Daums Earnings More Than Double in 3rd Quarter

Daum Communications Corp., South Korea's second-largest Internet portal operator, said Tuesday that

its third-quarter earnings more than doubled from a year earlier on increased revenue from its online advertisement business.

Net income amounted to a quarterly high of 20.84 billion won ($22.97 million) during the July-September period, compared with 9.38 billion won a year earlier, the company said in a regulatory filing.

Sales gained 26.8 percent on-year to 149.81 billion won, while operating profit soared 158.4 percent to 11.22 billion won, it added.

Shares of Daum jumped 5.12 percent to 86,300 won as of 9:02 a.m. on Seoul's secondary market. The earnings results were announced before stock markets opened.

The company attributed the earnings growth to strong revenue from online advertisements linked to Internet queries. The number of queries, which is a key factor for Internet-based advertisement, grew 23.3 percent from April to August, faster than that of its bigger rival NHN Corp., it explained.

During the third quarter, Daum reported that its sales from query-based Internet advertisements amounted to 28.1 billion won, up 53.4 percent from a year earlier. Compared with three months ago, it also grew 14.2 percent, the company added.

In the local Internet portal market, which is dominated by NHN, the operator of the largest portal Naver, Daum has been stepping up efforts to differentiate itself by focusing more on providing high-quality video content including user created content (UCC) to visitors.

To this end, it has launched "TV Pot," a video file-searching site, earlier this year, with the amount of video content available through the service growing more than two-fold since its inception, the company said.

"Daum has shown a remarkable achievement in the field of the UCC-based Internet search service, expanding its presence in the search service market," Daum CFO Kim Dong-il said in a statement. "We will do our best to increase overall sales by securing diversified profit-making business models."

Daum's better-than-expected business performance provides a clue as to how the nation's Internet portal operators have fared in the past three months, analysts say. NHN is to announce its earnings results on Thursday with other Internet companies to follow suit later this week.