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Daum Communications Sustainability Report 2009

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					                                                       Sustainability Report 2009
Daum Communications
Sustainability Report 2009




Tel_ 1577-3321

                                                       Daum Communications
Seoul Office
Daum Communications Corp.
714, Hannam0dong, Yongsan-gu, Seoul 140-894


Jeju Office
Daum Communications Corp.
Daum Global Media Center
1730-8, Odeung-dong, Jeju city, Jeju Island, 690-150
Daum Communications

Sustainability Report

2009
Foreword
●
This is the first sustainability report of Daum Communications (“Daum”).
The process of publishing this report helped us better understand the
significance of interaction between the company and our stakeholders.
This report has also served as a meaningful reminder of our social
responsibilities as well as the future directions needed towards achieving
sustainable growth for the company.




Reporting Framework
●
This report consists of three parts. Part 1 includes the Corporate Overview,
Stakeholders of Daum and the Materiality Test results. Part 2 reveals
the five core issues which are of high concern to our stakeholders and
also of high impact to Daum, as well as our performances and future
plans regarding these issues. Part 3 contains the GRI G3 indicators. The
Contents page serves as a table showing stakeholder concerns, thus
enhancing the report’s readability.




Reporting Period
●
This Report covers the period from January 1, 2009 to December 31,
2009. While quantitative data is disclosed in a time series analysis of three
years, some reveal data prior to 2009 and for early 2010. The reporting
scope basically centers on the Seoul and Jeju main offices, but some
parts include information of our subsidiary, Daum Service. Dedicated
to communicating with our stakeholders on our economic, social and
environmental performances, we will publish the sustainability report
annually in the future.




For more information
●
Each section of the report provides a link to a Web site, where further
details are available. Inquiries or questions can be directed to the
following:


• Corporate Web site
  http://info.daum.net/DaumEng/
• Tel: +82-2-6718-0603
  Fax: +82-2-6718-0900
  E-mail: sustainability@daumcorp.com
  Address: 714, Hannam-dong, Yongsna-gu, Seoul, Korea
Contents



Part 1. ABOUT Daum
 CHAIRPERSON’s MESSAGE                               04

 CEO’s MESSAGE                                       05

 MISSION, VISION & STRATEGY                          06

 BUSINESS OVERVIEW                                   08

 STAKEHOLDERS OF DAUM                                10

 MATERIALITY TEST                                    12

 STAKEHOLDER ISSUES                                  13

Part 2. Sustainability Core Issues
 1. The value of the Internet                        16

 2. Safe Internet World                              21

 3. Corporate Culture                                25

 4. Relocation to Jeju                               32

 5. Social Contributions                             38
 SPECIAL THEME 2009 Performances & Mobile Strategy   44

Part 3. Daum Sustainability Indicators
 Sustainability Management                           50

 Economic Performance                                51

 Social Performance-Customers (Users)                53

 Social Performances-Advertisers & Channels          54

 Social Performances_Employees                       55

 Social Performances_Suppliers                       56

 Local Community & Next Generation                   58

 Environmental Performances                          60

 Awards / Associations & Memberships                 60

Appendix
 Third Party Assurance Statement                     61

 GRI (G3) Index                                      63

 Publication Information                             65
Daum Communications
Sustainability Report 2009




Core Issues



The table linking high-interest stakeholders with core issues
strengthens the report’s readability.
 NGOs, Civic Groups
 Governments, Competitors,

                             Generations
                             Local Communities & Next


                                                        Suppliers


                                                                    Employees


                                                                                Channels
                                                                                Advertisers & Media


                                                                                                      Customers (users)


                                                                                                                          Shareholders & Investors




                                                                                                                    
                                                                                                                      
                                                                  
                                                                                                                       
                                                                                                                      
                                                                                                                    


                                                                                                                        
                                                                                                                       
                                                                                                    
                                                                                                                         
                                                                                                                        
                                                       
                                                                                                                                                     Daum Code
                                                                                                                                                  ●

                                                                                                                                               Scanning the Daum code on the
                                                                                                                                                     back cover of the report with the
                                                                                                                                                     Daum bar code search application
                                                                                                                                                     will enable you to connect to the
                                                                                                                                                     mobile Internet version of the
                                                                                                                                                     Daum 2009 Sustainability Report.




02
                                      Daum bringing
                                      joyful changes
                                      to the world


                                      Bringing joyful changes to the world

                                      is our corporate mission for the

                                      sustainable future.

                                      Daum is dedicated to creating

Cover Story                           innovative value through the Internet,
●

The graphic image on the front        which will promote a healthy online
cover and overall design of
the report symbolizes diverse         ecosystem, enhance our stakeholders’
messages by combining the
universal items of our daily lives.   satisfaction and protect the
This design is intended to bring
forth different images to viewers     environment.
according to their life stories.
The design also embodies the
                                      We believe that the joyful changes we
company’s vision of bringing joyful
changes to our various customers
                                      bring about will lead us to a sustainable
through close engagement,
going beyond providing mere
technologies and services.
                                      future for the company and the world.


                                                                                  03
Daum Communications
Sustainability Report 2009




                             Dear Stakeholders,


                             In today’s world all businesses face growing calls for sound corporate governance
                             and transparent management. At the same time, the rising awareness of socially
                             responsible investment and growing global concern over climate change and other
                             environmental issues bring increased public attention to the economic, environmental
                             and social responsibilities of companies.


                             Aware that transparent corporate governance was integral to sustainable growth since
                             its inception, Daum has long dedicated itself to the establishment of an enlightened
                             corporate culture that matches global standards. For example, we increased the
                             number of outside directors, who now form the majority of the board and invited
                             foreign outside directors to serve on its Board of Directors.


                             In recent years, we have worked hard to further enhance the board’s independence
                             and transparency. In 2008, the Articles of Incorporation separated the Chairman of the


CHAIRPERSON’S                We grow alongside our
MESSAGE
                             stakeholders
                             Board and the CEO into two, individual positions. In May of 2010, I was chosen from
                             among the outside directors to become Chairman. As Chairman of the Board, I am
                             very proud of our achievements.


                             These ground-breaking achievements have not gone unnoticed, and in 2010 Daum
                             was voted to have the ‘Best Practice’ among KOSDAQ listed companies by the Korean
                             Stock Exchange and the Corporate Governance Service for the third consecutive year.
                             The Board of Directors and I will continue to place the highest priority on protecting
                             the Company’s interests and work to increase shareholder value, while working
                             hand-in-hand with top management in order to realize the Company’s vision for
                             sustainability management.


                             However, none of this could have been achieved without the incredible hard work
                             from the Company’s employees and support shown by its stakeholders. I would like to
                             take this opportunity to express my deepest appreciation.
                             All of us here at Daum promise to tirelessly continue with our endeavors in order to
                             ensure a bright future for Daum and you, our stakeholders.



                             Thank you.


                             Chairman Peter Jackson




04
Part 1. ABOUT Daum




                     Dear stakeholders,


                     The history of Daum dates back to 1995, a time when the Internet was still a new
                     and little known concept. From its humble beginning as a small venture, Daum has
                     successfully grown into Korea’s leading Internet portal company. Beginning with
                     ‘hanmail’ our email service, we have continued to push forward, developing and
                     introducing a diverse range of services, including café, search, Media Daum, tvPot,
                     Road View and mobile services. Currently, approximately 1,000 dedicated employees
                     work tirelessly to ensure all of our 90 services provide users with an exceptional
                     Internet experience. From the very outset, we have remained faithful to Daum’s
                     corporate philosophy of bringing joyful changes to the world. In 2009, we unveiled
                     our new vision “Life On Daum” which is designed to reflect our strong dedication to
                     ensuring that users can enjoy our services and communicate with the world anytime,
                     anywhere via any device. Our efforts so far have all been part of the sustainability
                     management practices that we have performed through close communication with
                     our stakeholders.



                     Bringing joyful changes to the                                                            CEO’S MESSAGE

                     world through sustainability
                     management
                     Dedicated to creating an organized sustainability system by building on our
                     accomplishments to date, we have published our first sustainability report this year.
                     During the course of preparing this report, we identified sustainability core issues
                     through dialogue with our stakeholders. Based on the findings, we will channel our
                     resources into expanding trure values of Internet, which are openness, sharing and
                     participation as well as ensure a safe Internet world, while also pushing forward to
                     complete our relocation to Jeju. We also develop our renowned open corporate
                     culture and collaborate with Internet users in order to make the world a better place.
                     Although this report does not cover our environmental performances as a core issue, it
                     provided us with an opportunity to rethink our role in and impact on the environment.


                     The procedure of publishing this report brought us face-to-face with many challenges
                     and opportunities. All of us here at Daum aim to solidify our sustainability system and
                     strengthen our competences so as to meet these challenges and opportunities. On
                     behalf of everyone at Daum, I humbly ask all of you to continue providing us with your
                     unwavering support and encouragement as we move forward.


                     Thank you.


                     CEO Saehoon Choi


                                                                                                                           05
Daum Communications
Sustainability Report 2009




MISSION


Bringing Joyful                    Daum was established in 1995 under the philosophy “Helping Communications Among People and Between
                                   People and Society.” The name Daum has dual meanings in Korean, “A Creator of the Next Communication
                                   Platform” and “A Company Building Harmony from Diverse Voices.” Its name epitomizes the founding
Changes                            philosophy and future-direction of the company.


to the World                       The Company’s services also carry this spirit. Introduced as Korea’s first free web-based mail service, our Hanmail
                                   service heralded a new era of communications. The Hanmail service provided the platform for Internet users to
                                   share information, opinions and pleasant experiences. Over time, the service evolved into various other services,
                                   such as Café, Media Daum and Blog, thus broadening the scope of experience and creating greater value for all.




“
                                   In a bid to build on this spirit, Daum set its mission as “Daum Bringing Joyful Changes to the World” in 2004.
                                   The new mission represents Daum’s philosophy to give attention to the real world as well as the Internet world
                                   and bring about joyful changes for people and society. As part of this corporate culture, the mission will also bring
Daum is committed to
                                   about changes to the behavior and attitude of our employees. Our first priority when developing new business

creating new values and            ideas is ‘creating new values,’ and ‘bringing joyful changes to the world’ rather than merely achieving profitability
                                   and efficiency.
sharing them with the world
                                   To date, Daum has committed its efforts to creating innovative services and value through unprecedented services
based on the belief that we
                                   such as hanmail and café. That is how we have grown so far and how we will achieve sustainable growth.
can bring joyful changes           Making management decisions and building corporate strategies, services and systems in accordance with our
                                   mission, we will be able to realize sustainable sales and profits. Creating innovative value through the intelligent
to the world through the
                                   utilization of media and communications, we will also consider our social and environmental responsibilities as
intelligent utilization of media   well as economic performances. By doing this, we will be able to generate sustainable value for the world.




                             ”
and communications.
                                      mission                                                                                      Daum,
                                                                                                                               Bringing Joyful
                                                                                                                               Changes to the
                                                                                                                                   World

                                      vision
                                                                                                          Life On Daum




                                               strategy 1                               strategy 2                               strategy 3

                                    Daum stays “on” at all contact         Committed to providing the most             Daum will double its endeavors
                                    points in the ever-evolving digital    popular services that connect people        for the sustainable growth of its
                                    world, allowing users to have          and the world, Daum has created             stakeholders and bringing joyful
                                    easy access to Daum anytime and        a structured contents system that           changes to ensure a sustainable
                                    anywhere.                              provides information closely related to     society.
                                                                           everyday life in a convenient way.



06
Part 1. ABOUT Daum




VISION & STRATEGY


Life                          VISION


                              Daum came up with a new vision “Life On Daum” in 2009. Through any digital device—PC, mobile, Digital View
On                            or IPTV, etc.—customers have easy access to our services, all of which are designed to bring joyful changes to their
                              daily lives. By building an interactive structure of content and providing convenient life information, we will make

Daum                          user’s life converge into Daum in order to realize a happier world. “Life On Daum” represents our vision to realize
                              more convenient and happier communication with the world.




                              Strategies




“
                              ▶▶   Daum is connected to the             In coping with the ever-evolving web ecosystem, Daum will evolve

                              digital world via all contact             from a PC-based online portal service provider to a ubiquitous lifestyle
Daum will remain
                              points, realizing a ubiquitous            provider through all digital devices, including mobile, Digital View and

connected to all contact      world for our customers.                  IPTV for our customers.


points in the ever-changing                                             Based on our accomplishments, Daum aims to create an affluent life
                              ▶▶   Committed to providing
                              the most popular platform for             for everyone by providing them with the most popular platform for
digital world, providing
                              connecting people and the                 happy communications. To that effect, we will develop an innovative
users with easily access to   world, Daum has created a                 “Information DNA Map” to provide structured contents and convenient

                              structured contents system that           life information through our search service and others.
our services and a more
                              provides life information in a




                 ”
valuable life.                convenient way.


                              ▶▶   Daum doubles its endeavors           Daum will strive to improve its inclusiveness by reinforcing its

                              for the sustainable growth of             communications with diverse stakeholders. Based on the outcomes,

                              its stakeholders, bringing joyful         we will be able to identify key sustainability issues and heighten our

                              changes to a sustainable society.         responses in order to improve performance. This is how we bring joyful
                                                                        changes to a sustainable society.




                              Daum’s mission, vision and strategies describe the philosophies, goals and methodologies of Daum in its pursuit
                              of a sustainable world. Through these efforts, Daum will ceaselessly bring about joyful changes to the world.
                              Our stakeholders will be able to meet a ubiquitous world of Daum that will bring joyful changes and help create
                              a better world. These changes will lead Daum to become a sustainable company and help the world achieve a
                              sustainable future.




                                                                                                                                               07
Daum Communications
Sustainability Report 2009




BUSINESS OVERVIEW
                                                 Search                                    Mobile                                    Map
                                                 Daum offers optimal search results        Daum offers a mobile web platform         Ushering in a new era in the online
                                                 that best meet users’ intentions          and a variety of mobile applications      map service with its “Sky View”
                                                 through providing the new unified         for anytime, anywhere access to           and “Road View” services, Daum
                                                 model for search and strengthening        Daum services.                            Map Service integrates these with
                                                 its specialized search services.                                                    such content as traffic, real estate
Internet Portal                                                                                                                      and weather forecasts.




Company that Brings

Joyful Changes to the

World

Founded in 1995, Daum has dedicated
its energies to bringing joyful changes
to the world through fun, imagination,
challenge, advanced technology and
innovation. Having started with Korea’s
first and largest communication service,
Hanmail, we have evolved to provide
even more innovative services, such as
the Community Service which gives voices
to diverse groups of users, Media Service
which provides a venue for interactive
communication, and UCC (user created content)
service which provides a platform for users
to create and consume contents and has
helped realize a user value revolution in
the Internet world. As of the end of 2009,
Daum boasts 38 million subscribers and
760 million daily page views. Daum has
six subsidiaries—Daum Service, Namu
Communications, Pix Korea, Lycos, Daum
                                                 Daum Service                                     Namu Communications
Global Holdings and Twinkle Little Star—
                                                 ●                                                ●
creating synergies in relative business areas.   Daum Service specializes in Internet-based       Founded in 2002, Namu Communications
                                                 operations services. Established in 2007 to      is Korea’s leading Internet-search marketing
                                                 systemize our Daum Web-based operations,         firm, providing marketing strategies
                                                 Daum Service seeks to ensure that superior       optimized for diverse media outlets.
                                                 services are provided to our customers.




08
Part 1. ABOUT Daum




                         Community                                  Hanmail                                    Media                                        Content
                         Daum leads the community culture           Introduced in 1997 as Korea’s              As Korea’s largest news service              In addition to providing lifestyle
                         with Korea’s largest community             first free web-based mail service,         portal, Media Daum provides                  content such as finance, real
                         service “Café,” personal media             Hanmail boasts 38 million                  categorized news articles, sports            estate, movies, books, kids and
                         “Blog,” developers’ blog “T-story”         subscribers and is Korea’s leading         content, online cartoon content              online shopping, our UCC platform
                         and social media based on user             mail service.                              and the Agora—online discussion              services such as tvPot and Miznet
                         participation “View” services.                                                        forum.                                       deliver information and fun to our
                                                                                                                                                            users.




Pix Korea                                        LYCOS                                            Daum Global Holdings                             Twinkle Little Star
●                                                ●                                                ●                                                ●
Became a subsidiary of Daum in 2010, Pix         Having joined as a subsidiary of Daum in         Daum Global Holdings is a holding company        Merged to Daum in 2008, Twinkle Little Star
Korea is a location-based contents provider,     2004, Lycos offers differentiated search         dedicated to supporting our overseas             operates the famous Korean Internet map
bringing new changes to online map by            services through “Lycos50,” as well as web       business and investment activities. Lycos and    service Congnamul.com (http://www.congnamul.
producing Korea’s first high resolution          page and blog services and free webmail          other investees are efficiently and expertly     com).    The company provides interactive
“RoadView” map service.                          service such as Tripod and Angelfire.            managed through Daum Global Holdings.            Internet map service “Congnamul 2.0,”

                                                 ✽Lycos was sold to global IT enterprise Ybrant                                                    Korea’s first satellite image map service, as
                                                  Digital in August 2010.                                                                          well as the ASP map service for corporate
                                                                                                                                                   users.
                                                                                                                                                                                             09
Daum Communications
Sustainability Report 2009




STAKEHOLDERS OF
Daum


Building trust-based
                                                                           Shareholders & Investors
communication with
                                                                           While striving for financial performance, Daum endeavors
                                                                           towards sustainable growth in order to ultimately

stakeholders                                                               enhance its corporate value. Sustainable growth should
                                                                           be grounded on mutual understanding and trust with
                                                                           shareholders and investors. To that end, we maintain
                                                                           communication channels to help our shareholders
                                                                           and investors better understand our sustainability
Daum sees its stakeholders as partners for
                                                                           management practices.
the survival and sustainable development
of the company. We classify our stakeholder
groups into seven groups; shareholders/
investors, customers (users) , advertisers                                                                                            Advertisers & Channels
& channels, employees, suppliers, local
                                                                                                                                      Daum defines our clients (i.e.,     advertisers, media
communities & next generations and
                                                                                                                                      representatives, agencies and their employees)   as its
governmental bodies/competitors/                                                                                                      primary stakeholders. Our advertisement clients
NGOs/civic groups. We maintain diverse                                                                                                vary from large corporations and PR agencies to
                                                                                                                                      self-employed business people. Under the notion
communication channels in order to stay
                                                                                                                                      that their growth is our growth, we strive to
connected with our stakeholders and listen                                                                                            realize client satisfaction.
to their opinions.




                                                                                                           Employees

                                                                                                           People are the most valuable asset to an Internet
                                                                                                           company. In particular, competent people who
                             Customers (Users)                                                             pursue ceaseless innovation with creative ideas
                                                                                                           are the most important stakeholders of Daum.
                             Daum’s customers are not mere users. They are also the
                                                                                                           As we believe that our employees are partners
                             creators of contents, participating in the production of
                                                                                                           who will help make the company grow, we
                             new values and thereby enriching the Internet world.
                                                                                                           make diverse efforts to ensure that all our
                             As a result, the number of visitors grows, which in turn
                                                                                                           employees’ personal visions are in line with the
                             enhances our value as a marketing platform and thereby
                                                                                                           corporate vision.
                             contributing to the sustainable growth of the company.
                             Therefore, we are at the forefront of spreading the
                             principles of open communication and engagement so
                             as to earn customers’ trust and support.




