By Kim Tong-hyung
Staff Reporter
Enduring haymakers from angry regulators, politicians and newspapers, the country's top two Internet companies, NHN and Daum, find themselves dazed and confused.
And, at least for the moment, they can't seem to figure out their own game, with both companies struggling in their traditional strength areas, according to market researchers Tuesday.
NHN, the undisputed king of the country's Internet industry thanks to its plus-70 percent share in search through its portal Naver (www.naver.com), is alarmed to see the average Internet user becoming lesser of a creature of habit.
Naver's share in search queries was at 73.48 percent last week. This represented the seventh consecutive week Naver suffered a drop in its share of the search market, according to market research firm Korean Click, after hitting 77.29 percent in the first week of June.
Some of Naver's lost customers may have migrated to Daum (www.daum.net), which saw its search query share rise from 11.42 percent to 15.38 percent during the same period.
Industry analysts believe that the popularity of Daum's online debate section, Agora, which emerged as the seedbed for anti-government bloggers amid the controversy over U.S. beef imports, is helping the portal revive its once-dying rivalry with Naver.
``Agora has undoubtedly helped Daum improve its brand image and that is resulting in the increase in search traffic," said Jeong Woo-cheol, an analyst from Mirae Asset Securities, pointing out that Naver's timing and range of decline in search share coincide with Daum's rise.
``Naver still has a plus-70 percent share and its disparity with Daum is still evident, but it seems also true that Daum's past efforts to improve its search services is finally bearing fruit," he said.
Naver built its dominance in search through its ``knowledge search services," which allows Internet users to edit search results through a question-and-answer format in a direct approach to improve relevancy.
Daum, struggling to come up with an idea just as effective, has been countering by better integrating text and audiovisual content in their search results and maximizing the use of content created by its bloggers.
However, Daum can't celebrate too loudly when its increasing popularity in search overlapped with lesser visitors to its once-popular news section. The page views of Daum's news site had been consistently over 1 billion, but sat at around 900 million in the second week of July, which was the third straight week that the numbers dropped.
The news section is clearly Daum's most popular feature, one of the few areas it held an edge over Naver. However, with the page views on Naver's news site nearing the 700 million mark, Daum's leadership looks fragile.
Industry watchers are wondering whether the recent refusal by conservative newspapers to provide their articles to Daum is starting to have an impact. Newspapers snubbing Daum include the ``Big Three,'' Chosun Ilbo, JoongAng Ilbo and Dong-A Ilbo and major business papers like Maeil Business Newspaper and Korea Economic Daily.
The newspapers, currently the biggest backers of the Lee Myung-bak administration, were miffed after Daum provided the platform for an online campaign pressuring companies to stop providing advertisements to them.
The beleaguered Lee government had been looking for new ways to tighten control over the Internet after being kicked in the teeth by anti-government bloggers angered over its decision to resume U.S. beef imports despite concerns over public health.
Naver was quick to steer away from the political debate, announcing earlier this month that it plans to give up news editing on its main page.
After enjoying the post-Agora limelight, Daum finally gave in and is trying to make nice with its enemies, announcing Monday that it plans to share revenues from banner advertisements with newspapers.