By Natasha Lomas
Yahoo (NASDAQ:YHOO) has announced plans to close its Korean business by the end of the year. In a statement posted on its website, the company described the move as part of ongoing efforts to streamline operations and realign its global business. The company hired a new CEO -- former Googler Marissa Mayer -- in July, replacing interim CEO Ross Levinsohn. Reuters notes that South Korea is the first Asian market Yahoo is leaving.
The statement on the close of Yahoo Korea does not go into detail on why the company is leaving the market, pointing only to "growing challenges" making it "very difficult" for it to grow its search business. As with many Asian markets, the local search market in Korea is dominated by homegrown search engines -- notably Naver and Daum.
Yahoo's statement on the Korea exit notes:
Today Yahoo announced that we plan to close our Korean business at the end of this year. This decision is part of our efforts to streamline operations and focus our resources on building a stronger global business that’s set up for long-term growth and success.
Since 1997, our team in Korea has provided high-quality editorial content and services, and has built a successful search advertising network. We’re proud of the work they’ve done. But despite the hard work of the team, the Korean operation has faced growing challenges over the past few years that now make scaling our business very difficult.
We've reached out to Yahoo for further comment and will provide an update with any response.
Last May, Yahoo announced plans to sell half of its 40% stake in the Chinese e-commerce giant Alibaba for $7.1 billion. This summer it also pulled out of Indonesian FourSquare-style location-based social networking service Koprol, a company it acquired in 2010.
Despite all these Asian exits, Yahoo says it's not planning to pull out of the region altogether, noting in its statement:
Yahoo is committed to Asia. We have a solid business in APAC and see a lot of opportunity for growth across our content properties, communications services and ecommerce sites. We’ll continue to focus on building great experiences for the millions of people across the region who come to Yahoo every day.