10
Part 1. ABOUT Daum




                                                       Suppliers                                                              Stakeholder Communication Channels


                                                       Win-win partnership with suppliers nourishes growth,       Shareholders & • General shareholders’ meetings
                                                       enabling quality service in various areas. Therefore,      Investors      • IR Roadshows

                                                       we have begun our endeavors to build a “win-win                              • Quarterly earnings release
                                                                                                                                    • One-on-one meetings
                                                       partnership” with our suppliers based on transparent and
                                                                                                                                    • Public disclosure
                                                       trust-based transactions with them. Dedicated to open
                                                                                                                                    • IR page on our Web site
                                                       communication, we also work hard to grow and prosper
                                                                                                                                    • Analyst satisfaction survey
                                                       along with SME Internet companies.
                                                                                                                                    • Analyst Day


                                                                                                                  Customers         • Open Users Committee
                                                                                                                  (users)           • Customer Service Center (24/7/365 call-
                                                                                                                                     answering service)
                                                                                                                                    • Happy Call
                                                                                                                                    • User visits at their convenience
                                                                                                                                    • External user satisfaction survey (quarterly)
   Local communities ∙ Next generations
                                                                                                                                    • Internal user satisfaction survey
                                                                                                                                    • Counseling satisfaction survey
   Daum operates an Internet portal business which has
   had a considerable impact on society. Vigilant to the                                                          Advertisers &     • Rep Assistant Program
   responsibilities brought about by this influence, we                                                           Channels          • Open Advisory Committee
   are involved in diverse social contribution initiatives. In                                                                      • Quarterly Customer Satisfaction Index (CSI)
   addition to our employees’ and users’ participation in
   community programs, contributions to local community                                                           Employees         • Personnel Committee
   programs in Jeju and programs for our next generation,                                                                           • Intranet (Doodle board, Helpdesk, suggestions)
   we aim to develop more community programs through                                                                                • Hotline

   active communication with beneficiaries, NGOs and civic                                                                          • Employee satisfaction survey

   groups.
                                                                                                                  Suppliers         • Hotlines to report unethical purchase
                                                                                                                                     practice
                                                                                                                                    • Suggestion board for suppliers
                                                                                                                                    • Best Suppliers Workshop


                                                                                                                  Local             • Social contributions programs
                                                                                                                  Communities       • Jeju University Industrial-Academic Advisory
                                                                                                                  & Next             Committee
                                                                                                                  Generations       • Global Media Center (GMC) visit programs
                                                                                                                                    • Daum Foundation


                                                                                                                  Governments,      • Korea Internet Corporations Association
                                                                                                                  Competitors,      • Korea Internet Self-governance
                                                       Governments ∙ Competitors ∙ NGOs ∙ Civic
                                                                                                                  NGOs, Civic        Organization
                                                       Groups
                                                                                                                  Groups            • Protection of Privacy Council (PPC)
                                                                                                                                    • Korea Internet Development Council
                                                       Daum believes that active communication and
                                                                                                                                    • Copyright Win-Win Partnership Council
                                                       close collaborations with these stakeholders can                             • National DB Forum and other governmental
                                                       bring joyful changes to the world. We will continue                           and civil organizations
                                                       discussions on core sustainability issues and strive to
                                                       improve our management practices.




                                                                                                                                                                                      11
Daum Communications
Sustainability Report 2009




MATERIALITY TEST


Listening to the                                                        Daum operated a materiality test to reflect stakeholders’ opinions in our sustainability management practices. The
                                                                        test focused on discovering major issues and how these affected our internal and external stakeholders as well as
                                                                        prioritizing their business impact. Before pooling the issues, we first undertook to get a good grasp of details of
opinions of diverse                                                     the status quo of the management as well as conducted an extensive analysis on the current CSR practices against
                                                                        the ISO26000* and KSI*. Following this we performed a media analysis, benchmarked global best practices and
                                                                        conducted a qualitative study on stakeholders. In the course of materiality test, we had valuable opportunities
stakeholders                                                            to sit down with various stakeholders and listen to their opinions in person. All the issues selected through the
                                                                        materiality test will be fully reflected in our future sustainability management activities.


                                                                        Materiality Test Process

                                                                        Step 1                                                                 Step 2                                                              Step 3
                                                                        Making issue pool                                                      Selecting key issues                                                Materiality test

                                                                        • Review of management practices                                       • Relevancy Assessment                                              • Listing key sustainability issues
                                                                        • Sustainability management analysis                                      ∙ Impact on short-term financial                                  through materiality test
                                                                        • Benchmarking global best practices                                      performances
                                                                        • Media Analysis                                                          ∙ Relevance to Daum’s strategies
                                                                          (Reviewing 1,838 media coverage over                                    ∙ Competitors’ response
                                                                          three years from Jan. 2007 to Dec. 2009)
✽An international CSR standards set forth by the International                                                                                    ∙ Stakeholder behavior and interest
 Standards Organization (ISO). It provides guidelines on seven          • Qualitative survey (interview)                                          ∙ Social norms
 major issues; environment, governance, fair practice, human              (Extensive interviews with eight
 rights, labor practice, consumer rights and community                    representatives from each stakeholder
                                                                          group; employees, users, shareholders,                               • Impact Assessment
 engagement.
✽Sustainability index developed by the Korea Standard                     advertisers, suppliers and experts)                                     External environmental issues:
 Association (KSA)                                                      • Quantitative survey on 599                                              Positioning
                                                                          respondents (interest assessment)                                       Daum impact: Fit
                                                                                                                                                  Internal competences: VRIO


Materiality Test Results

Through the materiality test process, we have identified the following sustainability
issues in regards to high stakeholder concerns and business impact: promoting                                                                                                                                                                          ●Mobile

an “open access” and engagement spirit; Internet neutrality in proportion to
                                                                                                                                                                                               ❶                                     Increased materiality
its growing influence as a media portal; sound web ecosystem; user diversity;
information security; rising customer demands; user rights protection; freedom
of expression; social contributions. In review of these findings, we identified five                                                                                ❷
                                                                                                           Stakeholder concerns (%)




                                                                                                                                                                                                                     ●Expanded role of media
core issues and structured the report around them; they are the value of the                                                                                                                                                  ●Promoting open access and engagement spirit

                                                                                                                                                                                                               ●Win-win partnership
Internet, safe Internet world, relocation to Jeju Island, corporate culture and social                                                                                                                              ●Information security
                                                                                                                                                                                                                                                 ●User diversity
                                                                                                                                                                                                      ●Sound Internet ecosystem
contributions. The Sustainability Indicator (p.49) section puts in perspective our                                                       ❸                                                                  ● ●Public welfare
                                                                                                                                                                                          User rights protection
                                                                                                                                                                                                                                          ●Providing convenience
                                                                                                                                                                                                                                       ●Growing customer needs
                                                                                                                                                                                                                    Infrastructure     ●Social contributions
performances regarding other issues, while a Special Theme (p.44) page details our                                                                                                                                              ●Freedom of expression
                                                                                                                                                                                                                   ●Intensive competition / Growing needs for differentiation
                                                                                                                                                                                                                               ●Information accessibility    ●
mobile strategy, an area which our stakeholders showed high interest in.                                                                                                         ●Growing
                                                                                                                                                                                                   ●Personal information
                                                                                                                                                                                                     protection
                                                                                                                                                                                                                                                             Forming sound
                                                                                                                                                                                                                                                              public opinion
                                                                                                                                                                                    importance of suppliers
                                                                                                                                                                                                              ●Growing importance of employees

                                                                                                                                      ●Environmental pollution, climate change                                            ●               ●Local communities
                                                                                                                                                                                   ●Strengthened Internet regulations     Providing opportunities for marketing communications

                                                                                                                                           ●Widening disparity in     ●Energy conservation
                                                                                                                                             wealth
                                                                 ● Issues that have influence on Daum
                                                                 ● Issues that are influenced by Daum
                                                                                                                                                                                           Business impact (%)

12
Part 1. ABOUT Daum




STAKEHOLDER ISSUES




Performances & Plans by Stakeholder Group

Stakeholder           2009 Performance                                                            2010 Plans
Shareholders &        • IR road shows (3 times in Korea, 2 times overseas)                        • Increasing the IR Road Shows (more than 4 times in Korea and 3~4 times overseas)
Investors             • Analyst Day (annually)                                                    • Increasing the Analyst Day (twice a year)
Customers (users)     • Initiated a project to reduce inquiries                                   • Increasing user participation and improving service quality through boosting the activities of the Open
                      • Upgraded FAQ function                                                      Users Committee
                      • Constructed a system that filters harmful content                         • Reinforcing competences for customized services, mobile CS responses and global standard customer
                      • Improving Committee regulations for better protection of user rights       services
                      • Debated on Daum’s principles for handling postings                        • Introduce a system in which employees can efficiently survey user responses and reflect the results in
                      • Took suggestions for service renovation                                    service innovation
Advertisers &         • Proposed the CCDW (Client-Centric Daum’s Way) project                     • Expanding the Rep Assistant Program into agencies (Agency Assistant Program)
Channels              • Introduced Rep Assistant Program                                          • Reducing stakeholder inconvenience by opening business infrastructures (platform)
                      • Operated the Open Advisory Committee                                      • Developing and launching advertising products such as mobile sponsor, etc.
                                                                                                  • CCDW branding
                                                                                                  • Setting customer-oriented vision, engaging in reorganization programs, inspection process, execution &
                                                                                                   maintenance of CCDW TO-DO LIST by core issues
                                                                                                  • Customer-oriented innovation in sales promotion by adopting the Promotion Funding Programs
Employees             • Initiatives for sound corporate culture                                   • Sharing the mission∙vision and developing services based on the mission & vision by focusing on spreading
                      -Improved suggestion & rewarding programs                                    the “On” culture
                      -Listened to suggestions before installing an in-house library              • Making and implementing ideas for sharing and recording the history of Daum
                                                                                                  • 2010 Employee Satisfaction Survey (GWP survey by Fortune Korea/GWP Korea): result analysis and issue review
                                                                                                   are slated for the end of October
Suppliers             • Conducted supplier workshop in Jeju (Dec. 2009)                           • Hotline for reporting unethical purchase practices
                      • Operated a hotline for reporting unethical purchase practices (no cases   • Improving the suggestion system so as to diversify suggested items
                       reported)                                                                  • Receiving suppliers’ complaints on a constant basis and disclosing real-time improvement results
                      • Purchase is basically made through biddings but some exceptional
                       items were purchased on preferred biddings.
Local Communities ∙   • Constructed the 4th Hopeful Global Village of Daum in Vietnam             • Internal communication space
Next Generation       • Launched OllyBolly Online Picture Book (Cultural Diversity Project)       • Environmental campaigns
                      • Launched Internet Dolharbang (Make a Wish Online)                         • Building the 5th Hopeful Global Village of Daum in Sri Lanka
                      • Daum Track in Jeju University (industrial-academic collaboration)         • Sponsoring cultural diversity programs
                      • Daum GMC visit program
                      • Hosted the “Clean Information Society Quiz Contest”
Government ∙          • Collected opinions and discussing on policies to improve the regulatory   • Political activities for the renaissance of the Internet business and expanding industry-wide joint projects
Competitors, NGO ∙     environment                                                                • Reducing user rights violations and securing a stable business infrastructure through rational self-
Civic Groups          • Self-regulated balance between user rights protection and freedom of       regulations
                       expression                                                                 • Realizing a dynamic web ecosystem for users and the company
                      • Various policies by council



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Sustainability Report 2009




              The value of the Internet
           Expanding true values of the Internet through
                                                               Sustainability
                            its services


                                                             We communicated with various stakeholder groups on

                                                             the “external impact on Daum” and “Daum’s influence

                                                             on the society” and learnt about issues of high interest

                                                             to our stakeholders and what influence Daum was

                                                             making on our stakeholders.            From this, we

                                                             selected the core issues regarding high stakeholder

                                                             concerns and the business impact on Daum.            

                                                             We then constructed the report around five core

                                                             sustainability issues: the value of the Internet, safe
                   Safe Internet World
          Creating a carefree online environment for users




14
Part 2. Sustainability Core Issues




                                                                      Corporate Culture
                                                             Building the Original Corporate Culture of Daum
                                                                        through Creative Thinking



 Core Issues
 Internet world, corporate culture, relocation to Jeju

 Island and social contributions.        In reflection of

 our past accomplishments and stakeholders’ opinions,

 we will push forward with our endeavors towards

 sustainability management.              The following
                                                                      Relocation to Jeju
                                                              Taking another leap into a new phase in Jeju

 chapters report on our initiatives, performances and

 future plans regarding these core sustainability issues.




                                                                    Social Contributions
                                                              Working for the public good in order to bring
                                                                     joyful changes to the world




                                                                                                               15
Daum Communications
Sustainability Report 2009




                             1   The value
                                 of the
                                 Internet
                                 Expanding true values of the Internet through its services



                                 The introduction of Web 2.0 led the web                Daum
                                 ecosystem to evolve in a direction, one that           Open Users’ Committee
                                 increases the importance of the true values
                                                                                        Comprised of experts in different areas and advocates
                                 of the Internet, which are openness, sharing           for civil rights, Daum Open Users’ Committee
                                 and participation. Users were given the ability        functions as a direct communication channel with
                                                                                        our users in reflection of our “User First” principle.
                                 to interact or collaborate with each other as
                                                                                        With the first class launched in 2006, 13 committee
                                 creators of user-generated content. Daum serves        members are now active in 2010. As a voice

                                 as a facilitator of this new trend, and remains        representing user rights, the Committee monitors the
                                                                                        services of Daum, the neutrality of its media service,
                                 dedicated to the qualities of openness, sharing        compliance with editorial bylaws and fulfillment of its
                                 and participation. With a focus on building a          social responsibilities. Capitalizing on their profound
                                                                                        expertise, these members also review service and
                                 sound web ecosystem and offering a platform
                                                                                        media performances and suggest improvements and
                                 for communication and engagement among                 involve in user rights protection activities.
                                 users, we will lead this dynamic change in the
                                 virtual community. These changes in the web
                                 ecosystem as well as creative communications                                    Activities

                                 among users will enhance their quality of life
                                                                                        ●Regular Meetings & Workshops
                                 and propel us towards sustainable growth.                ∙ Bimonthly meetings
                                 Remaining faithful to the fairness and neutrality        ∙ Reporting and discussion on status quo/ improvement/
                                                                                           issues regarding the operation of Media Daum
                                 principles of the media, we work to protect user
                                                                                          ∙ Ad-hoc committees in the event of issues
                                 rights and fulfill our responsibilities as a leading
                                 Internet media company. Daum will spare no             ●Contributions to columns
                                                                                          ∙ Regular columns on social issues regarding portals
                                 efforts in realizing the true value of the Internet
                                                                                          ∙ Ombudsman Column on Daum service
                                 through its services.


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Part 2. Sustainability Core Issues




Creating a sound                                                                What is the definition of “Openness and sharing” by Daum and what is the objective?
web ecosystem                                                                   In the beginning, the Internet service was mostly concentrated on providing users with access to
                                                                a vast pool of knowledge and information that had normally been beyond access. With the advent of Web
with openness
                                                                2.0, however, the digital world evolved into a platform for users to create content, giving birth to a new term,
                                                                “prosumer”. In step with this trend, Daum focuses on providing an open platform in which various users can
                                                                produce, consume and share content and communicate with each other. All of the Daum services, such as Café,
                                                                Blog, Media and tvPot, operate based on the philosophy of openness and sharing. We aim to build a sound web
                                                                ecosystem and lifestyle platform that brings joyful changes to our society.



                                                                                Daum Open API* is the representative initiative of Daum to promote openness. How
                                                                                is it implemented?
✽Open API (Application Programming Interface): An open                          An open application programming interface* is literally open to everyone, realizing the true meaning
 interface that enables Web sites to interact with each other   of the Internet’s openness. Daum proactively supports the development activities of various fun and creative

✽Daum Open API: an open interface that enables Daum’s
                                                                services and applications with open and access-to-all sources and data platforms, such as search, map and blog.
 data platforms such as search, map and blog to interact with   Since 2006, the use of Daum Open API has grown 300% every year. In addition, 5% of all Daum’s search queries
 other Web sites to create an open web ecosystem
                                                                are sourced from Open API-based Web sites. For instance, Daum’s “map” Open API is used at 1,500 Web sites per
                                                                month on average. With a free access to all, the Widget Bank enables the Widget to operate on the blog services
                                                                and home pages of other Internet companies. A total of 550 widgets were registered between September 2008
                                                                and the end of 2009. The accumulated number of users reached 5.5 million as of the end of 2009.



                                                                                What is your policy for open communications with API developers and your support
                                                                                program for them?
                                                                                Daum runs “DevDay” and a “Mash Up* Contest” as a communication channel with open API
                                                                developers in order to create an open web ecosystem. The Daum Developers Conference (DDC) and the Open
                                                                Knowledge Insight (OKI), a conference on future knowledge trends, provides a venue for open technological
                                                                exchange and communications. In support of developers, Daum also provides hosting and mirroring* services.
                                                                SME ventures and individual developers can use Daum’s Open API services and data to create their own services.
                                                                Our partner developers can make profits by developing services compatible with our service platforms, which also
                                                                benefits our customers as it provides convenient access to Daum services. Furthermore, we also offer internship
                                                                programs and mentoring services to developers. Established in 2007, the “Daum Track” is the industry’s first
                                                                industrial-academic collaboration, and is being conducted with the Computer Engineering Department of Jeju
                                                                University.




                                                                Policy for open communications with API developers and your support program
✽Mashup: creating new software, services and DB by
 integrating web-based information and services                 Program           Period           No. of Participants                  Participants          Objectives            Expected Benefits
                                                                DevDay        3~4 times/year       40~80 persons on                 Anyone interested in   Promoting the use    •   Inducing interest for
✽Mirroring service: copying and backing-up of server                          (totaling 10 events
                                                                                                  average                           Open API and Mash Up   of open source and    Open API and ensuring
 contents to provide the same contents to users in the event                  since 2007)
                                                                                                                                                           the development       third-party applications
 of server errors
                                                                Mash Up       Annually             Around 300 persons                                      of communications    •   Selecting and hiring
                                                                              (totaling 4 events   (Participation is on the rise,
✽Daum Track: an industrial-academic collaboration program       Contest                                                                                    among users and       competent developers
                                                                              since 2007)          except for the 2010, when
 that Daum established at the Computer Engineering                                                 the event was downgraded                                developers of open
 Department of Jeju University to nurture local IT talent                                          due to the H1N1 flu
                                                                                                   epidemic)
                                                                                                                                                           source
  (see page 35 for details)




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Daum Communications
Sustainability Report 2009




                                            Introduce Daum’s external initiatives for open access.
                                            In 2008, Daum became the first portal site in Korea to participate in the “Google Open Social”
                             initiative, making our Web sites compatible with others. “Google Open Social” is an open platform for users
                             and developers, including the world’s renowned Web sites such as MySpace and Orkut. Contents produced
                             on this platform are compatible with all other open social-based Web sites. As a result, developers can provide
                             the same single content to many different Web sites. As a leader in creating an open web environment, we
                             aggressively promote open sourcing activities. For instance, we donate a certain portion of the proceeds from our
                             strategic partnership with the Mozilla Foundation that we entered in June 2009. Mozilla (www.mozilla.com) is a global
                             community that leads an open web environment by producing open-sourced software products and technologies.
                             In addition, we also unveiled the open-sourced “Daum Editor” service that was verified at our Café, blog and
                             Hanmail services. This new service helps web service developers and SMEs to reduce the costs of developing new
                             editor programs.




Providing Platforms                         What are Daum’s philosophies and initiatives regarding communication and
for Communication                           engagement?
and Engagement                              The changing Internet environment and growing user engagement gave birth to an interactive
                             communication culture and the innovative concept of “prosumers” who create and consume new content and
                             information. Heralding this new trend was Daum’s Agora service, an online forum at which more than 7,000
                             new postings are updated every day. Agora’s innovative functions, such as recommendation, comments, petition
                             and funding, as well as postings, provide users with various innovative online communications experiences.
                             For instance, our users funded the cost of an advertisement in the Washington Post to disprove Japan’s claim
                             regarding Dokdo Island. In addition, they also awarded their own gold medal to a misfortunate Olympic athlete.


