The board of directors approved the move on Thursday, establishing the new entity under the leadership of Yang Joo-il, who currently heads Kakao’s content division and oversees Daum operations.
The spin-off, according to the company, is part of a broader effort to streamline operations and focus on core business areas.
Once a dominant online portal alongside rival Naver, Daum has seen its market share dwindle to around 3 percent.
“We have taken the first step toward building an environment that can respond nimbly to the deepening competitive market situation,” Yang said in a statement.
The new subsidiary will initially operate Daum’s core services — including email, online communities, and its search engine — under a management contract, with a full business transfer expected by the end of the year.
Kakao had previously established Daum as an internal independent unit in May 2023. The latest move formalizes that arrangement and grants full managerial autonomy to the portal business, a shift Kakao says will improve operational flexibility.
While some analysts speculated the separation could be a precursor to an eventual sale, Kakao executives have pushed back on that notion, emphasizing a focus on revitalization.
Speaking at a shareholder meeting in March, Kakao CEO Chung Shin-a dismissed the idea of selling Daum, saying, “Right now, the focus is on building a good company.”
She added, “For a company to grow, people and structure must be in place, but I judged that Daum currently has a structure that makes it difficult to grow within Kakao.”
Kakao has recently made a series of investments aimed at reviving Daum’s appeal. In January, the company launched a sweeping redesign of the Daum app — its first in nine years — followed in April by the introduction of enhanced content curation chatbots and short-form video services.
reporter
Kim Dong-young
davekim0807@ajupress.com
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