Yahoo has decided to pull the plug on its portal service in South Korea in December after years of struggling to compete in one of the world’s most wired markets.
“Yahoo has faced several challenges in the past couple of years and decided to pull out of the [Korean] business to put more resources on global business and become more powerful and successful,” the internet service provider said on Friday.
The withdrawal comes as new chief executive Marissa Mayer prepares to outline a new strategy for the company. It also highlights how South Korean’s loyalty to strong homegrown brands, such as NHN’s Naver, have made the country a particularly difficult market for foreign technology companies.
Yahoo is a marginal player in South Korea’s internet search sector, having only 2-3 per cent market share. Naver is a dominant player, commanding nearly 80 per cent of the market.
Foreign search engines have struggled to rival Naver in Korea. Google has also laboured in traditional internet search market but it is rapidly broadening its customer base in mobile search, taking advantage of the increasing number of the Android-based smartphone users in Korea.
Yahoo’s decision follows the withdrawal of Taiwanese smartphone maker HTC from Korea, after it struggled to compete with its bigger rivals such as Samsung Electronics and LG Electronics in the fast-growing Korean smartphone market.
Yahoo Korea suffered a drop in online traffic in recent years and has tried to revive its fortunes in Korea this year by expanding content related to the so-called Korea wave amid increasing popularity of Korean pop culture in across Asia.
Following its departure from Korea, Yahoo is expected to focus more on its successful businesses in other parts of Asia such as Singapore, Malaysia and the Philippines, as well as Hong Kong and Taiwan, where it is one of the most popular search engines with a more than 90 per cent market share.
Yahoo still has more than 700m monthly visitors, but its revenue growth has underperformed the wider internet market.
In Asia, it has faced questions over how to monetise its investments in the region. Last month it cashed in an eightfold return on its investment in Alibaba, the Chinese e-commerce company.