                                            Daum’s Agora never fall asleep, 24 hours a day and seven days a week, users can discuss major
                             social issues. However, some immature debates raised concerns over the adverse effects of the Internet. Therefore,
                             in a bid to establish a desirable Agora culture, Daum takes a tough line on malicious comments and restricts users
                             making repetitive recommendations or disapprovals from the same IP address. Furthermore, many Agora users
                             have volunteered to self-regulate content.


                                            Meanwhile, our other service, VIEW*, has approximately 160,000 bloggers registered as of the end
                             of 2009, leading a new social media culture. With nearly 20,000 contributions sent in every day, the VIEW service
                             has established itself as Korea’s leading metablog service, whereby users produce, distribute and edit information
                             and content. The patented “Open Editorial” system of the VIEW service analyzes the evaluation records of users,
                             giving an objective perspective to the information value of user-created content. The VIEW Ad Box is a mutually
                             beneficial service for both Daum and our users as it distributes part of the ad proceeds to VIEW bloggers.


                                            The tvPot service is a leading user created content (UCC) platform, recording 25,000 video postings
                             per day. The service provides free editorial tools and platforms for searching and editing movie clips, enabling
                             users to produce contents freely. In dealing with the concerns of copyright infringement, Daum entered into an
                             agreement with three groups claiming music copyrights, including the Korea Music Copyright Association (KMCA)
                             in October 2009, allowing our users to freely use BGM for their UCCs.

                             ✽VIEW: a blogger news service, whereby users contribute their blog articles for public consumption

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Part 2. Sustainability Core Issues




                                                                        Tell us about your Digital Inclusion initiatives?
                                                                        Carrying on with the principle of “Open Access” to the Internet, Daum has worked hard since 2006
                                                          to improve accessibility for digitally-challenged people. In April 2007, we conducted a usability test for the visually-
                                                          challenged in cooperation with the Korea Welfare Foundation for the Visually Handicapped and the Jeju Institute
                                                          for the Blind, learning about the inconveniences of our membership process and contents accessibility as well as
                                                          accessibility to web editors.
                                                                        In dealing with these issues, we developed guidelines regarding web accessibility, designated staff in
                                                          charge of web accessibility at each division and added web accessibility to our service development algorism. At
                                                          the same time, we conducted training sessions and campaigns to bring our employees’ and users’ attention to
                                                          web accessibility. As a result, we improved the web accessibility of our new launch “Hanmail Express” for visually-
                                                          challenged users.
  ✽Bringing a new wave of mail service, Hanmail Express
   Campaign
                                                                        In recognition of our efforts, Daum was selected as an exemplary site in the practice of enhancing
                                                          web accessibility in 2008 by the Human Rights Forum of Persons with Disability in Korea. In 2009, Daum ranked
                                                          in the top five from 1,100 sites for its excellent web accessibility. In the future, we will continue our endeavors
                                                          towards digital inclusion through consistent R&D activities and close collaboration with users.




Fair and Neutral                                                        What is the role of Daum as a media, and Media Daum’s contribution to promoting
Media Service                                                           the value of the Internet?
                                                                        The advancement of portal news services provided users with faster and more accurate access to a
                                                          wide variety of news sources on the Internet than ever before. In addition to breaking news on hot issues, the full
                                                          text of well-informed news articles are now just one click away. Just a couple of key words are all you need to get
                                                          access to news coverage on a real time basis, while users can also post online comments to express their opinions.
                                                          Not satisfied with this interactive communication, users are now also the producers of news. Media Daum
                                                          provides Agora and VIEW services, whereby users can create content. Leading the paradigm shift in the digital
                                                          media landscape, these services promote open communication and user engagement.


                                                                        What are your principles and guidelines
                                                                                                                                   Daum
                                                                        as an Internet media?
                                                                                                                                   news editorial bylaws
                                                                        “Media Daum” is Daum’s news media service
                                                          boasting more than 10 million weekly unique visitors. As                 ① Quick and various information
                                                          Korea’s leading online news media, relaying 18,000 news                  ② Useful and righteous information
                                                          articles from 70 mass media, fairness and neutrality are                 ③ Promotion of open communication
                                                          imperative to our sustainability as a news media that provides           ④ Political neutrality
                                                          a communication platform enabling user engagement. To that               ⑤ Care for minorities
                                                          end, we have brought forth the following eight conditions as             ⑥ Non-violation of human personality,
                                                          our news editorial bylaws:                                                  honor and portrait rights
                                                                                                                                   ⑦ Realization of interactive editorial
                                                                                                                                   ⑧ Operation of Editorial Board




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Daum Communications
Sustainability Report 2009




                                          Furthermore, we launched the “Open Users’ Committee” as an external monitoring advisory body
                             of our Internet Neutrality practice. Comprised of 13 experts and user representatives from different fields, the
                             committee launched the 4th executive board in 2010. In May 2009, we innovatively adopted the “News Box
                             History Service,” which logs the editorial history of news posted on the front page of our Web site, thus further
                             enhancing the reliability of our services. This service exceeds the obligation of recording and categorizing news
                             imposed on Internet news service providers under the new Newspaper Act in July 2009.




                                          Q. With the growing influence of Internet portals, people are calling on them to
                                          show more social responsibility. What is your response to this call?
                                          Daum puts in place various systems and mechanisms to protect users’ rights in the rapidly- and
                             vastly-spreading information service. Besides our Customer Center, where customers can report complaints
                             or petitions of infringed rights, our Swift Response System includes a separate “24 hour News Center” for an
                             instant response to emergency issues regarding incorrect information, libel, disclosure of personal information
                             and copyright infringements. The January 2009 revision to the Act on Press Arbitration and Remedies, regarding
                             damage caused by press reports entitled Internet news services to arbitration and settlement. Following the
                             revision to the Public Official Election Act which reclassified the Internet news service as Internet press, back-to-
                             back revisions to the Newspaper Act and Press Arbitration Act articulated the legal liabilities of Internet news
                             services to news media. Daum faithfully fulfill the obligations imposed by these acts.




User Rights                               Q. User rights protection grows ever important. What is Daum doing to protect
Protection                                users’ rights?
                                          As Korea’s leading portal service provider, Daum upholds and complies with all local laws and
                             regulations. With a clear knowledge of the historical and social backgrounds of the current law systems, we make
                             relentless efforts to protect users from any adverse effects of the Internet. Furthermore, we are actively involved in
                             numerous collaborative initiatives by the public and private sectors to improve domestic Internet regulations and
                             frameworks based on social consent.


                                          Another major concern of Daum is the users’ rights to free and convenient access to the Internet.
                             The characteristically borderless Internet gave birth to the social disputes regarding the binding force of Korean
                             laws over Internet services provided by multi-national corporations. It also gave rise to concerns that domestic
                             Internet regulations regarding libel and slander run counter to global standards. These voices of concern pointed
                             out that the regulations quell freedom of expression and other users’ rights. Some Korean users even fled these
                             regulations, opting for so called “cyber exile.” In consideration of the borderless Internet, the world chose
                             voluntary self-regulations by civic groups and industrial sector over compulsory government regulations so as
                             to protect user rights and prevent infringement. On the domestic front, the Korea Internet Self-governance
                             Organization (KISO) was launched in March 2009, and is comprised of seven portal companies. As a member of this
                             organization, Daum strives to strike the right balance between reducing damage to users’ rights and the freedom
                             of expression through self-regulation in the event of the circulation of illegal and harmful information.


                                          In the web ecosystem, creative and different services know no nationality. Timely and proper
                             amendment and improvement to legal systems in step with the speed of evolution in Internet technologies and
                             services is expected to further enrich the Internet World.


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Part 2. Sustainability Core Issues




                     2              Safe
                                                                                     Prevention and Response to Failures

                                                                                     As the influence of the Internet on our society




                                Internet
                                                                                     and individual life grows, so does the damage of
                                                                                     cyber attacks. And to this, Daum is no exception.
                                                                                     We have been exposed to several risks in recent




                                  World
                                                                                     years: personal information leakage due to a
                                                                                     failure of the Hanmail service; dysfunction in the
                                                                                     connection to the T’Story service due to a DDoS
                                                                                     attack; and the hacking of our call center system.
                                                                                     In particular, the July 7th DDoS attack in 2009
               Creating a carefree online environment for users                      reminded us of the need to tighten our security
                                                                                     system and gave us the opportunity to reflect on
                                                                                     our social responsibilities and duties as Korea’s
                                                                                     leading Internet portal service provider.
                                     Following the advance of IT technologies,
                                     the Internet now plays a major part in our
                                     daily lives. Adverse effects of the Internet,   A Company-wide Emergency System to Handle
                                     such as service dysfunction or failure,         Failures
                                     hacking, information leakage, circulation       In order to prevent service failures or blackouts in our
                                                                                     system and subsequent problems, Daum established a Risk
                                     of harmful contents and the infringement
                                                                                     Management System in 2008 in order to prevent and respond
                                     of copyrights disturb the social order.
                                                                                     to failures in our systems. In the event of any failures despite
                                     Furthermore, the infringement on
                                                                                     our air-tight control, we mobilize the emergency response
                                     customers’ rights poses a formidable
                                                                                     process to deal with such problems and minimize and
                                     threat to the sustainability of Daum.
                                                                                     restore any damage. Any failures in the system are instantly
                                     Therefore, Daum has put in place a strict
                                                                                     reported to the Chief Officers who are in charge of services
                                     security system and operates a year-round
                                                                                     and technology. These officers take control and make swift
                                     monitoring system in order to protect our
                                                                                     and proper decisions in order to fix any damage. Notification
                                     customer’s values and their information.
                                                                                     of any such failure is also given to the Emergency TFT in
                                     As part of our prevention measures, we
                                                                                     order for them to restore the system as quickly as possible.
                                     train our employees and engage in various
                                                                                     Consisting of the Chief Officer in charge of service—as leader,
                                     campaigns to raise public awareness of
                                                                                     the Chief Officer in charge of technology, the Director and
                                     a safer Internet environment. Dedicated
                                                                                     Team Manager of the Corporate Communication Division,
                                     to protecting our next generations from
                                                                                     Customer Service Team Manager, External Cooperation
                                     harmful content, we work on various             Team Manager and the Director of the relative division, the
                                     systems and whistle-blowing programs,           Emergency TFT facilitates the speedy and accurate process
                                     while simultaneously training our               of reporting and responding to any failures as well as any
                                     employees to help them remain vigilant to       external communications about the problem.
                                     any harmful content.


                                                                                                                                                  21
Daum Communications
Sustainability Report 2009




                                                                Information Security

Upgrading the Failure Prevention                                Daum pulls out all the stops to protect customer information. In compliance with
Activities                                                      stipulations regarding personal information security in accordance with “the Act on
The best tactic to deal with failure is preemptive              Promotion of Information and Communications Network Utilization and Information
prevention. Therefore, we run in-house pre-opening              Protection, Etc.” and the “Personal Information Security Directive” stipulated by the
trials of all new services prior to their official launch and   Korea Communications Commission (KCC), we also have several protocols and systems in
conduct various quality assurance (QA) tests to ensure          place to protect our customers’ information.
the stable operation of services. Task force teams are
organized to test operations and review the system              International Certification of Information
                                                                                                                           Domestic and International Certifications
algorithm, as well as run cross-checks to sift out even         Security                                                   Held by Daum
                                                                Daum already acquired the domestic Information                           Year Description                    Authority
the slightest possibility of error or any mistake in the
                                                                                                                           Domestic      2006 Information Security           Korea
development stage. In order to enhance our service              Security Management System (ISMS) as early as 2006.                           Management System              Internet
                                                                                                                                              (ISMS) certification           & Security
stability, we recently reformed our Hanmail log-in system       We also obtained the international certification,
                                                                                                                           International 2006 ISO 27001 certification:       Agency
and service failure monitoring system and innovated the         ISO 27001 in 2006. In 2009, we expanded the                                   Operation of                   DNV Korea
                                                                                                                                              infrastructure for
technology quality assessment system.                           scope of the certification to the product & service                           Internet service
                                                                development stages and obtained legitimate                               2009 ISO 27001 certification:
In addition, a 24-hour failure monitoring system ensures
                                                                                                                                              Expanded the scope
the quality of services in operation. Furthermore, we           certifications from domestic and international                                of certification to the
                                                                                                                                              development stage
have also prepared internal case-study programs                 authorities. The ISO 27001 certification entails an

and support teams to prevent any reoccurrence of                exacting and difficult evaluation process on 133           Customer Information Security
                                                                                                                           Organization Chart
past failures. Starting in 2010, we refined our failure-        items in 11 sections, including risk management,

detecting protocols by segmenting the database into             security policies and asset classification. As a result,                           Information
                                                                                                                                                     Security
unsuccessful, successful and unsolved cases as well as          acquisition of the certification attests to the global                              Committee

created a checklist. This company-wide service failure          standards infrastructure and development process of
                                                                                                                                   Information
                                                                Daum’s Internet service. We maintain the certification           Security Advisory
track-recording system has improved the accessibility to                                                                              Group

anyone for review or reference. We will also apply this         through surveillance audits twice a year.
                                                                                                                                    Corporate                        Personal
system to our developer training programs.                                                                                         Information                     Information
                                                                                                                                  Security Team                   Security Team


                                                                                                                           Advisory Group Members
                                                                                                                           Seo, Seung-woo (professor, Seoul National University)
                                                                                                                           Academic expert in information security technologies and
                                                                                                                           research
                                                                                                                           Lee, Hyeong-gyu (professor, Hanyang University)
                                                                                                                           Legal expert in information security practice in academia
                                                                                                                           Shin, Soo-jeong (CEO, Infosec)
                                                                                                                           CEO of a domestic information security service company
                                                                                                                           Gu, Tae-eon (Lawyer, Law Firm Kim & Chang)
                                                                                                                           Legal expert in information security practices in legal circles
                                                                                                                           Jin, Seung-heon (ETRI Team manager)
                                                                                                                           Expert in information security technology research at public
                                                                                                                           organizations
                                                                                                                           Seong, Jae-mo (Director, Financial Security Agency)
                                                                                                                           Expert in information security technology research in the
                                                                                                                           financial sector
                                                                                                                           Lee, Jae-il (Director, Korea Information Security Agency)
                                                                                                                           Manager at the domestic information security policy-
                                                                                                                           making agency




22
Part 2. Sustainability Core Issues




                                                             Customer Protection

                                                             Committed to minimizing adverse effects of the Internet, such as malicious replies,
                                                             copy right infringement, libel, and harmful content, Daum operates the Clean Center
                                                             24 hours a day, 365 days a year as well as implements numerous diverse programs
                                                             to protect teenagers from harmful contents. In 2009, we expanded one-time Clean
                                                             Internet Campaign to year-round campaign in order to ensure a clean Internet world.



Customer Information Security Policy                         24 Hour Clean Center
In addition to the global standard information security      Daum’s Clean Center constantly monitors all content     Customer Protection Monitoring System
system, Daum implements several systems to prevent the       posted on our Web site in the form of video clips,
loss, hacking, leakage, forgery or damage of customer        pictures, postings, replies, community, and search                                    Clean Center

information. In reflection of the CEO’s determination        engines. Based on government regulations and                                      screens all postings
                                                                                                                                                  for malicious
regarding information security, we developed information     our internal principles regarding bulletin board                                       writings

security bylaws consisting of 17 guidelines in five areas.   management, the Center uses a spam pattern
                                                                                                                                                                          Infringement
                                                                                                                             Clean Café                                   Report Center
In preparation of hacking attacks, hacking detection and     filtering system to screen out harmful content by
                                                                                                                         screens postings on the                          deals with reports
insulation systems are in place to control and monitor       insulating or filtering spam keywords or prohibited         community café service                           regarding libel or
                                                                                                                                 boards                                       copyright
traffic at our Web site. In addition to this we recently     URLs. Users can also report unethical postings and                                                             infringement
                                                                                                                                                Round-the-
added the DDoS countering system. Meanwhile, the             replies with a single click. The Center monitors                                clock news center
DB audit solution and information leakage prevention         content reported by users and related agencies. In                               in charge of the instant
                                                                                                                                             handling of press remedies
solution prevents any leakage of important information.      addition to filtering text content, we have developed                            within the Media Daum
                                                                                                                                                       service
Furthermore, in an effort to compliment these measures,      our own solution to screen harmful images and
we conduct security and ethics training sessions and         pictures, further enhancing the efficiency of our
mount campaigns to raise our employees’ awareness of         monitoring system.
the importance of information security. We also collect      In the event of sensitive issues or critical events,
the security pacts from our partners and their employees     the hotline kicks in to connect monitoring staff
involved in our projects. In 2010, we reformed our           to the decision-making table of the Posting Policy
                                                                                                                     Major Achievements
admission protocol in order to streamline procedures,        Commission for timely responses and to prevent
                                                                                                                     •   2006 Awarded the Police Commissioner’s prize for
enhance information security and improve customer            issues from developing. In addition to the Clean
                                                                                                                     suicide prevention
convenience.                                                 Center, we also separately run a Clean Café to
                                                                                                                     • 2006     Awarded the Minister of Health & Welfare prize
                                                             monitor our Café service. Later in 2010, we plan to     for suicide prevention
Information Security Advisory Group                          develop a self-regulation guide to standardize in-      • 2008     Topped the Cyber Ethics Index by the Ministry of
In March 2007, Daum launched the Information Security        house monitoring practices.                             Health & Welfare
                                                                                                                     • 2009     Second place at the Cyber Ethics Index by the
Advisory Group, consisting of seven external experts in
                                                                                                                     Ministry of Health & Welfare
law, academia, finance, policies and technologies. The
                                                                                                                     • 2009     Awarded the Minister of Culture, Sports &
Group conducts objective and independent analysis of
                                                                                                                     Tourism prize for Fair Use Issues
Daum’s information security practices, as well as updates
the company in regards to recent trends in information
security regulations and provides advisory services for
future directions in order to ensure stable services.

                                                                                                                                                                                               23
Daum Communications
Sustainability Report 2009




                                                         Preventing Internet Abuse

Strict Self-Screening Standards                          Screening Illegal Information
We operate strict self-screening standards to prohibit   The Posting Policy Commission refines the guidelines    libels cases only when the victim reports in person.

harmful content and advertisements from our Web          set forth in the governing laws and service policy to   However, we can intervene and take aggressive action

site. Applying the grading criteria of the Internet      eradicate harmful information and protect teenagers     even without reporting, when the libels postings have

Contents Grading Service established by the Korea        from harmful content, while making diverse efforts to   become out of control and are expected to cause

Communications Standards Commission, we only             protect users’ rights from copyright infringement and   severe damage, or when the posting constitutes

allow contents graded from 0 to 1 on our Web             libel.                                                  cyber terror on a particular person or entity or poses

site. Furthermore, by applying strict guidelines to      Any reported or detected harmful content is removed     expressive and extant threats to said party.

advertising, we prohibit unauthorized or illegal         from bulletin boards and locked from search key
advertisements at source.                                words, while the communities carrying it may be         Guiding Teenagers with Safe Browsing
                                                         shutdown and the creators warned of the harmful         Daum implements policies to guide teenagers

Internet Contents Rating Service by the Korea            content. Accumulated warnings come with penalties       with safe browsing under the Act on Promotion of
Communications Standards Commission
                                                         in using our services. In order to minimize user        Information and Communications Network Utilization
http://www.safenet.ne.kr/english/introduction/rating_
system.html
                                                         inconvenience and protect the rights of content         and Information Protection, Etc. Under the same act,

                                                         creators, we delete posting from the database 30        we designate and announce the person in charge of

Reporting System                                         days from notification, with the creators then being    protecting and guiding teenage users. Currently, we

Daum runs various reporting systems, allowing users      given 30 days to make any objections.                   have listed 9,900 adult-only keywords prohibiting

to directly report harmful content to the company.                                                               teenagers’ access to adult information through

Users can report service failures, malicious postings    Copyright Protection                                    multilayered subscription and payment procedures.

or replies, harmful information or infringements to      Daum equally upholds the freedom of expression          We also conduct regular training for our employees

the Customer Center, Copyright Infringement Report       of UCC and the protection of copyright. Under           in helping them guide teenagers with safe browsing.

