Portal "Daum," whose market share once topped 40% but has plunged below 3%, is making a fresh start. Daum will become independent on the 1st of next month, 11 years after merging with Kakao in 2014. Daum will operate under a new company called "AXZ."
Kakao will complete the transfer of operations for institutional sectors such as Daum News, Daum Shopping, Daum Search, Daum Mail, and Daum Cafe to AXZ. A Daum official said the company aims "to be reborn as a comprehensive content platform that spans not only existing search and news but also artificial intelligence (AI), short-form, channels, and cafes." Attention is on whether Daum can pull off a comeback.
The head of AXZ will be Yang Joo-il, former head of the Content CIC (company-in-company). Yang worked at Hangame and Naver and served as CEO of NHN Ticketlink, NHN Bugs, and NHN Travel Doctor.
Ahead of its fresh start, AXZ is conducting aggressive hiring. It is currently recruiting for media service planning, portal video service planning, general affairs, infrastructure DevOps, search server developers, portal service planning, mail service developers, and portal ad sales. The company says it needs many people as it builds separate infrastructure from what Kakao used. As recently as on July, an internal briefing session was held for staff in "Search CIC (in-house company)" within Kakao Enterprise to ask about moving to AXZ, and there was some friction, but Kakao CEO Chung Shin-a said, "After the spinoff, we will reflect employees' preferences as much as possible in personnel placements," and things quieted down.
But for now, concerns are louder. From the start of the year through on the 24th, Daum's market share was 2.93%. It fell behind Naver (62.79%) and Google (29.75%), and was even overtaken by Microsoft Bing (3.11%), dropping to fourth place.
Daum was founded in 1995 by founder Lee Jae-woong while studying in France with friends. The company name carried a double meaning—"a company that leads communication in the next world" and "a company that creates harmonious chords from diverse sounds (多音)"—and launched ambitiously. Daum began its Hanmail service in 1997. It is no exaggeration to say it opened the internet era in Korea. Daum Cafe marked a milestone in the popularization of online communities. Then in 1999, Navercom, a Samsung SDS in-house venture, was spun off and joined the internet search market. Even into the early 2000s, Daum ranked No. 1 in domestic search share and, alongside Naver, was a key player dividing the domestic portal market. But as Naver and Google rapidly seized the market, Daum lost its footing. In particular, it failed to adapt to mobile, and its influence shrank sharply.
It tried to make a leap in the middle. But the result was failure. Daum met a new turning point by merging with Kakao in 2014. At the time of the merger, there was hope that Daum could rebound by leveraging IT capabilities in mobile and internet. But post-merger synergies fell short of expectations and Daum's presence weakened further.
Daum appears to have chosen to upgrade AI-based personalization services and a differentiated content strategy to increase user time on an already saturated search and content market and secure unique competitiveness. Since April, the Daum app has offered "DD," an AI-based chatbot that provides customized news summaries and information, and to boost time spent on the portal it introduced the short-form tab "Loop" in Apr. 2025, followed by unveiling the short-form-only brand "Shortd" in May.
In reality, it is not easy to raise the market share of a platform once it has fallen. There are many tasks, including rallying internal staff and boosting morale, delivering tangible results in new business models, and rebuilding the brand. Kakao said it has no plan to sell AXZ, but the market says that if AXZ fails to prove results as an AI testbed, the possibility of a sale cannot be ruled out in the long term. It remains to be seen whether Daum will succeed in a revival or settle into memory alongside Yahoo Korea, Lycos, Empas, I Love School, and Cyworld.
Kim Jun-ik, a professor in the Department of Business Administration at Konkuk University, said, "Daum's spinoff appears to be an inevitable choice to reorganize a stagnant portal business, but the process for a platform once pushed back to leap again is by no means simple," adding, "For a renewed leap, a strategic shift is needed to redesign the platform's reason for being, beyond simply adding new features or services."