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Daum to challenge eBay with auction acquisition
By Martyn Williams

South Korean Internet portal operator Daum Communications Corp. is mounting a challenge to eBay Inc.'s efforts in that country with the acquisition of a rival Internet auction site operator.

Daum, which recently acquired portal operator Lycos Inc., has purchased a 90 percent stake in online auction marketplace operator Onket for 4.25 billion won (US$4.2 million), Daum said Friday.

Onket was established by Lee Keum Ryong who previously headed Internet Auction Co. Ltd., which is South Korea's number one online auction service and it now owned 99.7 percent by eBay Inc. The Onket stake was acquired from Inicis Co. Ltd., of which Lee is currently CEO and which operates an electronic payment system in competition with eBay's Pay Pal service.

As a result of the acquisition the running of Onket will be handled by Choi U Jeong, who heads Daum's own D&Shop online marketplace service, and the service will be rebranded at Daum Onket from May this year, said Jody Chung [cq], a spokeswoman for Daum. The company will promote D&Shop and Daum Onket side-by-side, the former for conventional online shopping and the latter for online auctions.

"We will conduct an aggressive online marketplace business with Onket, on the basis of our successful experience in e-commerce with our existing D&Shop and the great number of users of our portal," said Chung.

D&Shop has about 9 million users and Onket has more than 3.5 million users, she said. Both sites trail Internet Auction Co. Ltd., which has more than 10 million users, according to local media reports.

Posted February 25, 2005 05:23 PM |