Center and 24hour News Center. The recent reform         the “Notice & Take-down” principle in accordance
upgraded the reporting system, allowing reporters to     with the Copyright Law, postings that infringe on       Clean Internet Campaign
be updated with follow-ups, relevant regulations and     copyrights are taken down as soon as a report is        Dedicated to a clean and healthy Internet world,

remedies. The renovation also focused on diversifying    received. In order to prevent copyright infringement,   Daum is involved in various campaigns and programs.

reporting routes so as to speed up report reception.     we have installed filtering systems to screen out       In 2009, we mounted a year-round campaign

For example, after receiving a report of suicide         the copying of any music for which the copyright-       entitled, “Joyful Internet—Internet is another world

attempt based on a web-posted will, we swiftly           holders had filed for protection on the Web. We         of humanity.” The campaign introduces revisions

notified the Police Cyber Terror Response Center         also collaborate with various stakeholders, including   to the Copyright Laws and cases, the ten policies

through the hotline and were able to save a life.        broadcasting stations and music copyright-holders to    for protecting copyright and the prevention of user

                                                         protect copyrights.                                     inconvenience. In addition, we eliminate malicious
                                                                                                                 replies that can distress people and prohibit content

                                                         Crushing Down on Libel and Malicious                    harmful to teenagers. We also guide our users to

                                                         Comments                                                keep their passwords periodically updated, building

                                                         Libel by postings and malicious replies to postings     a well-cultivated and joyful Internet culture that also

                                                         often raise social issues. Therefore, Daum has put      protects personal information.

                                                         in place swift and efficient preliminary procedures
                                                         to deal with such incidents. We can intervene in


24
Part 2. Sustainability Core Issues




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                                                                                                                                                   25
Daum Communications
Sustainability Report 2009




Do you know what “Daumful” means?                             Open Your Mind
“Daumful” corporate culture incorporates                               Our corporate culture can be summed up
                                                                                                                                          I think the open and active discussion is also
                                                              in two words, open communication. The free and
                                                                                                                                an integral part of an open communication culture. At
the way of thinking, lifestyle and attitude                   progressive atmosphere is the biggest merit of working
                                                                                                                                Daum, you have various channels in which to express
                                                              at Daum, and is something that my friends envy.
                                                                                                                                yourself, such as the online scribble board, discussion
of “Open Your Mind,” “Enjoy being                                                                                               board and suggestion board.
                                                                       I found it strange to call my fellow workers
Different,” “Learn Voluntarily,” and                          “Nim (meaning Mr. or Ms. in Korean)” and not use job titles
                                                                                                                                          The Book Gift* event is my favorite. You
                                                              as in other Korean companies. After I get used to
                                                                                                                                can present books to your colleagues once a month,
“Act Responsibly.” Let’s learn about the                      this, however, I found myself enjoying free and open-
                                                                                                                                helping to build a human network and solidarity with
                                                              hearted communication with colleagues regardless
                                                                                                                                your colleagues and share useful information and
“Daumful” corporate culture in imaginary                      of their title. I learnt how Daum has realized an open
                                                                                                                                knowledge.
                                                              corporate culture that allows individuals to fulfill their
conversation among our employees.                             potential.




                                                              Q. What can we do about it?                 A. We can do this.
                     Tip
                                                              Daum’s open communication                   Referring to each other by name and “Nim” is the core part of Daum’s open
                                                              practice is desirable. However, it          communications.
                                                              seems to lack hierarchy in terms            There are voices of concern, though, over the equal ranking and resultant
✽Book Gift                                                    of accountability and the decision-         absence of hierarchy and career path.
Daum employees can present books to each other once           making process in some areas.               In fact, we have titles with ranks in four phases of an employees’ career path,
a month. The books can be shared on Daum’s in-house
                                                              Sometimes, we need leadership and           assisting them in their career development. It is simply that we prefer using “Nim”
digital library.
                                                              hierarchy to prevent conflict. Official     over job titles.

✽Refresh leaves                                               titles will also motivate employees         We will increase communications on this matter in order to help our employees
Daum gives its employees paid leave after every three-years   to work hard and be fairly rewarded         better understand the system.
of service.                                                   with promotions in title.



26
Part 2. Sustainability Core Issues




Enjoy being Different
         The Jeju office, called ‘Global Media Center’
                                                                defying the hundreds of kilometers distance between           I saw some people playing basketball and table tennis.
(GMC),   speaks volumes of the creative culture of
                                                                us.
Daum.
                                                                                                                                       I was on refresh leave* last year. My friends
                                                                         Not only the working environment, but also           envied me when I told them about our paid refresh
         Right. Who would know that a company
                                                                the open corporate culture that respects individual           leave after every three-years of service. The refresh
can move out of Seoul, in a country where most
                                                                personality and diversity plays an integral part in           leave literally refreshed me and enabled me to work
of the economic, social and cultural sources and
                                                                developing a creative corporate culture. Our dress            harder and more joyfully.
opportunities are concentrated in one city? The
                                                                code is a case in point. Although, other companies
decision was very original and creative.
                                                                claim to have casual dress codes, it is doubtful you                   I had been on refresh leave to an international
                                                                would see ripped jeans or miniskirts in their offices.        IT conference. Inspired by my experience there, I made
         Diverse and convenient forms of meetings
                                                                                                                              suggestions online at the Suggestion Box* board
are another aspect of Daum’s unique culture. We
                                                                         What about conveniences in the office? The           and they were adopted. I was proud of myself when
had challenged the conventional idea of meetings
                                                                Seoul office has a cafeteria, massage room, game              my idea was adopted in the business.
being face-to-face in a meeting room. As an Internet
                                                                room and even a party room. The GMC even has an
media company, we mobilize all IT technologies in our
                                                                indoor gym and basketball court. In particular, I love                 Congratulations! Then, will you be nominated
meetings, such as in-house messenger, conference
                                                                the massage room which allows you to relieve your             for the Daum Star Awards* at the year-end party?
calls and video conferencing.
                                                                tensed neck and shoulders after a long day’s work.            You get gold name cards, a trophy, a bonus and even
                                                                Meanwhile, the workout gym helps us keep in shape.            the opportunity to train overseas if you win. What a
         What about the Office View* service! It was
                                                                                                                              wonderful tradition!
such an out of the box idea! We can see inside offices
                                                                         My favorite is the cafeteria. Where else can
in Seoul and Jeju as if we are right next to each other,
                                                                you enjoy delicious coffee and drinks at cheap prices?                 Not only that, but I like the cordial and
                                                                Chatting with colleagues over a 200-won cup of                liberal atmosphere. Everyone can freely express their
                                                                coffee is my favorite time at work. It helps me get rid       opinions and congratulate each other on their good
                                                                of stress and sometimes helps to inspire me. What is          achievements.
                                                                more is that all proceeds are donated to charity.
                                                                                                                                       You can say that again. When it comes to
                                                                         When I was in GMC on a business trip, I              service development, employees’ ideas, creativity and
                                                                worked with my laptop outside on a wide open grass            passion take precedence over process. Passionate
                                                                area. Basking in the sun, I felt as if I was on a vacation    people are the driving force behind our company.
✽Office View: a map image service that shows the inside of
                                                                and could concentrate on my work more. After lunch,
 offices at Seoul and Jeju




Q. What can we do about it?                A. We can do this.
                                                                                                                                                     Tip
There has been rising concerns about       Having begun from two founders 15 years ago, Daum has grown into a large
our employees’ losing steam as the         corporation with approximately 1,000 dedicated employees.                          ✽Suggestion Box
company grows. A well-established          Processes and standards are required in order to address the diverse needs of      employees’ idea suggestion system. After reviews, adopted
process puts the system in good order,     employees and improve working efficiency. However, these are not in our interest   ideas are rewarded with money and developed into actual

but also increases red tape and can        if the mechanisms get in the way of the autonomy and venture spirit of our         product services by the company.

lead to employees passively following      employees. Therefore, we plan to operate the “Suggestion Box” and “Personnel
                                                                                                                              ✽Daum Star Awards
given protocols. We see bureaucracy        Committee” more aggressively to go back to basics and remove red tape in the
                                                                                                                              Candidates who have made considerable contributions to
abound in the organization. What           processes. We hope this can enhance both employee engagement and process           the company’s business results are voted for online at the end
should we do to restore the venture        compliance.                                                                        of every year, with the prize-winner receiving various prizes,
spirit, go back to basics?                                                                                                    including the opportunity to train overseas and money.




                                                                                                                                                                                        27
Daum Communications
Sustainability Report 2009




Learn Voluntarily                                                Act Responsibly
         Passion without education is dangerous,                          Well, I am proud that we have many excellent
                                                                                                                             of Daum there. It was very rewarding seeing how my
though. So, that’s why the company operates various              programs and systems. I think we should take
                                                                                                                             contributions were spent on building schools there. I
education programs, I think.                                     pride in the high ethical mindset and determination
                                                                                                                             felt really proud of our company during the trip.
                                                                 regarding the ethical practices of our employees. In
         Right. I am taking the in-house language                fact, Daum declared its commitment to business ethics
                                                                                                                                     From our conversation so far, I think I have
course and Daum MBA course. I like these because I               at the outset and has established transparent and
                                                                                                                             found the reason behind Daum’s remarkable success
can efficiently manage my time and develop my future             ethical management practices based on its advanced
                                                                                                                             and achievement to date. Our unique “Daumful”
career plan.                                                     corporate governance centered on the Board of
                                                                                                                             corporate culture of open communication, a young
                                                                 Directors.
                                                                                                                             and joyful atmosphere and ethical and sharing spirits
         Yes, the education system is well segmented
                                                                                                                             are the driving force behind our success.
to cater to the individual needs of entire classes, from                  Yes. I agree. Indeed, I am proud to be part of
the newly-employed to senior employees, as well as               such a clean and socially responsible company.
                                                                                                                                     Of course. We should try hard to protect and
team staff, team leaders and managers. My colleagues
                                                                                                                             evolve our unique corporate culture in the future. Let’s
attend the specialist courses or special lectures a                       I went to Bangladesh during my summer
                                                                                                                             go and create joyful change.
couple of times a month and are satisfied with the               vacation last year on a volunteer service trip for 4
quality of the lectures.                                         days and 3 nights. I was selected to share cultural
                                                                 activities with students at the Hopeful Global Village
         The in-house lecturer program trains
employees to become specialized lecturers for their
coworkers. I’d like to try that program by next year
using my specialty and current work experience.


         I’d like to try the overseas training
programs* and build my global competence. The
company selects two or three employees to send
overseas on an MBA course, as well as conducting
various specialist courses and visiting researcher
programs every year.




Q. What can we do about it?           A. We can do this.
                                                                                                                                                    Tip
We need more sophisticated            We offer segmented career development and learning programs classified by job
career development programs           categories. However, we have too many new job functions to develop customized
catering to individual needs. The     programs. To deal with this issue, we plan to introduce a self-learning program
basic leadership courses and          customized to the needs of teams and job functions.                                     ✽Overseas training program
programs to share the corporate       We will also cultivate a self-learning culture among our employees to assist them in    Daum overseas EDP, overseas MBA course subsidies,

vision also need to be reinforced.    their individual career development.                                                    Global Action Learning Program

                                      In addition to conducting training on our corporate vision, we plan to discuss more
                                      efficient programs during Personnel Committee meetings in 2010. We currently
                                      conduct a Self-Leadership course, Daum MBA course, New Leader Orientation (NLO)
                                      course and leadership diagnosis course as part of our basic leadership training.



28
Part 2. Sustainability Core Issues




Daum’s Ideal Talent & Competence

Daum’s ideal employees are those possessing the competences of what we call “Daum people”. We have identified six core values based on our extensive analysis of the
behavioral patterns of Daum’s core talent based on our employees’ opinions collected through various channels. Consisting of these six core values, the competences of Daum
people epitomize the unique and strong culture of Daum. At Daum, we strive to weave these values into our corporate culture.




             Creativity                  Integrity                                           Open
                                                                      Passion                                               Professional                        Fun
                                                                                          Communication



        ●Departing from             ●Think and act in a right   ●Conduct business and    ●Acquire productive             ●Endeavor to become the      ●Assume a positive
          conventional customs,       and ethical way             jobs with passion       communication skills             best specialist              attitude in all businesses
          creating new change                                                                                                                           and relationships with
                                                                                                                                                        colleagues and customers


Sharing with Our Employees

Daum is committed to sharing with its employees. We believe that fair compensation       ▶▶   Comparison Index
makes employees content with the company and builds trust between the company
                                                                                                                               3.3           3.3      3.3
and employees. These two values constitute the sustainability of a company                                                                                          2.9         2.8

because contented employees who also have trust in their company work hard and
realize excellent performances. Therefore, we look for ways to return the fruits of
our performances to employees, in addition to fair compensation. When we give
                                                                                         ✽Comparison Index: top 10%
compensation to our employees, we make sure that the average of the top 10%
                                                                                           average annual payment/ lowest
does not exceed three times the average of the lowest 10%.                                 10% average annual payment

                                                                                                                               2005          2006     2007         2008         2009



Personnel Committee

As a responsible corporate citizen, we abide by all laws and regulations, while          Major Agenda by Year
fulfilling our responsibilities to local communities and employees. In our labor
practice, we protect female workers’ rights to social activities and eliminate           Year        Agenda

discrimination based on gender, race and academic background, as well as striving        2007        •Creative corporate culture campaign                •Deliberation of rewards

to prevent industrial accidents.                                                         2008        •Open communication campaign                            and punishments
                                                                                                     •Selecting Daum Star Awards winners                 •Business ethics practices,
We don’t have a labor union, but instead founded an organized autonomous
labor-management council called the ‘Personnel Management Committee in 2004              2009        •Operating the Suggestion Box, in-house digital         i.e. Gift Return Center

in a bid to protect our employees’ labor rights. Serving as the communication                           library, and book gift programs                  •Administrating company-

                                                                                                     •Improving and operating the Daum Star                  wide events such as the
channel between the company and employees, the Committee is comprised of
10 members elected by the employees. The Chairperson is designated by the                               Awards program                                       Daum Year-end Party

CEO. The Committee holds meetings twice a month to discuss and deliberate on             2010        •“Daum History” is created to share and

personnel policies with the company, serving to represent the employees’ voices                         conserve the company’s history
                                                                                                     •Propagating “On Culture” which publicizes
to the company. Committed to a desirable corporate culture, the Committee
also fine-tunes with the company on issues regarding employee welfare benefits,                         and incorporates management vision and

operates the ‘Gift Return Center’ and serves as an in-house discipline authority, thus                  philosophies into business

further enhancing transparency in the organization. The Committee also institutes        ✽Details of Daum’s social responsibilities are on page 55.

various systems and mounts campaigns to publicize the management’s vision and
philosophy, as well as the ‘Daumful’ corporate culture.

                                                                                                                                                                                       29
Daum Communications
Sustainability Report 2009




Daum University

Daum runs an integrated and systemic training program called “Daum University”.            Leadership Course
Our training programs focus on assisting employees commit to self-development
                                                                                           Daum MBA            Daum has operated
and develop future visions and plans, thereby enhancing job competency in order
                                                                                           “Daum MBA” since 2006. In step with
to foster talent for corporate sustainable growth.
                                                                                           the rapidly-changing Internet media
                                                                                           environment, we instill a strategic
                                                                                           mindset so as to deal with the
Training Hours Per Employee
                                                                           (Unit: hours)   paradigm shift. The program aims at

Year                                          2007       2008       2009 Average           fostering core talent who are equipped

Training hours per employee                     92         87         75        84.7       with a strategic mindset, down-to-earth management knowledge, planning skills
                                                                                           and trouble-shooting capabilities. More than 50 of the above team-managerial level
                                                                                           have participated in the program, equipping themselves with insightful views and
                                                                                           knowledge of running a business. They also serve as change agents.


                                                                                           Daum Overseas Executive Development Program (EDP)                                    The overseas
                                                                                           EDP is linked with an overseas MBA program in order to cultivate global
                                                                                           competitiveness in our executives. In collaboration with Cornell University, we ran
                                                                                           the “Daum Cornell EDP” in 2007 and 2008, in which a total of 50 executives
                                                                                           participated, cultivated global leadership competences in business leadership,
                                                                                           strategic thinking, data-based decision-making skills, as well as learnt about
                                                                                           technology innovation trends.


                                                                                           Leadership-building programs                At the beginning of 2009, we implemented
                                                                                           a multi-layered test and personality test for leaders giving them competence-
                                                                                           building training based on the results. The training program in place is customized
                                                                                           to the needs of each class, from the to-be-leaders to team managers and division
                                                                                           directors.


Ethical Management

Daum adopted ethical management in 2006. Preparing a code of ethics and                    decision-making process. All reporting, inquiries and complaints are handled following
detailed guidelines, the CEO declared the company’s commitment to ethical                  speedy and fair procedures. All issues received via the hotline are 100% addressed by
management. Since then, all business decisions and behaviors are guided with               the authority regardless of their importance. Any employees who breach Daum ethics
the principles and guidelines of ethical management. All employees take full               are instantly subject to punishment, and can be fired when the breach is severe. In the
responsibility for their knowledge of confidential business issues and new business        run-up to Korean festive days (New Year’s Day and Thanksgiving) every year, we send official
opportunities and comply with all regulations regarding copyright licenses and non-        letters to our partners and suppliers, as well as operate the Gift Return Center as part
disclosure confidential agreements. Without consent from the company, they are             of our “We Don’t Accept or Offer Gifts” campaign.
prohibited from taking advantage of such knowledge for themselves or a third
                                                                                           Ethical Management Practice (2007~2009)
party. Applied across the board, the ethical management principles take priority
over legal obligations in the practice of righteous management.                            Training         Compliance training             Annually
                                                                                                            New employee /
                                                                                                                                            Four times a year
                                                                                                            job class-based training
All “Daum People” are obliged to report any unethical practices by themselves or
                                                                                           Checking         Audit system
colleagues through a hotline under the cloak of anonymity. The hotline is under direct                                                      Year-round
                                                                                                            Hot line
control of the Audit Team, while the CEO and Audit Committee are involved in the                            Gift Return Center              Twice a year (New Year’s Day, Thanks Giving, etc.)


