Korea becomes black hole for some global IT firms

Yahoo! Korea is to become the latest globally well-known IT firm to close its Seoul office, with the Internet venture expected to leave the country by the year-end.

Considering that Korea is the home turf of leading IT companies like Samsung and LG Electronics, multinational companies have been experiencing difficulty in sales and business here.

Yahoo! Korea, established in 1997, had been the nation’s top online portal, taking over 80 percent of the online search market in early 2000.

However, its market share had slipped to just 0.2 percent of the local portal industry in August, losing most of its share to local names NHN and Daum, according to industry sources.

“The decision has been reached to inject our resources in improving business for long-term growth and for a more successful and stronger global business scheme,” said its officials, while acknowledging its operational difficulties over the past few years.

Its subsidiary search company Overture Korea will also be pulling out of the country together with its parent firm after failing to renew its contract with Korean major portals.

NHN, the operator of Naver, already announced its bid to work on the firm’s proprietary search advertisement platform last year and Daum also made a similar move this year. Daum’s contract with Overture ends at the end of this year.

Earlier in July, Taiwanese smartphone maker HTC shut down its Seoul office soon after the chief of the Korean office stepped down in May.

The firm said it was an inevitable to add innovation at the organization.

HTC has been unable to release a new smartphone since its release of the Sensation XL in December of last year.

Along with HTC, internationally recognized game developing firms like THQ and Activision Korea also left the nation last year due to their weak presence here.

By Cho Ji-hyun (sharon@heraldcorp.com)