Alphabiz - Upstage to Acquire Kakao’s Portal Daum in Stock Swap Deal, Aiming to Build Next-Generation AI Portal

[Alpha Biz= Paul Lee] Upstage has signed a definitive agreement to acquire AXZ, the operator of portal Daum, from Kakao, marking a major shift in ownership of one of Korea’s leading internet platforms.

Upstage announced on May 7 that it has finalized the acquisition agreement for AXZ, a wholly owned subsidiary of Kakao, effectively completing the transaction process. The deal will be executed through a share swap, under which Upstage will acquire a 100% stake in AXZ while Kakao will receive newly issued shares in Upstage.

The two companies had signed a memorandum of understanding (MOU) in late January and conducted due diligence over the past four months. Kakao’s board approved the sale of AXZ on May 6.

The transaction marks the first time in 12 years that Kakao is divesting the Daum portal business, following its merger with Daum in 2014.

Upstage plans to leverage the acquisition to transform Daum into a next-generation AI-powered portal. The company aims to integrate its proprietary large language model (LLM), “Solar,” with Daum’s search engine and extensive content database to deliver more advanced services.

The strategy centers on moving beyond traditional keyword-based search toward “context AI” services that understand user intent and context to generate more precise and relevant responses.

Upstage also expects the deal to create synergies with its participation in the national “sovereign AI foundation model” project, contributing to the broader expansion of Korea’s domestic AI ecosystem.

“Combining Upstage’s AI capabilities with a national portal that has over 30 years of history will mark a symbolic turning point in the evolution of the AI industry,” said CEO Kim Sung-hoon.

The transaction remains subject to regulatory approval, including review by the Fair Trade Commission, though industry observers expect the process to proceed without significant hurdles.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)