30
Part 2. Sustainability Core Issues




Executive Leadership           Issue Leadership course, overseas EDP, newly-promoted division                                  Job Competence Course
                               director course, executive coaching
Team Manager                   Daum MBA, newly-promoted team manager course, team
                                                                                                                               Basic and advanced Job Competence Courses are conducted around the year to
Leadership                     manager compulsory/ optional leadership courses                                                 develop skills and competences in each job group. Furthermore, we hold a job-
                               (conflict managing, strategic thinking, empowerment coaching, etc.)
                                                                                                                               group conference at least once every year. The job-group conference consists
Team Staff Leadership          Self-leadership course                                                                          of crossover briefings and talks, providing employees with the opportunity to
                               (time management, creativity, trouble-shooting, communication skills, etc.)
                                                                                                                               exchange and discuss new trends and technologies. Since 2005, we have hosted
Overseas Study Program                           We select 2~3 employees every year to send                                    the “Daum Developer Conference” for developers both inside and outside the
overseas on an MBA course, specialist course and visiting researcher programs to                                               company. The first such conference to be conducted in Korea’s Internet industry, it
cultivate global-leading competences. Since 2005, we have been working with the                                                is successfully growing into a venue for developers to exchange useful information,
world’s prominent academic institutions, such as MIT Sloan, UCLA, Carnegie Mellon                                              new technologies and services.
University, Washington-Fudan and Georgetown University. Furthermore, we are
working to include more specialized and various overseas study programs.                                                       Internal Lecturer

                                                                                                                               In 2009, Daum launched an internal lecturer program under which internal
Daum People’s Competence Course
                                                                                                                               experts in a given area train their colleagues. This program has furthered the job
                                                                                                                               competences of our employees and provided self-development opportunities to
The Daum People’s Competence Course provides compulsory and optional courses
                                                                                                                               internal lecturers as well as provided them with fair compensation.
in communication skills and creative trouble-shooting skills so as to cultivate the six
core values of “Daum People”. The Challenge Freshmen course assists those newly-
employed quickly adapt to the corporate culture and understand our corporate                                                   Common Course
vision. In addition, the mentoring and peering programs help newly-employed
                                                                                                                               We hold a company-wide leadership strategy workshop and strategy-sharing
freshmen and seniors quickly adapt to the new environment and reinforce their job
                                                                                                                               sessions every year. The annual compulsory course also includes basic business
competences. The mentoring program couples new employees with Daum leaders,
                                                                                                                               ethics courses.
while the peering program matches new senior-level employees with seniors within
the same team. These programs help newcomers build human networks within the
company, enabling them to quickly adapt to their new working environment, as
well as cultivating leadership in existing employees.




                                                                                                                                                                                        Hotline
Hotline Operation
                                                                                     ▶▶    Gift Return Center Operation
                                                            (Unit: cases)
                                                                                                   Return           Donation                                          To report unethical practices, please
                                               2008                2009                                                                                                      contact Audit team to
Reporting general issues                           22                  25                                                                                           ●Tel: +82-2-6718-1272
                                                                                           2008                55                   11       66
Reporting wrongdoing                                 2                   0                                                                                          ●E-mail: daum_hotline@daumcorp.com
                                                                                           2009                     82                       16      98
Total                                              24                  25                                                                                           ●Website: www.daum.net → corporate

                                                                                                                                                                     overview → Cyber Ethics Center → Hot Line
▶▶   Hotline Process

     General issues   Department in                                          Checking on                                          Written
                         Charge                                               progress                                            report
                                                                                                                                                    Feedback to         Case closed
 Reporting on                                                                                                                                      reporter and        (saved in the
   hotline                                                                                                                                        confirmation of     server of Audit
                                                                                                                                                        case               Team)
                                               Internal
                         Top                                       1st Feedback            Inspection         Report to
      Reporting                             inspection by                                                                         Measures
                      Management                                    to Reporter             (1~2wks)         management
     wrongdoing                              Audit Team




                                                                                                                                                                                                                 31
Daum Communications
Sustainability Report 2009




 4
Relocation
to Jeju
Taking another leap into a new phase in Jeju




Many people working in Seoul share the same concerns: “the
commute to and from work takes a long time; it is hard to
manage baby-care and work”; “it is practically impossible to drive
my baby to the workplace daycare center every day”; “I envy the
working conditions of Silicon Valley.” In addressing these issues        ▶ Employee Satisfaction Survey on Jeju Life
of our employees, we concluded that the solution was outside of
                                                                         Unsatisfied 1.2%                         Very Satisfied 39.4%
Seoul. In 2004, we initiated the Jeju project called “joyful test,”      Not bad 5.6%

which was the relocation to Jeju Island. Jeju Island is the perfect
place for an agreeable and creative working environment that is
close to nature.
The Jeju project is a long-term project, one that has spanned
ten years collecting employees’ opinions. The Daum Campus
will provide an eco-friendly working environment and excellent
welfare programs to further enhance employee satisfaction and
accomplishments as well as quality of life. As a responsible corporate
                                                                         Satisfied 53.8%
citizen, we will contribute to the local development of Jeju.                              ●Target: 169 persons    ●Respondent: 160 persons
                                                                                           ●Response rate: 94.7%     ●Male: 123, Female: 37



32
Part 2. Sustainability Core Issues




Joyful Test of Daum, Jeju Project


Thinking out of         Departing from the overpopulated and uncreative urban          Ergonomically-           In March 2004, Daum announced its partnership with Jeju
the Box                 life of Seoul, Daum chose Jeju, the exotic Island located      Designed Working Special Self-Governing Province, Jeju City and Jeju University
                        south of the Korean peninsula, for its new headquarters.       Spaces                   as part of its Jeju Project. In April 2004, the project began
                        This location is ideal for a creative and liberal working                               with 16 employees of the Internet Intelligence Research
environment, eco-friendly lifestyle and accessing the global market.                   Center moving to Jeju. In June of the same year, the 38 employees from the
This decision sent a far-reaching ripple across the nation, and Daum’s Jeju Project    Media Division joined them, adding scale of economy to the Jeju Project. With the
became the talk of the IT industry. When the Korea’s largest Internet media            completion of the Daum Global Media Center (GMC) in February 2006, a total of
company revealed its relocation plan, the decision caused a sensation in a country     130 Daum employees nestled down in the new office. Built on a 13,200m2-site in
where most businesses are headquartered in and around Seoul area. This decision is     Odeung-dong, Jeju city, the 4,950m2-sized architectural area of GMC is surrounded
a clear example of thinking out of the box.                                            by Mount Halla, the symbol of the Jeju Island, and the blue Pacific ocean. Equipped
                                                                                       with state-of-the-art technologies and equipment, the ergonomically-designed
                                                                                       work spaces and various conveniences inspire creativity and engagement in our
                                                                                       employees. As of the end of 2009, 200 of our employees are working in the GMC.




Strategy-building In order to extend the Jeju Project, we signed a rental              New Phase That           Daum expects the Jeju Project will create synergies in
and preparing for contract on the 127,873m -site of the Jeju Science Park
                                                     2                                 The Joyful Test          various aspects: the testing of a new business environment
relocation of the       in December 2007. Finally, in December 2009, we broke          Brought About            made possible by the Internet; a counterproposal to
head office             ground for a new five-story building. The Daum Campus                                   Seoul-based business expansions; an advanced business
will realize the company’s vision of “eco-friendly” and “sustainable” development,     environment that maximizes creativity and efficient communications; promotion of
following the completion of the new office buildings.                                  informatization and the advancement of scientific technology in the region. Daum’s
When the new building is completed in the Jeju Science Park in 2011, we will move      ‘joyful test’ will give precedent for the planning and implementation of long-term
the main office from Seoul to Jeju. The Seoul office will continue for a while even    relocation to areas outside Seoul for enterprises. We also expect this will become an
after relocation to Jeju. In order to minimize any adverse effect of such a move, we   example of sustainable growth for Korean companies as we are setting an example
will give our employees the freedom to choose whether to stay in Seoul, while our      of co-prosperity and sustainability in the region over a long period of time.
employees in Jeju will also be allowed to move back to Seoul whenever they want.




                                                                                                                                                                          33
Daum Communications
Sustainability Report 2009




Opening a New Era                                                                         Can we take another leap outside the Capital?                       ●      Daum may run

              of Daum at Jeju                                                             against Korea’s capital area-concentrated infrastructure in the process of its Jeju Project.
                                                                                          In fact, Seoul and the capital area claims half the nation’s population, while the nation’s
                                                                                          financial, political and business activities are centered in the area. Do you think the Jeju
                                                                                          Project can successfully defy social and infrastructural conditions?


                                                                                          We will push the          Characteristically for an Internet media company,
                                                                                          envelope with             our business is not influenced by location. Our open
                                                                                          enterprising spirit. communication and liberal corporate culture also fits
                                                                                                                    the new environment. We will develop and grow our
                                                                                                                    businesses through change and innovation. By forming an
                                                                                          industrial cluster with businesses, research institutes, and universities in and around
                                                                                          Jeju Science Park, we will expand our business partnerships and human networks.
                                                                                          We seek our future growth engines in collaborations with the various authorities of
                                                                                          Jeju, helping us to grow into a leading global Internet media company.
                ▶ Employee Satisfaction on Jeju Life                                      It takes more than one company to overthrow the Seoul area-centered
                                                                                          infrastructure. That’s why we call our relocation project a “test.” It will be, however,
                Others                                            Natural environment
                                                                                          a joyful test. Since our inception, we have successfully conducted innovative
                1.3%                                                             26%
                                                                                          trials and creative tests to bring joyful changes to the world. Our accumulated
                Welfare benefits
                                                                                          experiences from these trials will drive us forward, and eventually enable us to
                5.6%
                                                                                          successfully settle in the new environment. We are eager to prove that a business
                                                                                          can successfully grow outside the capital.

                Office
                environment
                16%
                                                                                          What about the employees? Are Jeju employees satisfied with the
                                                                                          working and living conditions?              ● The relocation forces our employees to
                Commuting                                          Work concentration     move their life, presenting various. They might be faced with their family’s objection
                18%                                                              18%      and challenges in their social life. Residence and education are further formidable
                                                                                          issues. What about at work? They may run into barriers regarding communications
                                                                                          with the Seoul office. They may fall behind the latest IT trends or market information.
                                                                                          Their cultural life will also be challenged. Do you think the company can satisfy
                ▶ Complaints about Jeju Life
                                                                             Financial    employees in their work and life?
                                                                                6.3%
                                                                           Leisure life
                                                                                          We will continue          Daum is dedicated to addressing the various work and
                                                                                6.3%
                                                                                          communications            life issues that our employees may face in the process of
                                                                           Education /
                                                                                          to make                   the relocation project. In developing new policies, our
                                                                            child care
                                                                                6.3%
                                                                                          improvements.             focus is on maximizing conveniences and leisure spaces at
                                                                                                                    work, as well as increasing commuting conveniences and
                                                                                          residential stability in life. Furnishing our new office buildings with state-of-the-
                                                                                          art technologies and equipment, we have installed a number of video conference
                                                                                          rooms and conference call spaces to overcome barriers in communication between
                Human networking /
                                                                                          Seoul and Jeju.
                social life
                81.3%                                                                     The employee satisfaction survey on their Jeju life in 2008 found that 93.2% of
                                     ●Target: 169 persons   ●Respondent: 160 persons      respondents were satisfied and 85.2% would recommend their acquaintances
                                     ●Response rate: 94.7%    ●Male: 123, Female: 37
                                                                                          to work at Jeju office. In particular, the findings showed that clean air and short
                                                                                          commuting hours as well as a work-life balance were the biggest benefits of


34
Part 2. Sustainability Core Issues




working in Jeju. These highly satisfied employees further enhanced productivity and                ▶ Global media centar
led to innovative service products such as tvPot and Agora, as well as the in-house
development of an advanced search engine program.
Most of our Jeju employees are doing well and satisfied with their life in Jeju. Still,
the company is well aware of pending issues that need to be worked out in the
future. In particular, the drastic change in social life is an issue that most of our
employees face and we will work vigorously to find solutions to this issue. Going
forward, we will keep improving working and living conditions in Jeju through active
communications with our employees.




Can we continue to attract and retain the best and brightest talent?
●     Admittedly, the 500,000 population of Jeju is a small pool of talent to recruit
competent and experienced IT developers and engineers. Even the few local talent
there is would rather move to the Seoul area. In a heavily human resource-concentrated
business like Daum, it is undisputedly critical to success to secure the best and brightest
talent. What does Daum have in plan regarding this issue?

                                                                                                   ▶ Welfare Programs for Jeju Staff
While inducing            We aim to attract talent in two ways. One is inviting talent
talented workers          to Jeju and the other is fostering local talent. We will
to Jeju, we will          invite talent with attractive work and life conditions. While              • Commuting shuttles

also foster aspiring supporting our employees to fully realize their potential                       • Indoor gyms, table tennis facilities, and outdoor gyms

IT talent in the     at work, we will also support their private life with various                   • Cafeteria serving breakfast, lunch and dinner

region.                   welfare benefits. We will attract talent by offering the best              • Sleeping room, shower, laundromat, barbeque garden

                          working conditions, allowing them to choose by themselves                  • Lounges (game room, idea room, female-only board game room, etc.)

to work in Jeju. On the other hand, we take a long-term approach to fostering                        • Subsidies with living and moving expenses, rent on

local talent. In 2007, we established the “Daum Track,” an industry-first systemic                    company flats, low-interested housing loans

industrial-academic cooperative program within Jeju University. The program offers                   • Education and daycare subsidies

                                                                                                     • Plane tickets for holiday seasons
practical training courses, OJTs, internships and scholarships. The Daum Track
will attract the best and brightest talent and make Jeju University a prominent IT
academy. Through the program, we aim at the harmonious growth of talent from
both outside and inside Jeju.

                          ▶ Daum Track Vision

                                                                                                   Specialist Training Program Customized to Demands

                                                                                                                     Attaining corporate vision

                                                                                                                                                Strengthening
                                                                                    Developing                 Improvement
                                                                                                                                                  Industrial-                        Fostering
                                                                                     training                   to training
                              Goal                                                                                                                Academic                            talent
                                                                                     program                     programs
                                                                                                                                                 cooperative

                                                                         • Organizing Curriculum      • Developing  curriculum           • Employing   professors for       • Selecting   Daum Track students
                                                                           Steering Committee           customized to demands              industrial-academic              • Endowing     Daum scholarship
                                                                         • Developing curriculum      • Increasing on-site training        cooperative programs
                              Major Tasks
                                                                                                        programs at worksites            • Special lectures by industrial

                                                                                                      • Reinforcing internship program     experts
                                                                                                      • Developing training materials    • Holding industrial-academic

                                                                                                                                           cooperative workshop
                                                                                                                                         • Mentor program




                                                                                                                                                                                                           35
Daum Communications
Sustainability Report 2009




                                                                                                 What can we do for regional development?                     ●        Jeju is about to take
                                                                                                 another leap forward into creating a sustainable future. In addition to the region’s main
                     Eco-Friendly Office Building and Green Campus
                                                                                                 businesses of citrus fruit and tour industry, the Jeju Special Self-governing Province is

                 Upon completion of our new office building, we plan to form the                 seeking to another industrial and/or cultural initiative that best represents the Island’s
                 Daum Campus phase by phase. The Daum Campus will be a co-                       geographical location and natural advantage. To that matter, Daum’s relocation project is
                 prosperous space for the company and the region, and which will                 very encouraging. However, is it possible that Daum make practical contributions to the
                 be open to local residents as well. The design concept is Green                 economic and social development of the region in an Island lacking the IT infrastructure?
                 Campus, which aims to minimize carbon emissions through eco-
                 friendly technologies. Since being a long-term project spanning
                 more than ten years, we will continuously adjust spaces in
                 preparation of future demands.                                                  We will serve the            Dedicated to the development of the regional economy
                                                                                                 local economy                and culture, we are involved in various programs regarding
                                          Green Campus Initiatives                               as a new growth              industrial development, local talent employment and social
                                                                                                 engine.                      contributions. Daum’s relocation to Jeju will contribute to
                 •   Reusing rainwater as emergency water for fires as well as water for
                                                                                                                              the industrial infrastructure of Jeju in the long-term and
                  gardening through the rainwater treatment system.
                                                                                                 create jobs through population expansion as well as realize Gross Regional Domestic
                 •   Enhancing energy efficiency by adopting an ice thermal system
                 •   Saving energy and reducing carbon emission by installation of LEDs          Production (GRDP) growth along with other economic benefits.
                 •   Minimizing environmental pollution by using eco-friendly materials          According to a study by the Jeju authority in 2005, Daum’s relocation will result in 6.6%
                 •   Improving energy efficiency through a rooftop garden and wall garden        growth in the GRDP by 2014 and create 1,000 new jobs in the region. Even if this
                 •   Making use of natural energy sources such as sunlight and wind              figure is not exact, it is obvious that Daum’s move to Jeju will have positive economic
                 •   Minimizing vehicle carbon emissions through an eco-friendly
                                                                                                 effects for the region.
                  transportation plan
                                                                                                 Daum’s move will also lead to other businesses’ deciding to move out of Seoul. In effect,
                 •   The eco-friendly use of the land in the vicinity, such as a weekend farm,
                  organic family garden and eco pond, etc.                                       ten companies have moved into or been established in Jeju since Daum’s Jeju Project in
                 •   Minimizing civil work to preserve the natural environment                   2004, while many more are considering moving to Jeju. In regards to Jeju Science Park,
                                                                                                 where Daum is building its new main office, the lot sales rate has grown to 55% as of
                                                                                                 the end of 2009, from 2% in December 2007 before Daum’s residential contract.
                                                                                                 Daum also contributes to local employment. Established in Jeju, our subsidiary “Daum
                                                                                                 Service” has 249 of its total workforce of 360 working in Jeju. Of this, graduates from
                                                                                                 Jeju Island account for 97.2% of the total Jeju workforce. In addition, by employing
                                                                                                 talent graduated from outside Jeju, Daum is also attracting talent to the island.
                                                                                                 In addition, we have expanded the local supply chain by endorsing 20% of construction
                                                                                                 contracts for the GMC and the new office building to Jeju local companies. Our
                                                                                                 community involvement programs also include the “Internet Dolharbang (Make a Wish)”
                                                                                                 program, as well as juvenile education and various cultural events.

                                                                                                 ▶ Daum Service Employment
                                                                                                    (as of the end of 2009)                                                           Jeju staff
                                                                                                                                                                         249 persons (69.2%)

                                                                                                                                                                        Jeju graduates that are
                                                                                                                                                                                      Jeju staff
                                                                                                                                                                         242 persons (97.2%)


                                                                                                                                           Total
                                                                                                                                        employment
                                                                                                                                        360 persons




36
Part 2. Sustainability Core Issues




                                                                                                                                                                  Jeju Office Mini Interview

                                                                                                                                 It has been six years since Daum’s joyful test, the “Jeju Project”.
                                                                                   How are Jeju employees doing with their new environment? Let’s hear from the horses’ mouths.




●                                                                      ●                                                                       ●
Jeong, Bu-hwan,                                                        Park, Joon-seok,                                                        Jeong, Hee-jeong,
member of the Data mining Team, Search Technology Center               team manager of the Customer Service Strategy Team                      team manager, Media Design Team, UXD Center


“I personally prefer the quiet rural life over urban life. That’s      “When we first moved to Jeju, my wife had trouble getting               “Jeju is a special place for me. I got married and settled down
why I find Daum a perfect place for me. However, the Seoul-            accustomed to the new environment. She wanted to work, but              with a baby here! Before marriage, I liked the variety and
centered working processes cause troubles sometimes. For               couldn’t find a decent job that fitted her specifications. After        glamorous Seoul lifestyle. After marriage, however, I prefer life
instance, most back-office functions are centered in the               having our baby, however, she built a community with other              in Jeju. Most of all, I like the clean air and green environment
Seoul area, lacking consideration for employees outside of             families of Daum employees through the company’s “Café”                 here, where my baby can play without me worrying about
Seoul. When we have conferences with Seoul employees that              online community and various other activities. She is busier            car exhausts and car accidents. Even in emergencies, my
continue through and after lunchtime, we are forced to skip            than I am now. I think Jeju offers the perfect conditions to raise      baby is within a quick-driving distance from my work. This is
lunch because there are no other options than the cafeteria            a child, too. The mountains and beaches are just a five-minute          a great relief to me. Many of my colleagues said they would
within the office building. I personally wish that Daum become         drive from home. Going to the nearby astronomical observatory           choose Jeju after marriage, provided that the childcare issue is
the region’s landmark company like Apple or Google in                  on a weekday night is another favorite activity of our family.          settled. I think a workplace daycare center would help improve
California, or POSCO in Pohang. I hope that someday Daum               Jeju life also rendered us with a broad-minded lifestyle, as it         employee engagement. Sometimes, a fear of lagging behind
will become the region’s leading company, and one in which             reduced overspending at shopping malls on the weekends.                 market trends captures me, but it is not a big deal. I can go
employees and local residents can have affection for and take          Instead, we have more time and money for leisure and hobbies.           back to Seoul, whenever I want.”
pride in.”                                                             I think the quality of my life has improved since moving to
                                                                       Jeju. However, we still experience some problems, like child
                                                                       education. We lack a daycare center and other educational
                                                                       infrastructure. I am confident, however, that the company will
                                                                       find solutions to these issues through close communication
                                                                       with its employees.”




