Strengthening Portal Biz
Kakao, which has focused on the messenger service Kakao Talk and Online to Offline (O2O) businesses, comes forward to strengthen the competitiveness of web portal Daum.
It aims to raise synergetic effects between online portal Daum and mobile portal Daumapp, and increase the advertising earnings of online portal Daum by strengthening contents including 1boon (1 minute), Storyfunding, as well as news service.
According to Kakao on June 19, it has divided its current service sector into two parts; a social sector and a portal one. The company is to improve services such as the information recommendation, which is made by the sophisticated RUBICS system based on the analysis of users’ reaction in real time centered on Daumapp and media in the newly created portal sector. Last December, the RUBICS system was applied to all areas related to news including image news.
This can be interpreted as Kakao’s strategy seeking to raise advertising sales that account for half of the company’s total sales. Kakao’s ad sales reached 129.4 billion won in the first quarter of this year, amounting to 53.4 percent of the total sales. The advertising sales are rapidly declining, even if their share is still high. In other words, the figure standing at 145.5 billion won in the first quarter of last year dropped by over 11 percent during the same period of this year.
There is some criticism on Kakao as it has not produced any significant results from strengthening social networking services (SNS) including Kakao Talk and Kakaostory, since merging with Daum Communications. Even the negative views might be behind this move to strengthen the portal business.
As a result, SNS and portals make a big difference in terms of their influence. As of this March, the share of the Kakao Talk service is 95 percent in the domestic market, and that of the Kakaostory service among major mobile SNS in the country stands at 24 percent, remaining stable in the market.
On the other hand, the share of unified search query of personal computers, which shows levels of activity in search service, stands at 16 percent, with that of the search query including mobile standing at 12 percent, which is still far behind 76% of NAVER.