Daum splits from Kakao, aims to reclaim market share

A poster for Daum's app, updated in January / Courtesy of Kakao

Internet portal Daum completed its split from Kakao on Monday, becoming an independent business run by AXZ, a new subsidiary that spun off from Kakao’s in-house content company-in-company (CIC) in May.

After 11 years under the tech giant, Daum now faces the challenge of reversing its declining market share and revitalizing its struggling portal business, which is dominated by Naver and Google.

Daum’s service operations have officially shifted from Kakao to AXZ, following the companies’ full separation at both legal and business-operation levels, including privacy policies and terms of service.

AXZ now manages core services such as email, the community platform Cafe, search, news, shopping, games and the blog-hosting service Tistory. The company is led by Yang Joo-il, former head of Kakao’s content CIC, who previously held positions at Naver and NHN affiliates.

Kakao said the separation is intended to enable faster, independent decision‑making and a sharper business focus at Daum, while Kakao concentrates on its own artificial intelligence (AI) strategy and KakaoTalk‑centered commerce and ads.

Ahead of the split, AXZ launched an aggressive hiring campaign across media planning, video, DevOps, search engineering and ad sales as it builds its own infrastructure separate from Kakao’s.

Seeking a fresh start with the relaunch, AXZ is repositioning Daum as a comprehensive content platform that leans heavily on AI personalization, communities and short-form video. The company had already been sharpening this focus even before the split, operating DD, an AI chatbot that summarizes and recommends news and information tailored to users.

A page for Daum's short drama tab / Courtesy of Kakao

Daum recently rebranded its short-form platform Loop, and launched a new service for short-form drama series earlier this year, aggregating diverse content from a wide range of partners, including news outlets, content creators and influencers.

It is also trying to reignite community engagement, long one of Daum’s strengths, by reintroducing interactive features such as TimeTalk, a real-time comment space on news articles that stays open only for 48 hours after the article’s posting. The feature uses AI moderation tools as a safeguard to filter out abuse and address concerns over malicious comments.

By deepening participation and offering user-friendly content, AXZ seeks to extend user time spent on Daum and collect higher-quality data that can feed both personalization and advertising.

However, Daum’s turnaround effort starts from a weak competitive position. Its share of the domestic search engine market, which once ranged from 30 to 40 percent, has fallen to around 3 percent as of this month, placing it behind Naver, Google, and even Microsoft’s Bing.

Daum helped usher in Korea’s internet era with its email service, Hanmail, in 1997, and popularized online communities through Daum Cafe, sharing the lead in the domestic portal market with Naver in the early 2000s.

However, as Naver and Google tightened their grip on searches, Daum continued to lose ground. The 2014 merger with Kakao was expected to revive the portal by leveraging Kakao’s mobile and tech strengths, but efforts fell short and Daum’s brand presence weakened.

This sharp decline underpins skepticism in the industry about whether independence alone can restore its former influence.

Regaining its share in a saturated search and content market will require more than cosmetic tweaks, especially as a brand less familiar to younger users. Daum now faces challenges delivering gains in user engagement, distinctive AI-driven services and monetization, while restoring its brand after years of decline.