●                                                                      ●                                                                       ●
Kang, Soon-jei,                                                        Lee, Ji-yun,                                                            Kang, Mi-ae,
member of the Strategy Planning Team                                   team manager, Service Center Operation 2 Team, Daum Service             member of DB 1 Team Mining Part, Daum Service


“I had to move to Jeju because my whole team moved here.               “I used to work at Daum part-time. When Daum Service was                “After graduation, I intended to find a job in Seoul. However, I
First I was reluctant to move, but I like the life here now as it      established, I joined the company because I found the corporate         changed my mind and joined Daum Service after a presentation
allows me to have more of a personal life. When I was back in          vision was in line with my personal vision. Over the past three         by the company. I was attracted to the corporate culture and
Seoul, commuting took two hours each way, while the process            years working here, I have found that the company is dedicated          passionate people of the company. It was a culture shock to
of eating lunch took the whole hour. But, in Jeju, my drive to         to employees’ career development and competence-building.               me to refer to each other by “Nim” instead of job titles. As
work only takes 20 minutes. Furthermore, by lunching at the            In my case, my friends are surprised to hear that I am taking the       my job requires time-honored skills, it helps my future career
cafeteria, I have more personal time during the break. The quiet       leadership course in my 20’s. Only senior managers are entitled         development. However, I found it strange that Daum and
workplace and natural environment reduces stress and let me            to the course in other companies. The young talent of Jeju, an          Daum Service are closely connected in business, but that
concentrate on my work, definitely enhancing work efficiency.          IT industrial wasteland, places high expectations on Daum. I            there are few opportunities to socialize with each other. If a
The easy and relaxing work environment makes even my                   hope the company can respond well to these expectations. The            communication channel is established, the employees of the
personality easy-going. However, one thing lacking is a social         company should advertise and brag about its strengths to Jeju           two companies will grow more familiar with each other and
life. I can’t meet my friends or enjoy as much cultural activities.”   society.”                                                               more freely exchange information and therefore develop closer
                                                                                                                                               collaboration, generating synergies in work.”



                                                                                                                                                                                                                37
Daum Communications
Sustainability Report 2009




                                                          5
Social
Contributions
Working for the public good in order to
bring changes to the world




Under the mission “bringing joyful changes
to the world,” Daum is involved in diverse                    | Daum Social Contribution Directives |
social contribution projects designed to bring
positive changes to the world. Although
                                                                                                      Next
Daum’s workforce only totals 1,000, the users
                                                                                                Company that cares
of our services reach into the tens of millions,                                                  about the next
                                                                                                    generation
bringing with it considerable social influence
and responsibilities. Our smallest move can
have a formidable impact on the world. Well                                                      “Hope”
aware of our responsibilities as a leading                                                      Creating public value
                                                                          Diversity           towards a more hopeful        Sharing
Internet media company, we make strenuous
                                                                      Company that values              future             Company that
efforts to bring positive changes to the world.                        diversity in society                             spreads the sharing
By constantly exploring public welfare topics                                                                            culture in society

and communicating with our stakeholders, we
are able to realize a sustainable society for all.
Dreaming of hope for the next generation, we
are building a healthier and happier society                  Social Contributions Expenses Breakdown
                                                                                                                                   (Unit: KRW million)
through our social contribution activities.
                                                                                                           2007            2008               2009
                                                              Donations                                    1,676           2,087              1,978
Hyphen                                                        Project expenses                               410             261                 86
http://contributions.daum.net/DaumEng/cont/daumHypen.do
                                                              Total                                        2,086           2,348              2,064



38
Part 2. Sustainability Core Issues




Social Contributions Footprint


                                                                                                                                                                            4
                                                                                                                                                                                     2010~
                                                                                                                                                                                     Dreaming of
                                                                                                                                                                                     sharing hope with
                                                                                                                                                                 Step                Internet users




                                                                                                                  3
                                                                                                                              2007~2009
                                                                                                                              Popularizing                       Sharing Hope Anywhere, Anytime
                                                                                                                              Social
                                                                                                          Step                Contributions



                                                             2
                                                                         2005~2006                                                                               Despite consistent endeavors to continue
                                                                         Searching for the                                                                       “Daumful” social contributions, it is not
                                                                         “Daumful” theme of                                                                      enough to rest on the compliments we receive
                                                  Step                   social contributions             Media Communication + Sharing
                                                                                                                                                                 from stakeholders. We will further expand our
                                                                                                          Value = Donation for Hope
                                                                                                                                                                 social contributions online platform so that our
                                                                                                                                                                 Internet users can easily participate wherever
                                                      Creating public value through                       Since the “Media School,” our media education




         1
                2001~2004                                                                                                                                        they are and whenever they want. Furthermore,
                                                      media                                               projects have brought about significant changes
                Taking the first step                                                                                                                            we will keep communications with users, non-
                                                                                                          throughout society. However, the benefits of these
                into social                                                                                                                                      profit organizations and our employees in order
Step            contributions                         Daum established a department dedicated             projects were confined to a handful of participants
                                                                                                                                                                 to improve the program, and spare no effort
                                                      to social contribution activities in 2005. The      and beneficiaries, not Internet users at large.
                                                                                                                                                                 in creating hope and value for the benefit of
                                                      Social Contributions Department deliberates         There began our exploration for a representative
                                                                                                                                                                 society.
Established a non-profit                              on what social contributions best represent         social contribution platform for promoting the
foundation, a first in the Internet                   the characteristics of the company. Departing       values of the media communication and sharing.
industry                                              from conventional thoughts regarding social         In December 2007, we began our “Donation
                                                      contributions, Daum was looking for more than       for Hope.” The “Donation for Hope: initiative
Daum established the “Daum Foundation,”               simply making donations. Our attention was set      goes beyond donating money, as Internet users
the first non-profit foundation in the Korean         on the needs of the public and bringing hope to     can participate in the entire fundraising process,
Internet industry, in 2001. Funded by Daum            needy people. That is how we became involved        from voting to decide on the objectives of the
employees, the “Daum Foundation” shares the           in the media education projects. Meanwhile,         fund to raising funds. Since then, this innovative
company’s mission of “bringing joyful changes         our “Hopeful Global Villages of Daum”               concept of fundraising has been established as our
to the world” through the intelligent use of          project is our representative social contribution   representative social contribution platform. As part
media. It supports various creative activities        program, and is designed to improve public          of our selection and focus strategy, we ended the
designed to enhance public knowledge of the           understanding of different cultures and bring       offline activities of “Media School” in 2009 as the
media.                                                hope to children in underdeveloped countries.       “Donation for Hope” initiative continues to grow.




Social Contributions Milestones

Sep. 2001 ● Established “Daum Foundation”                                                                 Mar. 2008 ● Entered into an MOU with the Community Chest of Jeju for the “Internet
                                                                                                                      Dolharbang (Make a Wish)”
May 2002 ● The Foundation initiated the “Youth Voice” project, a program sponsoring
                  youth’s media creation activities                                                       Jun. 2008 ● Special screening of “Youth Voice” at the Jeonju International Film Festival

Sep. 2004 ● The Foundation began the online mentoring service, “Tortee”                                   Aug. 2008 ● Raised KRW 201 million, the largest raised online, for the Dokdo
                                                                                                                      Advertisement Fundraising project
Dec. 2005 ● Established the Social Contributions Team
                                                                                                          Oct. 2008 ● Entered into an MOU with the Jeju Office of Education for “Internet Ethics
Dec. 2005 ● Mounted an online campaign for public good
                                                                                                                      Training” and co-hosted the “2008 Clean Information Society Quiz Contest”
Apr. 2006 ● Initiated the “Media School” project for media-excluded people
                                                                                                          Nov. 2008 ● Sponsored the production of the Jeju Olle official Web site
Dec. 2006 ● Completed a “Hopeful Global Village of Daum” in Cambodia
                                                                                                          Dec. 2008 ● Completed 3rd “Hopeful Global Village of Daum” in Bangladesh
Nov. 2007 ● Began a field trip program to the Global Media Center
                                                                                                          Apr. 2009 ● Ended the “Media School” project
Dec. 2007 ● Completed the 2nd “Hopeful Global Village of Daum” in Nepal
                                                                                                          May 2009 ● Co-hosted the “2009 Clean Information Society Quiz Contest”
Dec. 2007 ● Launched the online fundraising service, “Donation for Hope”
                                                                                                          Dec. 2009 ● Completed the 4th “Hopeful Global Village of Daum ” in Vietnam



                                                                                                                                                                                                             39
Daum Communications
Sustainability Report 2009




Sharing Hope with Internet Users


| Making Miracles Come True with Internet Users |                                                    | Join Us for the Public Good! |
The “Donation for Hope” is Daum’s representative social contribution program                         Daum has initiated various campaigns for the public good such as “eHaru616”
that invites customers to participate in the entire process of deciding on the use of                and “Year-end Campaign” to bring joyful changes to the world. The “eHaru616”
funds, including making contributions. The project raise funds not only for social                   campaign calls on Internet users to record all Internet activities for one single
welfare causes but also various other public good that can bring joyful changes                      day, June 16, every year. It is hoped this will serve as a good historic record of
to the society. Users have raised approximately KRW 500 million annually, with                       contemporary Internet culture for future generations. In addition, we promote a
the total amount growing every year. In 2010, we will upgrade the systems and                        sharing culture through various campaigns, such as the “Year-end Campaign” and
procedures of the “Donation for Hope” program in order to expand the scope of                        “Children’s Day Campaign.”
participants and beneficiaries.
                                                                                                     | Join Us for the Joy of Media Communications! |

Fundraising Contributions                                                                                                                           Daum has engaged in various media
                                                                                                                                                    projects through the “Media School”
                                                             2008                         2009                                                      and “Youth Voice” programs. Tapping
Donated amount                                 KRW 510,610,000             KRW 565,920,000
                                                                                                                                                    into Daum’s business capabilities
No. of contributions by Internet users                 647,141                   1,202,972
                                                                                                                                                    as a media portal service provider,
Hope Fundraising Themes                                                                                                                             the “Media School trains digitally
                                                                        (Unit: number of project)
                                                                                                     excluded residents in rural or remote areas how to make movies and UCC. For a
Area                                                         2008                         2009
                                                                                                     year from April 2008, the program helped 23 villages, including those in Jeju make
Domestic living/medical supports                                28                              61
Domestic education/free meals                                   15                              29
                                                                                                     their own films. The “Youth Voice” sponsors juveniles with their media creation
Relief/sponsorship to underdeveloped countries                   7                              17   activities. Daum and the Daum Foundation have collaborated and sponsored a total
Sponsoring overseas residents/emigrants                         14                               5
                                                                                                     of 240 productions to date. Shifting the platform from the offline to online, we
History/sovereignty                                              6                               7
Environmental & life protection                                  4                               7   closed the offline-oriented “Media School” project in 2009. We take pride in the
Culture/ Show/ Sports                                           11                               5   fact that the “Media School” heralded the trend for social media education.
Others                                                           2                              10
Total                                                           87                             141


| Major Activities of the Hope Campaign |

                                     2007                                                                                             2008
                                     Protecting the Utoro Village, a village of                                                       Fundraising for Dokdo Advertisement Cost
                                     drafted Chosun workers
                                                                                                                                      ●Period: July 10, 2008 ~ Sept. 30, 2008
                                     ●Period: Dec. 27, 2007 ~ May 31, 2008                                                            ●Amount: KRW 210,507,973
                                     ●Amount: KRW 26,416,099                                                                          ●Participation of Internet users: 179,956 times
                                     ●Participation of Internet users: 10,847 times                                                   ●Use: running advertisement in the Washington Post and
                                     ●Use: purchase of a landsite for the village                                                       New York Times entitled “Error in NYT”



                                     2009                                                                                             2009
                                     Diversity Campaign-All Different, All Precious                                                   Warming Winter for Korea

                                     ●Period: Nov. 02, 2009 ~ Nov. 25, 2009                                                           ●Period: Dec. 09, 2009 ~ Dec. 30, 2009
                                     ●Objectives: diversity index test and different culture                                          ●Amount: KRW 100,281,129
                                         experiences, etc.                                                                            ●Participation of Internet users: 34,925 times
                                     ●Participation of Internet users: 4,037 times                                                    ●Use: sponsoring and subsidizing underprivileged families
                                     ●Sponsored by the Ministry of Culture, Sports and Tourism,                                         in collaboration with the Community Chest of Korea
                                         and the Daum Foundation



40
Part 2. Sustainability Core Issues




                            Sharing Hopes with Employees


                            | Building Schools for Third World Children |
                            Raising funds from our employees, we have built “Hopeful Global Village of Daum”
                            in Cambodia in 2006, Nepal in 2007, Bangladesh in 2008 and Vietnam in 2009. In
                            2010, we are about to complete the fifth “Hopeful Global Villages of Daum” in Sri
                            Lanka. Having established bonds with local children, our employees visit these areas
                            during their vacations to spend time and share good memories with them.




                            | Building Hope on Small Change |
                            We donate all proceeds from the sales of coffee and tea at our Seoul office
                            cafeteria to various public campaigns, such as helping children in underdeveloped
                                                                                                                           Employees’ Participation in Hope Sharing
                            countries and repairing the damage caused by the Taean oil spill. Our employees                                                                    (Unit: persons)
                            regularly make donations to build “Hopeful Global Villages of Daum” for children               Program                                      2008          2009
                            in underdeveloped countries. We also hold a bazaar every year and donate all                   Regular sponsorship of children at
                                                                                                                                                                         216            246
                            proceeds to the needy people.                                                                  “Hopeful Global Village of Daum ”
                                                                                                                           Participation in bazaars                      183            225
                                                                                                                           Volunteer services including the
                                                                                                                                                                          60             45
                                                                                                                           online mentoring service, “Tortee”
                            | Sharing Sweat, Joy and Care |
                                                                                                                           Participation in cafeteria donations          671            721
                            Daum’s employees serve as mentors to teenagers from low-income families through                Total participation (without overlapping) 728                773
                            the one-on-one consulting program, “Tortee”. We also shoot portrait photos for                 No. of total workforce                        959            954
                            senior residents in remote areas.                                                              Participation rate                           76%            81%



                                                                                                                           Donation by Employees
                                                                                                                                                                       (Unit: KRW thousand)
                                                                                                                                                                      2008            2009
                                                                                                                           Donations by employees                    85,950         99,620
                                                                                                                           (proceeds from cafeteria, bazaar, etc.)




                            ●                                               ●                                                       ●
                            Goodwill Vacation                               Goodwill Bazaar                                         Cafeteria Donation
                            During vacations, employees visit “Hopeful      At the end of each year, employees donate               A cup of coffee comes with a piece of ‘goodwill.
                            Global Villages of Daum” to spend time with     goods for the bazaar, with proceeds going to            Daum’s employees make voluntary donations
                            local children.                                 those in need.                                          whenever they use the free in-house cafeteria.




                                                                                                                                                                                          41
Daum Communications
Sustainability Report 2009




Sharing Hope with Local Communities


|  We are building the joy of sharing and diversity with local
communities |
In the process of our “joyful test” of relocating to Jeju, we have initiated several
programs to realize joyful changes in the Jeju region. Having entered into
partnerships with educational, cultural and welfare groups in the region, we
constantly work to bring joyful changes there. Committed to the welfare of future
generations in the region, we are involved in teenager education programs, as
well as sponsor various projects in order to establish diversity in the regional culture
circle.
One of our major community projects is the “Internet Dolharbang,” an online
make-a-wish project in which Jeju residents post stories of needy neighbors on
the Web site. The Community Chest of Jeju then reviews these and decides on
beneficiaries of the program. This year-round social contribution project encourages
participation by Internet users in helping aspiring local teenagers, the disabled,
multi-cultural families and others in need.
Committed to the education of local teenagers, we entered into a business
partnership with the Jeju Office of Education to provide Internet ethics training
courses. We also co-host the “Clean Information Society Quiz Contest.” The
preliminary round of this quiz is conducted on the Daum Web site every year, while
the main round is offline. In 2009, a total of 10,000 students from Jeju participated
in the event. We also invite students to visit the Daum Global Media Center (GMC)
and help them better understand the working conditions of an Internet service
provider and the Internet itself. A total of 3,000 students participated in the
program in 2009.                                                                                 Jeju Olle official Web site
                                                                                                 http://221.139.0.180:8080/eng/
Daum also sponsors several culture events, such as sports, movie and music festivals.
As a partner to the “Jeju Olle” project, we also sponsored the creation of its official
Web site. In 2010, we sponsored a mentoring program for local teenagers of Jeju
foster families. Our employees also volunteer at teenager camps. Furthermore, we
also sponsored the publication of magazine promoting cultural diversity in Jeju.




✽Children’s music concert                         ✽Children’s Day event for children of foster     ✽Internet Dolharbang
                                                     families in Jeju




42
Part 2. Sustainability Core Issues




Daum Foundation, first non-profit foundation in the Korean Internet industry


                                                                                                                            Daum Foundation
                                                                                                                            http://daumfoundation.org/daumfn/mission_en


                                Founded in 2001, the “Daum Foundation” is a non-profit organization built on the voluntary donations of
                                stock options, bonus, cash, etc. by shareholders, executives and employees of Daum Communications, Corp.
Sharing Daum’s mission of “building a joyful world through the intelligent use of media,” the Foundation supports various initiatives and
creative activities designed to improve public understanding of the value of the Internet and media.




                                                   | Listening to the voices of teenagers through the media |
                                                   The Youth Voice is the representative social contribution brand of Daum Foundation, sponsoring teenagers
                                                   with their diverse and creative activities to voice their opinions in the society. The sponsoring programs include:
                                                   “sponsorship of pre-production,” a media creation support program for the teenagers; “Media Conference,”
                                                   where teenagers can share information and exchange opinions on the media; “Youth Voice Center,” a media
                                                   plaza for local teenagers; and “Frentor,” a peer-mentoring network program.




✽Youth Voice
                                                   | Building a positive future through the IT technologies |
                                                   Established based on the mission of contributing to human society through IT technologies, the “ITcanus” is an
                                                   IT Center that supports non-profit organizations with media and IT technologies. It operates a non-profit media
                                                   conference, “ChangeON,” as well as an “Internet Leadership Program,” “New Media Special Lecture” and
                                                   various other programs. It also provides “media communication funds” and “IT technical support” programs. In
                                                   a bid to create a sound-based communication network, the center also runs a “Sori Archive,” a digital archive
                                                   designed to collect and store audio content for non-profit organizations. The socially responsible web service “Open
                                                   KnowHow” supports collaborations in creating and sharing manuals, knowledge, books and documents that
                                                   have value for public value. Meanwhile the “eHaru616” project records a single day of our Internet activities in
                                                   order to create a record for future generations.

✽ITcanus


                                                   | Realizing diversity in society |
                                                   “Ollybolly” is a project funded by the Daum Foundation to encourage the understanding of different cultures.
                                                   Ultimately, it aims to build a society where different people live in harmony and live creative and different lives.
                                                   It produces and provides online animations of traditional stories from countries including Vietnam, Philippines,
                                                   Mongolia and Uzbekistan for our children. It also sponsors essays on cultural diversity and funds the projects that
                                                   sponsor cultural diversity.



