RealTime IT News

Internet Ad Firms Enter Korean Market

24/7 Media plans to establish a joint venture in Korea with Daum Communications Corp., one of the major portal service providers in Korea.

Lee Jae-Woong, president of Daum Communications Corp., said that 24/7 Media Korea, the joint venture capitalized at 700 million won (US$583,000), will be established in 65-35 joint venture between 24/7 Media and Daum Communications.

He explained that a formal announcement would be made in mid-May. Daum is seeking to introduce US$6 million from a U.S. investor by the end of May. Lee noted that Daum would be listed on the KOSDAQ, Korea's over-the-counter stock market, around June.

Also, Double Click, the second largest Internet advertising company in the United States, is expected to make its debut in the Korean market in July, according to industry sources.

Industry analysts say that the establishment of the Internet ad agency will bring more advertising opportunity to foreign companies which are aggressive in marketing overseas, thus further boosting Korea's Internet advertising industry.

With the establishment of the joint venture, 24/7 Media Korea, Daum Communications intends to occupy 10 percent share of the nation's Internet advertising market, which is now estimated at about 30 billion won (US$25 million). And, its marketing will be more focused on targeting overseas clients.

So far, Yahoo! Korea has been the only commercial Web site that has received advertising orders from abroad, thanks to the global advertising network of Yahoo!.

Daum's Internet portal site, Hanmail.Net Online, a free Web-based e-mail service, has more than 1.7 million registered users and enjoys a daily average of about 7.5 million page views. It is posing a challenge to Yahoo! Korea, which has around 8 million page views per day.

The company has enjoyed rapid growth in ad revenues which amounted to 600 million won (US$0.5 million) during the first quarter of this year, surpassing its sales for the whole year of 1998. The company set its 1999 sales goal at 3 billion won (US$2.5 million).

Daum expects that the number of registered users of its free e-mail service will increase to about 3 million by the end of this year, according to company officials.