Kakao is set to complete the spin-off of Daum, its in-house operator of the country’s second-largest portal site, as early as June, signaling the end of an 11-year union since the two firms merged in 2014.
According to industry sources on Monday, Kakao has entered the final stages of turning Daum into a fully independent entity. As part of the transition, the IT giant has begun gathering consent from employees to either transfer to the new Daum entity or remain with Kakao headquarters.
The board of directors is expected to convene within the first half of the year to formally approve the spin-off once internal preparations, including employee transfers and organizational restructuring, are completed.
After acquiring Daum Communications in 2014, Kakao has operated the portal service under its corporate umbrella. In May 2023, Daum was reorganized as an independent in-house company, and in March, Kakao officially announced plans to establish Daum as a standalone subsidiary.
The move comes amid Daum's prolonged underperformance and declining market competitiveness. Once a dominant force alongside Naver — the market leader in Korea’s portal ecosystem — Daum has seen a steep user decline in recent years.
According to Internet Trend, a local web analytics platform, Daum held a 3.1 percent share of the domestic search engine market as of Friday. In stark contrast, Naver led with 60.3 percent, followed by Google at 31.7 percent and Bing at 3.5 percent, placing Daum a distant fourth.
Industry watchers view the spin-off as a strategic effort by Kakao to rejuvenate the ailing portal’s performance through operational independence. However, speculation has also emerged that Kakao may be laying the groundwork for an eventual sale of Daum.
Kakao CEO Chung Shin-a dismissed such speculation at the company’s annual shareholders’ meeting in March, stating, “Our current focus is on building a strong company. We are not considering the sale of Daum at this time.”
Kakao has been accelerating Daum’s restructuring since the beginning of this year. In January, it carried out a full-scale overhaul of the mobile app—the first in nine years—which included a logo redesign. This was followed by a second round of updates on April 30, which enhanced short-form content features and introduced a curation chatbot to deliver news content more effectively.
yeeun@heraldcorp.com
