KaKao

Revenues
Daum Communications Corp. (“Daum”) recorded Total Revenues in the fourth quarter of KRW 47.0 billion, a decrease of 5.0% QoQ and an increase of 12.7 YoY. Total Revenues for 2004 were KRW 187.4 billion, an increase of 32.5% YoY.

Portal Business
Revenues from Online Advertising in the fourth quarter of 2004 were KRW 24.4 billion, a decrease of 8.7% QoQ and an increase of 16.1% YoY. The QoQ decrease was due to the slowdown in the banner advertising market and the separation of SME advertisers. Revenues from Online Advertising for 2004 were KRW 98.8 billion, an increase of 34.1% YoY. Among the Online Advertising revenues, Search-related Listings Revenues in the fourth quarter of 2004 were KRW 10.9 billion, an increase of 13.9% QoQ.

Revenues from Transactional Services in the fourth quarter of 2004 were KRW 9.2 billion, a decrease of 11.1% QoQ and a decrease of 7.5% YoY. Revenues from Transactional Services for 2004 were KRW 38.6 billion, an increase of 14.6% YoY.

Online Shopping Business
Revenues from Online Shopping (d&shop) in the fourth quarter of 2004 were record-breaking KRW 13.4 billion, an increase of 8.1% QoQ and an increase of 24.8% YoY. Revenues from Online Shopping (d&shop) for 2004 were KRW 50.0 billion, an increase of 47.0% YoY. Gross Merchandise Sales (GMS) of Online Shopping in the fourth quarter of 2004 were KRW 119.6 billion, an increase of 19.1% QoQ and an increase of 49.1% YoY. GMS of Online Shopping in 2004 were KRW 408.3 billion, an increase of 53.1% YoY.

Gross Profits
Gross Profits in the fourth quarter of 2004 were KRW 24.3 billion, a decrease of 11.8% QoQ and an increase of 2.2% YoY. Gross Profits for 2004 were KRW 104.9 billion, an increase of 27.4% YoY. Gross Profit Margin in the fourth quarter of 2004 was 51.8% and Gross Profit Margin for 2004 was 56.0%.

Operating Profits
Operating Profits in the fourth quarter of 2004 was KRW 2.8 billion, a decrease of 72.4% QoQ and a decrease of 70.2% YoY. The QoQ and YoY decrease were due to the increase in marketing costs, labor costs, and bad debts. Operating Profits for 2004 was KRW 35.6 billion, a decrease of 5.1% YoY. Operating Profits Margin in the fourth quarter of 2004 was 5.9% and Operating Profits Margin for 2004 was 19.0% (Please see Table 4).

Recurring Profits/Losses
Recurring Losses in the fourth quarter of 2004 were KRW 23.9 billion. Total equity method losses in the fourth quarter of 2004 were KRW 18.8 billion. Equity method losses from Lycos were KRW 10.4 billion, including amortization of goodwill of KRW 4.9 billion. Equity method losses from Daum Direct Auto Insurance Co., Ltd. were KRW 6.8 billion. Because of the large-scale of equity method losses in the fourth quarter of 2004, Daum recorded Recurring Losses of KRW 12.4 billion in 2004.

EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization)
EBITDA in the fourth quarter of 2004 were KRW 8.4 billion, a decrease of 45.6% QoQ and a decrease of 39.6% YoY. EBITDA for 2004 was KRW 56.3 billion, an increase of 3.3% YoY. Despite the Recurring Losses in 2004, Daum recorded meaningful EBITDA increase in 2004 and showed stable cash flow structure. EBITDA Margin in the fourth quarter of 2004 was 17.8%, and EBITDA Margin for 2004 was 30.1%.