation for various services from payments to transportation 2.

The company has built a comprehensive ecosystem with over 220 million users across multiple platforms, generating revenue through digital advertising, gaming, and mobile payments 3.

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