Daum goes solo: Kakao spins off portal after 10 years

Daum, South Korea’s second-largest internet portal, has formally split from tech giant Kakao to operate as an independent legal entity for the first time since their merger more than a decade ago.

Effective Monday, the legal provider of Daum services has shifted from Kakao to AXZ, a wholly owned Kakao subsidiary, according to industry sources. The change marks the first legal and administrative separation between the two platforms since their 2014 integration.

A Kakao official confirmed the transition, noting that “all necessary system checks have been completed following the change in legal service entity,” and pledging a seamless transfer of business operations by year-end.

Despite the legal realignment, Daum users will not face service disruptions. The platform will continue to operate under Kakao’s unified account system, allowing existing users to access Daum services without modifying credentials or settings.

The spinoff stems from Kakao’s broader restructuring earlier this year, when its in-house content division was carved out and renamed AXZ in June. The move is widely interpreted as part of Kakao’s strategy to sharpen Daum’s portal competitiveness, bolster its content ecosystem and accelerate expansion into AI-driven services.

Once a dominant force in Korea’s search market, Daum is now repositioning itself as a comprehensive content platform. Recent launches include personalized news summaries powered by its AI chatbot DD, and TimeTalk, a real-time celebrity news commentary feature that uses AI to amplify community interaction.

To tap into surging demand for short-form video, Daum has also rolled out ShortD, a bite-sized content feed accessible via a new Loop Tab in its app — an effort aimed at boosting user retention and increasing time spent on the platform.

Yet Daum faces steep market challenges. According to Internet Trend data as of Thursday, Korea’s search engine market is led by Naver (64.22 percent), followed by Google (25.53 percent), Microsoft Bing (4.17 percent) and Daum (3.41 percent). Once commanding nearly 40 percent of the market, Daum now trails even Bing, raising questions about whether the platform can regain momentum.

Experts say Daum’s revival hinges on whether it can leverage its legacy user base and roll out innovations powered by next-generation AI.

“Whether Daum can rediscover its early challenger spirit and execute ambitious ideas remains to be seen,” said Jeon Seong-min, a business administration professor at Gachon University. “But if it effectively mobilizes its loyal users and quickly develops AI-driven killer apps, a turnaround is still possible.”

Meanwhile, Kakao is intensifying its AI strategy across its broader ecosystem. The company is embedding advanced AI features into its flagship messaging app, KakaoTalk, using behavioral analytics to refine content recommendations and strengthen e-commerce integration.

In recent months, Kakao has integrated OpenAI’s ChatGPT and its own AI model Kanana into KakaoTalk, offering hyper-personalized services such as location-based shopping suggestions and targeted local advertising — signaling a major push to differentiate its platform through AI-enhanced functionality.