KaKao

Seoul, Korea, November 5, 2004 - Daum Communications Corp. (KOSDAQ: 035720; www.daum.net), Korea“s largest Internet portal, reported financial results for the third quarter ended September 30, 2004. Daum reported record third quarter revenues of $44.2 million (FX=KRW1,121/$), up 5.4% quarter over quarter and up 30.3% year over year; operating income of $8.9 million, down 14.6% quarter over quarter and down 3.9% year over year; EBITDA of $13.7 million, down 8.3% quarter over quarter and up 4.0% year over year.

Even though the third quarter is traditionally an off-peak quarter in the Internet industry and despite the current slowdown of the economy in Korea, Daum still enjoyed another successful record-breaking quarter with the consistent growth in Online Advertising and the revitalized growth of Transactional Services.

Among its portal revenues, Daum reported third quarter online advertising revenues of $23.8 million, up 8.3% quarter over quarter and up 32.2% year over year; transactional services revenues of $9.2 million up 9.4% quarter over quarter and up 24.3% year over year.

Despite the recent economic recession and continuous slowdown of the online advertising market, Daum showed consistent revenue growth in online advertising, solidifying its position as the best online marketing platform, successfully launched new services such as “PC Virus Protection“ and increased revenue in Daum Comics and CUVE, and recorded revenue increase through differentiated search service.

Online Shopping (d&shop) has developed a CRM Tool that allows the system to perform various target-marketing strategies and is currently preparing to establish a unified delivery system. However, the low consumption level and decreased consumer spending due to the economic downturn negatively impacted the Online Shopping, resulting in revenues of $11.0 million, down 3.4% quarter over quarter and up 31.8% year over year and revenues for nine-months ended of 2004 were $32.7 million, an increase of 57.2% from the same period of 2003. In addition, gross merchandise sales were $89.6 million, up 2.1% quarter over quarter and up 48.8% year over year.

Daum Direct Auto Insurance Co., Ltd., one of Daum“s subsidiaries, recorded encouraging financial performance of total premium of $16.0 million, an increase of 45.1% quarter over quarter, and 37,000 contracts, an increase of 37.0% quarter over quarter. Daum Direct 1 reported total premium for nine-months ended of 2004 of $30.5 million and 72,000 contracts. Daum Direct 1 is ranked second in terms of newly registered subscribers in only its tenth month in operation.

Daum also reported Operating Income of $8.9 million, a decrease of 3.9% quarter over quarter, due to increase in marketing costs and outsourcing fees for the launching of new services. Operating Income for nine-months ended of 2004 was $29.4 million, an increase of 16.2% from the same period of 2003.

In the fourth quarter, Daum will enhance the profitability of Planet, a personalized community service launched in September, and develop a new and innovative advertising method and, using these developments, will look to open up a new market. In addition, Daum is preparing to launch a new AOD service, streaming music service, through Oi Music, Ltd., which has already reached deals with major music source companies. In addition, Daum Search will continue to develop User Created Contents (UCC) and will enhance the quality of the search engine with personalized profile and local search.

"With the Korean Internet competency and competitive advantage in the Internet portal business, Daum will be transformed into a global company in the fourth quarter with the addition of US and Japanese operations" said Jae-woong Lee, President and CEO of Daum. "This will be a starting point of a new era in the next ten years for Daum Communications Corp."

With the largest community service in Japan called Cafesta, TAON Corp. (www.cafesta.com) will become a strong online advertising platform by increasing its user base and traffic with the opening of personalized community and Cafe. Daum will apply its successful experience and know-how in the Japanese online market by customizing the service so that the cultural characteristics of Japan is embedded. Until the end of this year, TAON will concentrate on system stabilization and new service development and start its aggressive marketing campaign in 2005.

Daum finalized its acquisition of Lycos, Inc. on October 5, 2004 through the holding company FENIX Acquisition Corp. Lycos is a world-renown Internet portal company that provides online advertising and various paid contents services. Lycos has been providing the second and third-ranked web-publishing site “Tripod“ and “Angelfire“ and recently launched a narrow-band personalized social networking community/homepage service called “Circle“ With the launching of “Circle“, Daum will make the community/homepage service to become a strong traffic driver through Daum“s biggest and core asset and competitive advantage in the community service business. Daum“s objective by the end of 2004 is to complete the restructuring and operating process so that Lycos can consistently drive traffic mainly through the community/homepage service and achieve EBITDA positive during the second half of 2004. The Internet infrastructure in the US also is improving and expanding at a very rapid pace with the increase in Broadband penetration rate and increase in the number of Broadband subscribers.