(22 October 2012 2:50 pm) 

MUMBAI: Digital media company Yahoo! has said it will close its South Korean operations at the end of this year to concentrate on its global business where it is pitted against powerful rivals like Google and Facebook.

South Korea is the first Asian country where Yahoo! is exiting as part of its global restructuring exercise.

"Yahoo has faced several challenges in the past couple of years and decided to pull out of the (Korean) business to put more resources on global business and become more powerful and successful," Yahoo said in a statement.

Yahoo! Korea, a Yahoo! subsidiary, has not been able to beat local rivals such as NHN, Daum Communications Corp and SK Communications. Local companies have a strong brand loyalty which makes South Korea a difficult market for foreign cos to operate in.

Headquartered in Gangnam district of Seoul, Yahoo! Korea started business in 1997 with 200-250 employees on its roster currently. The company will terminate Korean online portal services in December. Its Korean website will be automatically linked to an English website from early next year.

"Since 1997, the Yahoo! Korean team has provided high-quality editorial content and services, and has built a successful search advertising network. But despite this, the operation has faced growing challenges over the past few years that now make scaling Yahoo's business very difficult," the statement added.