Daum Founder Steps Down
By Kim Tong-hyung
Staff Reporter
The whiz kid of the Internet era has now disappeared into the sunset. Lee Jae-woong, the founder of Internet company, Daum, recently resigned from the company, just a month after he stepped down as the chief executive of Lycos, a U.S. Web portal Daum acquired in 2004, company officials confirmed.
However, Lee will remain as Daum's top shareholder with an ownership of 18.34 percent, the company said.
Fourty-year-old Lee quickly developed Daum into the country's most popular Internet portal in the late 1990s and early 2000s, based on the acceptance of its ``Hanmail'' e-mail services and ``Internet cafes'' that provided the prototype of social networking sites that are popular around the world today.
However, Daum in the past years has conceded its top-dog status to Naver, who scored big with its customized search services and online game portal, and has struggled to keep growth alive.
Daum acquired the troubled Lycos for $95 million in 2004, with Lee boasting to get the U.S. Internet company back in black within two years using Korean-style Internet community services and upgrading its search engine. However, Lycos proved a failed reclamation project and Daum is now bailing out, trying hard to sell the U.S. company to telecommunications giant KT last year.
The success of Daum may have been a result of Lee's marketing touches, but industry analysts over the years have been claiming that Lee's ``sentimental approach,'' such as his inability to sever the cords on struggling projects like Lycos, has been hurting the company's business.
``Lee's illogical `affection' has prevented Daum from pushing forward the sale of Lycos, or even finding a new owner for itself, but now the possibilities are open,'' said Choi Chan-seok, an analyst from Eugene Investment and Securities.
Lee stepped down from the chief executive post of Daum last year and has been listed as just a ``regular employee'' for the Korean company.
Lee's departure comes at a time when Daum has been enjoying soaring popularity for the first time in years, although that has more to do with the heated public sentiment over the resumption of U.S. beef imports than technical improvements.
Daum's online discussion forum, Agora, emerged as a rallying point for bloggers organizing the anti-government protests on the streets. This triggered a backlash from the conservative ``Big Three" newspapers ― Chosun Ilbo, JoongAng Ilbo, and Dong-A Ilbo ― which have since refused to provide their news stories to Daum.
According to statistics, the traffic on Daum's Web site showed a 33.1 percent month-on-month increase in May, followed with a 22.9 percent jump in June. However, analysts say that the increased page views have limited effect on revenue, with most of the traffic related to social issues and politics, not business queries that provide the most in advertisement sales.
Still, getting some fun from the last public debate, Daum is eager to jump on the latest social issue, regarding the conflict between Korea and Japan over the eastern islets of Dokdo. Daum has currently launched a public campaign to gather money to finance advertisements in the world's leading media outlets to promote Korean control of the islands.