                                                   Ollybolly
                                                   http://www.ollybolly.org/?mid=home&language=en




✽Ollybolly




                                                                                                                                                                    43
Daum Communications
Sustainability Report 2009




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44
Part 2. Sustainability Core Issues




                                                                   ▶▶
                                                                         Economic Performances

                                                                   Daum relies 94% of its sales revenue through                    Growing Popularity of Lifestyle Services
 ▶▶
    Economic Performances
                                                                   advertising and the remaining 6% through various                In 2009, Daum renewed its different lifestyle services,
 Transactional services             Search advertisements (SA)     transactions. In 2009, the sales revenue of search              such as movies, finance, real estate and “Shopping
 6%                                                      51%       advertisements (SA) declined due to the economic                How,” while constantly collecting quality contents
                                                                   recession and changes in search ad contract                     and providing a vast pool of information to users. As
                          2009 Sales                               structure. However, the shopping business achieved              a result, the increased convenience and accessibility of
                                                                   remarkable growth, realizing 17.5% growth in                    these services have attracted Internet users, increasing
                          244,556
                           ▲ 4.5%                                  display advertisement (DA) sales. As a result, overall          the number of unique visitors and our page view count.
                          (KRW million)                            sales improved by 4.5% from the previous year, a
                                                                   historic-high.                                                  Innovative location-based Daum Map service
 Display
 advertisements                                                                                                                    launched
 (DA)                                                                                                                              The advent of Web 2.0 and the launch of the iPhone
 43%                                                               ▶▶
                                                                          Services                                                 heralded revolutionary growth in the mobile Internet
                                                                                                                                   business. In anticipation of this change, Daum has
 Transactional services             Search advertisements (SA)
 6%                                                      56%       Growth in Search Query and Market Share                         pushed forward in developing map service technologies.
                                                                   Tapping into the vast pool of content accumulated over          The Daum Map service has challenged conventional
                                                                   the past several years from providing diverse services to       thought. Our Sky View service which offers 50cm-scale
                          2008 Sales                               our users, we developed our own search engine, thus             airborne pictures and our Road View service, which
                          233,963                                  being able to offer an extraordinary lifestyle experience       provides high-resolution panorama pictures so detailed

                          (KRW million)
                                                                   to our users. In 2009, we introduced “SkyView”—
                                                                   sporting Korea’s highest resolution—and “Road View
                                                                                                                                   that users can see every street corner in Korea, have
                                                                                                                                   created synergies that bring joyful changes to the world.
                                                                                                                                                                                                  >
 Display                                                           (a 360° panorama view service)” through our map search          The combination of these innovative services has enabled
 advertisements
                                                                   service, and therefore upgrading the quality of our             users to virtually experience any given location with a
 (DA)
 38%                                                               service products. In proportion to the growing number           single click, providing vivid images of streets, signboards
                                                                   of Internet users and their dependence on Internet              and road signs. Coupled with various lifestyle information
 ✽Transactional services: content circulation & proceeds
   distribution                                                    search services, their demands for search engine                services, such as famous restaurants in the vicinity of your
                                                                   services become ever more sophisticated. In addressing          search location, tour/leisure information, beauty & health
                                                                   this, we upgraded our integrated search service by              information, car/hobbies, life/shopping, the map service
                                                                   organizing individual contents. As a result, our unified        significantly improves convenience and quality of life.
 ▶▶
      Growing Popularity of Lifestyle Services                     search queries and search market shares continue to             Recently launched on the mobile web, the Daum Map
                                                                   grow.                                                           service has garnered explosive market response.
  Service  Major Improvements
  Movie    • Offering abundant user-oriented content

  Finance  • Reinforcing mutual fund product information                                                                           Taking the initiative in future mobile business
             and providing information on deposit                 No. of unified search queries              Search market share   with advanced strategies
             products that offer highest interest rates           (million)                                                  (%)
                                                                                                                                   In 2009, the mobile Internet business gained the
           • Offering investment information by theme
                                                                 1,600                                                       25
             and objectives                                                                                       23.6%            economy of scale. Having begun preparing for this new
           • Providing economic indicators that put              1,400
                                                                                                                                   Internet environment early, Daum was able to secure an
                                                                                                                             20
             economic developments in perspective, such          1,200                                                             advantageous position in the new market. In step with the
             as stock prices, oil and commodity prices
           • Increasing accessibility and utility by linking     1,000                                                             rapidly growing mobile web market, we have continued
                                                                                                                             15
             with the databases of financial institutions                                                                          to introduce diverse smart phone applications and mobile
                                                                  800
  Real     • Providing real estate information in link with
                                                                                                                                   web services from 2009, while also developing new
                                                                                                                             10
  Estate     our Sky View and Road View services                  600

  Shopping • Offering price comparison services
                                                                                                                                   mobile advertisement models. The differentiated services
                                                                  400
  How        participated by users                                                                                            5
                                                                                                                                   of “Daum Map,” “tvPot,” and “My People” in particular
           • Offering “the SOHO” service, a fashion               200                                                              earned great popularity among smart phone and full-
             information site
                                                                    0                                                         0    browsing phone users. Our mobile ad model, “Mobile
           • Offering “Shopping One” an SSO service for
                                                                                 2007             2008        2009
             online shopping convenience                                                                                           Sponsor,” also enjoys good reviews from advertisers.
                                                                         Source: Korean Click




                                                                                                                                                                                            45
    Daum Communications
    Sustainability Report 2009




    Why are we focusing on mobile service?                                                                            Who is the winner?
                                   Along with rapidly-evolving IT technologies, various                                                               The changing web ecosystem poses both challenge and
                                   services and technologies are converging to generate                                                               growth opportunity to Daum. In proactively embracing
                                   new synergies. The paradigm of the web ecosystem                                                                   change, we have developed a mobile strategy, aiming to
                                   is rapidly shifting from personal computers to diverse                                                             expand our service scope and media from the PC-oriented
         Why                                                                                                             Who
                                   platforms. Most notably, the recent hot issue in the                                                               online portal to various digital media, such as mobile, IPTV,
                                   IT industry is undisputedly the “mobile.” In step with                                                             and digital signage*. In particular, we analyzed global
                                   the development of IT technologies, such as the 3G,                                                                advanced market trends and concluded that the next-
                                   Wi-Fi, GPS and Bluetooth, the popularization of smart                                                              generation screen will be centered on mobile service, and
                                   phones and tablet PCs has brought about drastic                                                                    have therefore been preparing for this.
                                   change in the lifestyles of Internet users and the                                                                 In 2008, we established the Mobile Service Unit (SU)
                                   Internet environment itself, shifting the paradigm from                                                            for the organized propelling of our mobile business
                                   PC to mobile Internet devices. Morgan Stanley forecast                                                             strategies, as well as secured competent developers.
                                   in its “Internet Trends” report published in April 2010                                                            Our unique corporate culture of open communication
                                   that mobile Internet users will outnumber PC Internet                                                              helped develop an efficient cooperative network
                                   users within five years. The global pandemic of smart                                                              among mobile specialists and our existing technicians,
                                   phones, triggered by the iPhone, fed the mobile web                                                                enabling existing services to swiftly be applied to the
                                   ecosystem, causing it to grow at record speed.                                                                     mobile web system.
                                   ▶▶
                                      Global Mobile vs. Desktop Internet User                                                                         Meanwhile, we created a space within our office

                                      Trends (estimate)                                                                                               building to experience new mobile gadgets. In

<                                                                                          (Unit: million persons)
                                                                                                   Mobile users
                                                                                                   PC users
                                                                                                                                                      December 2009, we became the first Korean company
                                                                                                                                                      to distribute smart phones to all its employees, enabling
                                    2,000                                                                                                             mobile offices across the board. As our employees
                                                                                                                                                      were exposed to the mobile web environment in their
                                    1,500                                                                                                             daily work and life, we were able to verify and try new
                                                                                                                                                      mobile services more efficiently.
                                    1,000                                                                                                             Thanks to these strategic preparations, we were able
                                                                                                                                                      to launch the new web service optimized to the mobile
                                    500                                                                                                               Internet environment before anyone else in the market.
                                                                                                                     ✽Digital Signage: a form of      While expanding our mobile platform, which enabled
                                                                                                                       electronic display, such as
                                                                                                                       LCD, LED, digital view or      convenient access to Daum services via the mobile
                                                2007   2008    2009   2010   2011   2012    2013    2014   2015        media pole, etc., that shows   Internet, we continue to develop new business models.
                                            ✽Source: Morgan Stanley,’Internet Trends’                                  information, advertising and
                                                                                                                       other messages
                                                                                                                                                      Behind all these innovative moves and drives could be
                                                 (Apr. 12, 2010)
                                                                                                                                                      found the enterprising spirit and corporate culture of
                                                                                                                                                      Daum.




                      Tv Pot                                                  Daum Map                               Mobile-exclusive messenger, My People                           Daum Sync
      compatible with iPhone, Windows Mobile,                 compatible with iPhone, Windows Mobile,                    compatible with iPhone, mobile web                compatible with Windows Mobile
                       Android                                          Android, mobile web



    46
Part 2. Sustainability Core Issues




How will we take the lead?
                                                                    ▶▶
                                                                         Taking the Lead in the Smartphone                        ▶▶
                                                                                                                                       Broadening the point of contact with users
                                                                         Application Market                                            through the mobile web

                                                                      Under the strong belief that the mobile Internet                 The paradigm changes that we are now witnessing
     How
                                                                      revolution originates in smart phone services, Daum              have been triggered by mobile applications,
Daum’s mobile strategy has a three-pronged                            has concentrated its core strategies on smart phone              especially the innovative Apple’s app store. However,
mission: first, we will take the lead early on                        services. Noting the fact that utility of applications is        we are still faced with limits in regards to interfacing
in the smart phone applications markets;                              especially high during the beginner stage, we have               our numerous contents with applications. In a bid
second, we will create and provide new                                embarked on developing various applications early                to overcome this and expand contact points with
value through services customized to the                              on.                                                              our users, Daum has been proactively increasing

mobile web and mobile gadgets; and                                    As a result, we have developed and launched various              its investment in the mobile web environment.
                                                                      applications exclusively for the iPhone, such as the             Launching the mobile Daum service (m.daum.net), we
finally, we will create a new business model
                                                                      “tvPot” service in December 2008. As of the end of               improved the readability of mobile Internet screens
customized to the mobile environment.
                                                                      July 2010, Daum provides a total of seven different              by optimizing the view for full-browser phones and
▶▶
     What is the reason for shifting from your                        applications for Apple’s iPhone; Daum, My People,                smart phones. This also reduced the data loading
     favorite portal service in a wired environment                   Daum Café, Daum Yozm, Daum Map, T’story and                      speed, thus improving Internet connection time.
     to others in a wireless condition?
                                                                      Daum tvPot.                                                      Having begun with five services at the first launch in
     21.64%                                             22.22%        The “iPhone users’ application preference analysis”              December 2008, our mobile Daum service has now
                                                                      report by KT DigiEco in March 2010 found that                    expanded to 23, including search, mail, map, news,
                                                                      “Daum Map” was the most frequented application
                                                                      by Korean iPhone users. As of July 2010, the “Daum
                                                                                                                                       stock, and Café, as of June 2010.
                                                                                                                                                                                                         >
                                                                      Map” service has maintained top-ranking in the
     6.43%
                                                                      navigation category of at Apple’s “App Store”
                                                         9.94%
                                                                      among Korean applications.
                                                                      Recently launched, the mobile messenger service “My
                                                                      People” and hybrid application “Daum” have also
     22.22%                                             17.54%        garnered good reputations among users. The Daum
                                                                      service for iPhone ranked second among Korean
            User-friendly UI
            Difference in favorite services                           applications in the reference category of the App
            Attractive applications of the wireless service           Store as of July 2010.
            For continuity with the wired services of mail or SNS     In addition, three Windows Mobile applications are in
            Others
            Didn’t shift
                                                                      service by Daum, while further applications are under
                                                                      development for Android applications.
     ✽Source: KT DigiEco, “What influence do smart phones
       have on portal services?” (Mar. 23 ~ 29, 2010)




                   Daum app                                           Daum Yozm                                        Mobile Top                                  Daum Mobile Sponsor
        compatible with iPhone, Andord                      compatible with iPhone, mobile web         compatible with smartphones and full-browser       compatible with smartphones and full-browser
                                                                                                                         phone                                              phone



                                                                                                                                                                                                   47
Daum Communications
Sustainability Report 2009




                                                                                   What do we create?
     ▶▶
          Creating services optimized for the mobile                                         Going beyond the limit of PC-based services, the web
       environment                                                                           ecosystem will witness revolutionary changes in the contact
                                                                                             points with Internet users and content. The paradigm shift
          Ignited by the smart phone, the wireless Internet service was                      to the mobile web will test Daum’s competence in facing
          at first simply a copy of PC-based web services. However,
                                                                                    What     challenges and rewriting the history of Internet. Selection
          Daum has preemptively concentrated on optimizing its services                      and focus on the mobile service will serve as a turning point
          for the mobile environment.                                                        for Daum, allowing it to take the lead in the changing web
          In June 2010, we introduced the “voice search’ service, which                      ecosystem as a sustainable company. As the pathfinder of
          is not available on the PC-based web, considerably improving                       the mobile business, Daum will develop innovative business
          the convenience of our mobile search service. Not only did                         models and services customized to mobile service, thus
          we diversify the input media through the voice search service,                     creating new value. In addition, we will expand our strategic
          but we also plan to link this innovative service to various other                  partnerships with telecommunications service operators,
          services we provide.                                                               device manufacturers, IT developers and research institutes in
          Launched in the same period, the “Daum Code” also provides                         order to promote the development of the mobile business.
          a differentiated mobile service. Daum Code has dumbed                              Throughout all these activities, we will continue our endeavors
          down the QR Code*, which has been difficult to decode, so                          to take the leadership in the mobile environment.
          that anyone can create and read QR codes in various browser
          environments. As a result, anyone can easily create Daum
          Codes by typing in information such as corporate information,

<         store & product information, blog address, guides, images,
          video clips and maps at the Daum Code Service (code.daum.net).
          The created codes are provided in the form of jpg files for
          various utilities, such as name cards, e-mail signatures, blogs,                      D
          Web site, pamphlets and sticker printing.
          Constantly endeavoring to develop various services for
          the mobile environment, we will continue to enhance our
          competitiveness in the mobile business.                                                                                 a
          ✽Quick Response (QR) Code: a matrix barcode (or two-dimensional code),
            consists of black modules arranged in a square pattern on white
            background. The information encoded can be text, URL or other
            data.



          Creating a new business model for the mobile web
                                                                                                                 u
     ▶▶




          In May 2010, Daum introduced its “Mobile Sponsor” service,
          a banner-type advertisement model on the mobile web, a
          first among Korean portal service providers. Exposed via all
          browsers that Daum mobile web service is available on, such                                                                            m
          as Safari, Opera, and Polaris, the advertisements will lead
          viewers to a Web site pre-designated by the advertiser with a
          single click. The exposure on a small-sized screen boosted the
          number of clicks, with a higher concentration than PC-based
          services. As a result, the mobile sponsor price doubled after
          only one month in service. Starting with the mobile sponsor
          service, we will continue to develop various additional models,
          such as search and location ads.



48
Part 3. Key Sustainability Indicators




                                                Daum
                                        Sustainability Indicators




                                           Sustainability Management                    50
                                           Economic Performance                         51
                                           Social Performance_Customers (Users)         53
                                           Social Performances_Advertisers & Channels   54
                                           Social Performances_Employees                55
                                           Social Performances_Suppliers                56
                                           Local Community & Next Generation            56
                                           Environmental Performances                   58
                                           Awards / Associations & Memberships          60
                                           Third Party Assurance Statement              61
                                           GRI (G3) Index                               63
                                           Publication Information                      65




                                                                                             49
Daum Communications
Sustainability Report 2009



Sustainability Management


Corporate Governance

Daum’s Board of Directors is comprised of two inside                  ●2009 Board Meetings Attendance

directors and four outside directors. The amendment                     Meetings                                                                     2007                         2008                           2009
                                                                                                                               No. of    Outside directors’      No. of   Outside directors’         No. of    Outside directors’
to the Articles of Incorporation in 2008 separated
                                                                                                                             meetings    participation ratio   meetings   participation ratio      meetings    participation ratio
the Chairperson position from the CEO. In 2010, an                    BOD meetings (2007, 2008: four outside                       10                 85%             8                97%                6                 92%
                                                                      directors and three inside directors)
outside director was selected as Chairperson, further                 (2009: four outside directors, two inside directors)
improving the independence of the Board. The Board                    Audit Committee (three outside directors)                    4                 100%             4                83%                5                 87%
                                                                      Compensation Committee                                       1                 100%             2               100%                2                100%
of Directors has three subcommittees: the Audit                       (two outside directors and one inside director)

Committee audits financial statements and selects                     Recommendation Committee                                     1                 100%             3               100%                2                100%
                                                                      (two outside directors and one inside director)
outside auditors; the Compensation Committee sets
the limits of compensation to directors and employees;                ●Board of Directors (as of May 7, 2010)
and the Nomination Committee deliberates on the
                                                                                Name           Gender Personal Records                                                                          Committee Membership
appointment and reappointment of directors. The Audit                 Inside    Saehoon Choi,   Male •MBA, Wharton School, University of Pennsylvania
                                                                      directors Chief Executive       •Director of ING Barings
Committee is comprised of all outside directors, while
                                                                                Officer               •CFO, Lycos Korea
the other two Committees are made up of a majority                                                    •CFO, Daum Communications Corp.
                                                                                                      •CEO, Daum Direct Auto Insurance
of outside directors.                                                                                 •Chairman of the Board, Daum Communications Corp.
The General Shareholders’ Meeting capped the annual                                                   •Incumbent CEO, Daum Communications Corp.
                                                                                Hyunyoung Kim, Male •MBA, Sloan Business School, Massachusetts Institute of Technology                          Member of Nomination
compensation to directors and auditor at KRW 2.4                                Chief Business        •Head of e-Marketing Business Division, Daum Communications Corp.                         Committee
billion. Of this, the company paid KRW 0.95 billion in                          Officer (CBO)         •Vice President, Business Development and Corporate Planning, Daum
                                                                                                        Communications Corp.
2007, KRW 1.13 billion in 2008 and KRW 1.29 billion                                                   •Incumbent CBO, Daum Communications Corp.
in 2009.                                                              Outside Peter             Male •Asia Pacific of Cable & Wireless, Regional Director                                       Chairperson of the Board
                                                                      Directors Jackson               •British Virgin lsland Business, Cable & Wireless, General Manager                        Member of the Audit Committee,
During the process of preparing this report, the Board                                                •Current CEO, Asia Satellite Telecommunications                                           Compensation Committee,
                                                                                                                                                                                                Nomination Committee
of Directors recognized the necessity of an established
                                                                                   Jinwoo Kim               Male •Doctorate, Carnegie Mellon University                                         Chairperson of Compensation
mechanism for communicating with shareholders,                                                                   •Current outside director of SBSi                                              Committee
                                                                                                                 •Current professor of Business School, Yeonsei University
employees and other stakeholders. The Board will
                                                                                   Bonchun, Koo            Male •Doctorate, Cornell University                                                  Chairperson of Audit Committee,
also reinforce its governance over core sustainability                                                           •Consultant at McKinsey & Company                                              Member of Compensation
                                                                                                                 •Current CEO, LB Investment                                                    Committee
issues and take control of their performances. The                                 Sujung, Hahn           Female •MBA, Harvard University                                                       Member of Audit Committee,
performance of the Board itself will also be evaluated                                                           •Managing Director, Sony Music Entertainment Korea                             Chairperson of Nomination
                                                                                                                 •Current, Country Manager and Vice President of Asia-Pacific Division,         Committee
from an economic, environmental and social aspect.                                                                EA Korea

                                                                      ✽On May 7, 2010, the Board of Directors elected Peter Jackson as the new Chairman of the Board (prior to him, CEO Choi held the Chairman position).




