Yahoo Korea said Friday that it will shut down its business in Korea and halt its local Internet portal service in December. It will be the company’s first Asian shutdown.
The decision came because the Korean unit of the U.S.-headquartered company has been struggling to stay afloat due to heated competition from local rivals NHN and Daum.
In a statement, Yahoo said the company has faced several challenges in the past couple of years and decided to pull out of the Korean business to put more resources on the global business and become more powerful and successful.
“Yahoo is seriously tasked with bringing a drastic change to a much smaller and profitable company amid faster-moving rivals such as Google and Facebook. Yahoo will focus on other Asian markets but not in South Korea,’’ said Park Hae-dong, the head of public relations office at Yahoo Korea, by telephone.
With the money saved from the closure of its Korean office, Yahoo decided to set up a joint venture with Yahoo Japan and Kakao Talk Japan for mobile businesses in the neighboring country.
Park stressed the decision was made by its headquarters based in Sunnyvale, California, the United States and added that some hundreds of its officials in Korea will follow the company-led new job searching programs with proper compensation.
Yahoo started its Korean business in 1997.
“I can say the shutdown decision was a part of Yahoo’s global restructuring efforts. Yahoo is facing several challenges in the past couple of years,’’ said Park.
Industry officials said the decision was no surprise because Yahoo failed to create revenue, here, due to competition from local portal giant NHN, the operator of Naver, and Daum.
Until the early 2000s, Yahoo Korea was the leader in the local portal market on the back of Yahoo’s then stronger global brand. But as of the end of September this year, Yahoo’s share in Korea was less than 5 percent.
“That’s why Yahoo Korea has been closing its money-losing services such as map- and web cartoon-related ones. There were no business updates over the past few months,’’ said a Yahoo official, asking not to be identified.
The departure of Yahoo Korea comes a year after another local portal Paran exited from the market due to falling profits. NHN’s Naver controls 70 percent of the local portal market, followed by Daum and Nate.
SK Communications, which is the operator of the Nate portal, has recently announced a voluntary job retirement program as part of a company-wide restructuring initiative.
“Local portal companies are in trouble. Without a faster transition toward next business models, even leading portal companies won’t survive in the future,’’ said an official from Daum.
source:koreatimes.co.kr
