KaKao

February 8, 2006 - Daum Communications announced that it held a board of directors“ meeting today, where it made the decision to separate the “commerce division“, its online distribution business unit, by means of personal stock split as part of its strategy to reinforce the company“s foundation and aggressive management.

With the decision, Daum Communications will set up a subsidiary, temporarily called “Daum Commerce“, on April 30 after an approval at a general meeting of the shareholders set to be held on March 24.

The new company, Daum Commerce, will be separated from the existing Daum Communications through a personal stock split based on the ratio of stakes owned by shareholders of Daum Communications as of the date of allocating shares in the new company. The separation ratio between Daum Communications and Daum Commerce is expected to be 8:2. After separation, the new company will be listed on KOSDAQ. Prior to that, it must be evaluated for re-listing and be in compliance with all relevant KOSDAQ re-listing rules.

After the separation, Daum Communications expects to enhance the expertise and efficiency of each company, while maximizing their corporate values and those of shareholders, by expanding opportunities for investment by stockholders. By concentrating more on management and pursuing specialty-oriented business, Daum“s strategy is to sharpen its competitive edge. In that process, it will concentrate on augmenting existing online media platforms and establish more ethical management systems. In particular, Daum will seek to differentiate itself with other players in the market by attracting more investment and intensifying allied marking efforts, in addition to continuing to provide high value-added services to its customers.