Upstage and Kakao said on 29 January their boards had approved a memorandum of understanding for Upstage to acquire AXZ, operator of the internet portal Daum, through a share swap.
Why Upstage is buying AXZ (Daum)
Upstage plans to combine its Solar large language model with Daum's search engine and content, including Tistory blogs and Daum Cafe communities, to build an AI portal. For Kakao, the sale continues a drive under chief executive Chung Shin-a to cut its affiliate count, which the Korea Herald said had fallen from a peak of 147 to 94.
Deal terms and financing
Kakao will transfer its AXZ shares to Upstage in return for a minority stake in Upstage. Kakao's first-quarter report states that on 7 May 2026 it signed an agreement to transfer its entire AXZ holding and to acquire 309,161 newly issued Upstage convertible preferred shares, and that it would also take part in a ₩16.2bn AXZ rights issue on 15 May. The Korea Herald reported a deal value of about ₩200bn, citing investment banking sources.
Regulatory approvals and timing
Upstage announced on 7 May 2026 that it had completed the acquisition after about four months of due diligence, according to Digital Today.
Market context
Kakao merged with Daum Communications in 2014. Daum's share of the domestic search market fell to 2.94% last year, according to InternetTrend data cited by the Korea Herald, behind Naver, Google and Microsoft's Bing.
