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NHN buys search engine firm

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June 29,2006
NHN Corp., Korea’s largest Internet company, said yesterday it had bought out local search engine company 1noon for 35 billion won ($36.5 million). NHN operates the Internet portal site Naver, the most frequently-visited portal site in Korea with daily hits averaging 16 million and holding 70 percent of the online search engine market in advertising revenue. 1noon ― pronounced “cheotnun” meaning “first snow” ― was spun off from game developer Neowiz in May last year with an initial capital of 1 billion won. For the past few months, the small company has offered test services of a search engine based on a self-developed technology that enables searches based on themes instead of keywords. Chang Byung-gyu, joint founder of Neowiz, and president of 1noon, claimed the new technology would be the “Korean version” of Google. The takeover was viewed by many in the local industry as an attempt to fend off attempts by global search giant Google to buy into the local market. Google headquarters was not available yesterday for comment. The company does not have a local office, but according to a local agent, Google officials met with Mr. Chang but did not reach a “detailed” agreement. The global Internet firm has already signed an advertising distribution contract with the local Internet firm Empas and is conducting interviews for a Korean branch head. NHN’s chief executive Chae Hwi-young said his company hopes the acquisition of 1noon will help pave the way for its entry into foreign search service markets. “We will begin preparing to launch businesses beginning in other parts of Asia to become a global Internet firm,” he said. Mr. Chang will continue to develop the search engine specifically for NHN. “When we first established 1noon, our spirit was to challenge the mainstream portals, and I admit it is disappointing to give in, but in a sense, now our competitors are different ― they’re global,” he said. Also yesterday, NHN announced that it would issue new shares to increase shareholdings as of the day before by 200 percent. Analysts approved of the move. “Now that NHN has acquired long-term growth potential and market power, issuing new shares will increase liquidity,” said Choi Hoon, a researcher at Yuhwa Securities. NHN shares rose 7.6 percent yesterday before closing at 309,900 won. by Wohn Dong-hee


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