Once dubbed the "people's portal," Daum is seizing a revival opportunity in the age of artificial intelligence (AI). Since its launch in 1995, Daum led the popularization of the internet in South Korea with services like Hanmail and cafes. However, its prominence waned in the 2000s until it was acquired by AI company Upstage, marking a potential resurgence.
On May 7, Upstage finalized a contract to acquire AXZ, the operator of Daum, from Kakao. This deal involves a stock exchange where Kakao transfers its AXZ shares to Upstage while acquiring a stake in Upstage.
With this acquisition, Daum transitions from being part of Daum Communications, which merged with Kakao in 2014, to being owned by Upstage. This change signifies more than just a transfer of ownership; Upstage aims to transform Daum into a next-generation AI portal, revitalizing its competitive edge in the AI era.
Daum's heyday began with Hanmail and cafes. The free webmail service launched in 1997 popularized personal email, expanding Daum's initial user base. The introduction of Daum Cafe in May 1999 fostered online community culture, evolving Daum from a simple email service to a comprehensive portal.
However, Daum's dominance was short-lived. In the 2000s, Naver gained traction with its "Knowledge-in" feature, shifting the portal market's focus. User engagement expanded beyond news and email to include shopping, video, and community features.
As the mobile era emerged, Google significantly increased its market share, leaving Daum without a clear path to recovery. Although Daum sought a resurgence through its merger with Kakao in 2014, its strategic presence diminished within Kakao's mobile ecosystem.
Daum's search market share fell to single digits, and it struggled to regain its former influence as a comprehensive portal. Critics noted that Daum had become reliant on news consumption and limited community features.
Kakao separated Daum into an independent entity in 2023 and established AXZ through a physical spin-off last year. Despite declining search share and user attrition, Daum has been restructuring to revive its core portal functions, including news layout changes, enhanced content recommendations, and community feature improvements. Recently, it reintroduced a "real-time trends" feature.
With Upstage's acquisition of AXZ, Daum plans to evolve into a next-generation AI portal. The strategy focuses on integrating Daum's accumulated search and content data with Upstage's AI technology. Upstage intends to enhance services based on Daum's search capabilities, including the integration of contextual AI.
* This article has been translated by AI.
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