IN THEORY Daum, an internet portal in South Korea, is acquiring Kakao, a startup whose messaging app, KakaoTalk, is on most of the country’s smartphones. In practice, it is the other way around: the merger unveiled on May 26th gives Kakao’s shareholders the lion’s share of the new company, although Daum has more revenue, profits and staff, plus a stockmarket listing. The deal, valuing Kakao at $3 billion-odd, shows that messaging apps are still hot property.Hottest of all is WhatsApp, a Silicon Valley startup with 500m users, which Facebook bought in February for a staggering $19 billion in cash and shares. (This week Facebook asked the European Commission to review the takeover, rather than risk antitrust inquiries in several countries.) The same month Rakuten, a Japanese internet firm, paid $900m for Viber, founded by Israelis but based in Cyprus. Alibaba, a Chinese online giant, paid $215m for a slice of Tango, another Silicon Valley firm, in March. Tencent, Alibaba’s rival, owns WeChat, which has almost 400m users. It also runs QQ, an older messaging service, and has a stake in Kakao.The South Korean deal means yet another pairing of a broader internet company and a messaging startup. The youngsters seek extra heft—for instance, like Kakao, in marketing. The oldies (if you can call internet firms that) get a trendy mobile product. Daum doubtless hopes that KakaoTalk,...
from The Economist: Business http://ift.tt/1nGBXlP
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