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Daum, SK team up against Naver’s dominance

Nation’s smaller portal operators to offer combined services


Operators of the nation’s smaller two portals Daum and Nate on Thursday signed a strategic pact to offer a seamless combination of their services.

“We have decided on this strategic partnership to provide the best available services to our customers,” said Joo Hyung-chul, the chief executive of SK Communications, the operator of Nate.

But hinting at a more covert objective of keeping NHN’s seach engine Naver in check, Joo added that he hopes for the country’s top two portals to be able to “create a new online eco-system through their latest joint venture.”

The MOU signed between Daum Communications and SK Communications was mostly to allow users to essentially enjoy many of the services offered on their portals without having to log in separately.

For instance, Daum users with accounts in Cyworld, a social networking services site run by SK Communications would be able to log into Cyworld using their Daum accounts.

Nate users, on the other hand, can access Daum’s famous blogs and discussions websites without having to log in with Daum accounts.

The synergy is obvious, SK Communications officials said, citing its strong lead in social networking that would be combined with Daum’s energetic discussion platforms. 

SK runs Cyworld, which has about 25 million users and boasts visitor tallies in Korea surpassing Facebook and Twitter, while Daum is famous for its influential blogs and discussion forums on controversial issues.

The two portals will collaborate so that ultimately, users will see identical results on both Nate and Daum in their online searches, including the same ads.

NHN Corp.’s latest decision to break from its search ad agency to operate its own called NHN Business Platform was seen to have offered the two smaller portals a significant incentive to join hands in this area.

The news of the alignment came as somewhat of a surprise, industry insiders said as previously, Joo had publicly stated his objectives for overtaking Daum.

“The target is to overtake Daum within the year,” Joo had said at a press conference in late 2009.

Naver is the biggest portal in Korea with a market share of almost 70 percent in terms of search inquiries as of January this year, according to Korean Click, a market research firm.

Daum had the second-biggest share of 20.4 percent, which was significantly lower than Naver. Nate trailed at 5.5 percent despite SK Communication’s persistent attempts to promote its portal, such as through tie-ups with smart TV manufacturers.

By Kim Ji-hyun (jemmie@heraldcorp.com)
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