Shareholder Composition
                                                                                                                                                                                           (As of the end of December 2009)
At Daum, domestic institutional investors and foreign                 Others                                                       Largest shareholder                                Shareholders             Ownership (%)
                                                                                                                                                               Largest shareholder Jaewoong Lee & related            17.7
investors claim the majority of outstanding shares.                   12%                                                                           18%
                                                                                                                                                               & related parties      parties
                                                                                                                                                               Domestic               KB Asset Management              8.2
                                                                                                                                                               institutional          National Pension Service         7.9
                                                                                                                                                               investors              (NPS)
                                                                                                                                                                                      Mirae Asset Global               7.7
                                                                                                                                                                                      Investments
                                                                                                                                                                                      Korea Investment                 2.6
                                                                                                                                                                                      Management
                                                                                                                                                                                      Other institutional            16.8
                                                                                                                                                                                      investors
                                                                      Domestic                                                                                                        Subtotal                       43.2
✽The share ownership is based on the register of stockholders as of   institutional                                                                            Foreign investors                                     27.5
  December 31, 2009                                                   investors                                                         Foreign investors      Others, individual investors                          11.6
                                                                      43%                                                                           27%

50
Part 3. Key Sustainability Indicators




Economic Performance
Economic Performance

Financial Performance

As the pioneer of the Korean Internet business, Daum has sustained robust                        46 billion in operating profit. In 2009, quarterly revenue exceeded a record KRW 70
performances in revenues and operating profit amid the difficult business                        billion, while the annual revenue achieved a 4.5% year-on-year growth to KRW 244.6
environments. Despite the global financial crisis in 2008, the company realized sound            billion. Operating profits slightly dropped to KRW 44.5 billion.
increases in business results from 2007, seeing KRW 234 billion in revenues and KRW



●Major Figures                                                                                   ●Financial Highlights
                                                          (Unit: annual average daily traffic)                                                                           (Unit: KRW million)
                                                      2007            2008             2009                                                            2007           2008           2009

Number of unique visitors                         7,195,955      8,086,483        8,807,062      Total Assets                                       220,875         283,193       297,485
Page views                                      621,131,504    703,594,122      758,220,635      Current Assets                                       87,957        141,677       160,171
                                                                                                 Non-Current Assets                                 132,918         141,516       137,314
                                                                                                 Total Liabilities                                  106,570         108,856        87,915
                                                                                                 Current Liabilities                                  70,407         86,305        77,786
                                                                                                 Non-Current Liabilities                              36,163         22,551        10,129
                                                                                                 Total Shareholders’ Equity                         114,305         174,337       209,570




●Key Financial Ratios                                                                            ●Income Statement Summary
                                                                                    (Unit: %)                                                                            (Unit: KRW million)
                                                      2007            2008             2009                                                            2007           2008           2009
Stability       Debt-to-equity ratio                   93.2            62.4             42.0     Revenue                                            214,508         233,963       244,556
                Equity capital ratio                   51.8            61.6             70.4     Operating Profit                                     51,498         46,011        44,541
                Liquidity ratio                       124.9          164.2            205.9      Net Income                                           15,634         45,934        31,096
Profitability   Operating profit ratio                 24.0            19.7             18.2
                Net profit margin                       7.3            19.6             12.7
                Return on assets (ROA)                  7.1            16.2             10.5
                Return on equity (ROE)                 13.7            26.3             14.8     ●R&D Expenses
                                                                                                                                                                         (Unit: KRW million)
Growth          Revenue growth ratio                    8.8             9.1               4.5
                Operating profit growth ratio          42.9           -10.7               -3.2                                                         2007           2008           2009

                Net income growth ratio                -6.9          193.8             -32.3     R&D Expenses                                         16,421         19,242        23,271
                Total asset growth ratio               -1.9            28.2               5.0    R&D Expenses to Revenues ratio                        7.7%           8.2%           9.5%




●Number of unique visitors / Page views                                                          ●Debt-to-equity ratio / Liquidity ratio
                                                                         758,220,635                                                                                            205.9
                                                703,594,122
                                                                                                                                                       164.2
                             621,131,504                                                                                          124.9
                Page views                                                                                      Liquidity ratio


                                                                              8,807,062                                            93.2
                                                   8,086,483                                           Debt-to-equity ratio
                                  7,195,955                                                                                                              62.4
                                                                                                                                                                                 42.0
Number of unique visitors


 (Unit: annual average daily traffic)                                                             (Unit: %)

                                       2007           2008                        2009                                            2007                  2008                     2009



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Daum Communications
Sustainability Report 2009




Distribution to Stakeholders
The fair distribution of value to stakeholders is as important to Daum as generating                  ●Economic Value Creation & Distribution
                                                                                                                                                                              (Unit: KRW billion)
more value. Characteristically of our business, we maintain close relationships with                                                                                 2007    2008         2009
different stakeholder groups. Our cooperative partnerships with our suppliers helps us                 Creditor             Interest expenses                         4.43    2.77         1.80
create quality service products, which will, in turn, attract more Internet users, and thus            Employees            Wages                                    28.80   35.65        36.95
resulting in a high advertising effect for our advertisers. This virtuous circle of values                                  Stock option expenses                     3.27    4.09         2.18

provides Daum with sustainable values. Throughout this value chain, our employees are                                       Welfare expenses                          8.14   10.10        10.29
                                                                                                                            Training expenses                         1.56    1.83         0.43
the integral part of our endeavors to find solutions to business issues. Consequently,
                                                                                                                            Retirement pay                            1.61    2.50         3.18
the fair and reasonable distribution of value is the overarching issue of the company,
                                                                                                                            Accident insurance / Medical subsidies    0.25    0.31         0.46
as is maintaining sound partnerships with our partners. In 2009, we spent KRW 17.7                                          Subtotal                                 43.63   54.48        53.49
billion creating and strengthening partnerships in services and contents provision.                    Reps & agencies      Advertising agency commission            28.83   29.82        33.76
Daum offers two types of advertisement: display ad (DA) and search ad (SA). As of                      Partners & suppliers Service & contents partnerships          15.90   21.65        17.69

the end of 2009, there are 1,100 DA advertisers and 52,000 SA advertisers totaling                     Local communities Donations                                    1.68    2.09         1.98
                                                                                                       Government           Corporate tax                             1.45   21.89         6.46
53,100. In addition, we also collaborate with seven representative offices (Rep) and
700~800 agencies. In addition to various types of customer satisfaction activities, we
                                                                                                      ●Economic Value Distributed to Employees (Unit: KRW billion)
distribute proceeds from advertisement sales to our Rep and agency partners. In 2009,
we distributed KRW 33.8 billion to Reps and agencies.                                                 Accident insurance / Medical subsidies 0.46
Furthermore, we contribute to local communities and the government through job                        Retirement pay 3.18                                                                  Wages
creation and various community programs as well as taxation.                                          Training expenses 0.43                                                               36.95


                                                                                                      Welfare expenses
                                                                                                      10.29


Credit Ratings
Daum receives credit ratings by the two major Korean credit rating agencies; Korea
Investors Service (KIS) and Korea Ratings (KR). Its recent credit rating is “BBB+”. (evaluation
date: April 20, 2010)                                                                                 Stock option expenses
                                                                                                      2.18
✽BBB grade implies that the company is capable of redeeming debts, but is susceptible to changes in
 future business environments. A “+” or “-“ is added according to excellence within the grade.




Compliance
Sporting 38 million members, Daum is Korea’s big Internet portal service operator. As                 Engagement in Public Policy
a leading corporate citizen, we are fully aware of our social responsibilities and comply             Laws and regulations fall way behind quickly-evolving Internet trends, causing an
with all relevant governing regulations. In compliance with over twenty Internet                      imbalance and gap between regulations and business. Therefore, Daum cooperates
regulations, including the “Act on Promotion of Information and Communications                        with governmental bodies, academia and civic groups to attune the regulations
Network Utilization and Information Protection, Etc,” and the “Copyright Act and                      to better meet Internet business trends. We are engaged in various joint policy
Protection of Communications Secrets Act,” we ensure a safe digital environment for                   groups, such as the Korea Internet Corporations Association, the Korea Internet Self-
our users as well as a stable business environment.                                                   governance organization, the Protection of Privacy Council (PPC), the Korea Internet
As of the end of 2009, Daum is in six legal proceedings regarding copyright and                       Development Council, the Copyright Win-Win Partnership Council and the National
information security, worth a total of KRW 1.2 billion. However, the decisions of the                 DB Forum.
court will not have any significant influence on the company’s financial status. We                   Daum is not involved in any political activities and has not experienced any fines or
will strive to ensure a safer and pleasant web environment that is clear of all types of              legal sanctions due to infringement of fair competition, anti-trust or violation of other
infringement.                                                                                         regulations.



52
Part 3. Key Sustainability Indicators




Social Performance-Customers (Users)


Under the vision of “Life On Daum,” Daum has expanded its contact points with users by developing various platforms, such as its mobile
service, map service and digital view of subway stations. In providing our lifestyle services, we strive to exceed customer expectations. Through
various customized services, our mobile CS center, and various global standard customer service competences, we strive to further enhance user
satisfaction.



24/7/365 Customer Service Center                                                              Customer Satisfaction Surveys
In order for the efficient operation of our Customer Center, we transferred it to our         At Daum, we strongly believe that an Internet service operator must strive for the
subsidiary Daum Service in 2009. The Center’s operations had been outsourced for the          highest expertise and quality in customer service, tantamount to that of financial
past ten years, however, by incorporating it into our in-house operations, it has enabled     institutions and telecommunications service operators. Under this CS philosophy,
us to more efficiently address customer demands. The Center answers customer                  we constantly mobilize various channels to collect customer feedback. Daum has
requests by phone and e-mail around the clock, 365 days a year. Furthermore, when             commissioned external research & consulting agencies with customer satisfaction
replying to our customers’ e-mail questions, we notify them of our response via SMS.          surveys every six months since 2008. Internally, we conduct Happy Calls to our
Our E-mail Service Satisfaction surveys on the customer center operation continue to          customers in order to collect feedback regarding our service.
help us greatly improve service quality.                                                      We ran a total of four surveys on external customer satisfaction between 2008
VOCs received during the Beta service period are relayed to the service officers in           and 2009, with the results improving each time. The 2008 Customer Center
charge for improvement to the service.                                                        Monitoring Survey examined and scored the trouble-shooting ratio, complaint ratio
                                                                                              and convenience of accessing the Customer Center by phone, mail and the web. In
●2009 E-mail Service Satisfaction Survey
                                                                                              particular, we focused on our trouble-shooting performance.. While we focused on
very dissatisfied 8.7%                                                       Very satisfied   our trouble-shooting performance in 2008, we concentrated on improving service
dissatisfied 5.2%                                                                  58.4%
                                                                                              quality in 2009. Meanwhile, we constantly compare our service quality with those of
                                                                                              our competitors. In 2010, we will survey customer satisfaction and customer center
not bad
10.4%                                                                                         service quality simultaneously. By constantly being on the lookout for problems at our
                                                                                              customer service centers, we aim to realize a high quality level of customer satisfaction.




satisfied
17.3%


                                                                                              ●2009 Customer Center Service Quality Analysis                               (Unit: points)
Preventing the recurrence of the same complaint
                                                                                                                                                 Average            Call          Mail
Daum analyzes customer complaints and strives to eradicate them by improving
                                                                                              1H                                                     77.7          67.0            88.5
systems and processes. By reducing the number of complaints through the close
                                                                                              2H                                                     79.2          69.7            88.8
analysis of complaints and solving recurring factors, we reinvest resultant surplus
resources into reinforcing customer services.


Notification of regulations to the creators of hazardous information
In order to protect contents creators’ rights and minimize their complaints, Daum
sends mails to users who post hazardous information, notifying them of regulations
regarding sex, violence, libel, and infringement of copyright, 30 days prior to deleting
the post. Users can make objections to the regulations in this 30 day period. All
objections are reviewed by the Posting Policy Commission, which decides on all issues
regarding deregulations or the restoration of the deleted postings.



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Social Performances-Advertisers & Channels


Daum defines the advertisers, media representatives (rep) and
agencies as key managerial customers. We operate various customer                                                                  Open Advisory Committee
satisfaction programs and constantly strive to upgrade our systems so
                                                                                                The Open Advisory Committee is the embodiment of Daum’s customer-oriented
as to enhance the satisfaction of these corporate clients. Our major
                                                                                                management principle, Client-Centric Daum’s Way (CCDW). Comprised of working-
activities and performances for 2009 are detailed below.
                                                                                                level representatives from media reps, search engine marketers (SEM) and other business
                                                                                                partners of Daum, the Committee consults and deliberates on issues and improvements
                                                                                                in Daum’s advertisement products, systems and business support. The issues raised
Rep Assistant Program & Open Advisory Committee                                                 during the Committee meetings are then quickly provided to all relevant employees
Daum runs the Rep Assistant Program and Open Advisory Committee. The Rep                        for swift feedback. Initiated in late 2009, 11 working-level employees from 7 DA Reps
                                                                                                in partnerships with Daum and 20 working-level representatives from 16 SEMs attend
Assistant Program deploys employees to our client companies for their convenience.
                                                                                                Committee meetings.
During Open Advisory Committee meetings, representatives from reps and agencies
raise issues and suggest improvements to Daum’s service products. This process helps
establish new guidelines in services, realize real-time change and handle inquiries on                                        Open Advisory Committee Activities
the same day they were made. Starting from 2010, we will expand the Rep Assistant
Program to our agency partners, helping us to further minimize the time lag between             ● Meetings and Workshops
                                                                                                  •Regular meetings: monthly
inquiries and answers. In the future, we will strive to minimize customer inconvenience
                                                                                                  •Workshop: once for each of DA and SA partners
through various customer support programs.
                                                                                                  •Agenda-setting: Committee members set the agenda and Daum Present special
                                                                                                       agenda items (e.g.: analysis of any problems in Daum’s advertisement system and audit process)


Search Marketing Center
We recently made the corporate client support systems for our advertisement agencies         ●Major Issues of Corporate Clients

more customer-oriented. Established in October 2008, the Search Marketing Center             Category                     Major Issues
(SMC)   supports SEMs with infrastructure such as office rental and communication            Advertisement                •Need competitive representative products and differentiation strategy

expenses. As of the end of 2009, a total of five companies are nestled in the Center, all    products quality             •Need to expand contact points with advertisement targets (in link with
                                                                                             improvement &                   mobile ads, etc.)
leading stable operations.
                                                                                             strategies                   •Need to reinforce interactive communications with consumers
                                                                                                                          •Need to expand the media power of the Web site and mobile
                                                                                                                             marketing effects
Periodic Customer Satisfaction Survey & VOC System Reinforcement                                                          •Need to develop new indicators to objectively measure the advertising
In 2009, we adopted the Customer Satisfaction Index, which surveys customer                                                  effect
satisfaction on a quarterly basis, in order to quickly solve corporate clients’ complaints                                •Need to simplify the complicated UI of ad products
                                                                                                                          •Need to take a tougher stance on false and exaggerated
and improve the advertising effect and convenience of our services. Starting from
                                                                                                                             advertisements
2010, we further reinforced the voice of customer (VOC) system, increasing face-to-face
                                                                                             Pricing policy               •High advertisement costs stemming from fierce market competition
programs between our business staff and small advertisers in order to better listen to                                    •Discounts for small businesses
their opinions. These efforts will help us reduce the complaints of corporate clients and    Ad purchase                  •Minute process and criteria of review
enable us to collect customer opinions, thus allowing us to provide better services and      and operational              •Need to shorten registry time lag

increase customer satisfaction.                                                              process                      •Need to select and compile ad keywords
                                                                                                                          •Need to improve advertiser information change procedure
                                                                                                                          •Need to prepare an easy-to-use integrated management system
                                                                                                                          •Need to improve customer notification functions (reduced advertising
Understanding major corporate client issues for 2009                                                                         effects, and contract terminations, etc.)
The table below shows the opinions of the majority of our corporate clients received         Communications               •Need to prepare a team dedicated to protecting advertisers’ rights
during the “Year-end Marketing Letter Suggestion Event” we conducted in December                                          •Need to establish interactive communication channels with customers

2009. Committed to a Client-Centric core value, we will keep listening to our                                             •Need to ensure the fast reception and handling of complaints
                                                                                                                          •Need to promote the advertising effect of Internet portals
customers’ voices and improving our organizational and service capabilities.


54
Part 3. Key Sustainability Indicators




Social Performances_Employees


Workforce
In compliance with the Fixed-Term Employment Act, Daum limits part-time                                        ●Workforce Breakdown by Age
employment to only a handful of operating positions. As of the end of 2009, 199, or                            16 persons                                                                      383 persons
21% of, the total workforce, are working at the Jeju office, and 755, or 79%, at the                           (2%)                                                                                  (40%)
Seoul office. Characteristically to our business, young employees in their 20s and 30s
account for 98% of the workforce, with the company having an average age of 30.8
years-old. Another characteristic of our business is a high turnover rate, which we have
significantly reduced over the past several years thanks to continued efforts regarding
job security and programs to retain the best and brightest employees.
To prevent musculoskeletal diseases, which IT business workers who have to sit in the
                                                                                                                                                                                                  20~29
same posture for long periods of time are prone to, we operate various health facilities                       555 persons                                                                        30~39
within our premises, such as an indoor work-out gym, massage room and lounges. As                              (58%)                                                                              above 40

a result, we have steered clear of industrial injuries since 2007.

●Employment
                                                                                             (Unit: persons)   Respecting Human Rights and Eliminating Discrimination
Category                                                 2007                  2008                  2009      Daum upholds innate human rights and eliminates any kind of discrimination, ensuring
Full-timers                                                737                   879                   919     equal opportunities for all its employees. Despite a male-dominant gender proportion,
Part-timers                                                 57                     80                   35     with males taking up 63%, we maintain a high percentage of female workers
Total                                                      794                   959                   954
                                                                                                               compared to other industries. We do not tolerate any gender discrimination in our
Turnover rate                                            14%                    11%                    8%
                                                                                                               recruitment procedures, and the performance-based annual payment system does not
Average service                                           3 yrs      3 yrs 1 month           3yrs 5 months
                                                                                                               discriminate by gender. We also ensure equal opportunities for all employees in regards
                                                                                                               to evaluation, promotion and compensation.
                                                                                                               In support of our female workers career management, we offer 100%-subsidized
Employees Welfare
                                                                                                               maternity leave for childbirth, as well as childcare leave upon their discretion. After
Daum offers various welfare benefits to encourage employees’ self-
                                                                                                               maternity or childcare leave, employees are guaranteed their previous positions.
development, raise morale and improve living stability.
                                                                                                               Daum’s young and open workplace ensures there are seldom incidents of sexual

●Welfare Programs                                                                                              harassment. However, the single case of sexual harassment in 2007 was punished
                                                                                                               with a pay cut. Since then, we have run periodic training sessions to prevent any
                  Category                  Details
                                                                                                               reoccurrence, while constantly monitoring practices through company-wide surveys.
Living            Loan program              •Subsidies to interest on housing loan/lease loan/life
stability                                     stability loans                                                  As a result, there has been no such incident since 2007. Regardless of this impressive
                  Child education support   •Supporting child education expenses                               record, we have established a system and procedures whereby any such incident
                  Group insurance           •Coverage of death, disability and diagnosis of cancer             reported via our hotline shall be followed with appropriate action, such as fact-finding
                  First loss medical        •First loss medical coverage for employees and their               and the forming of a punishment committee. Furthermore, we have not been involved
                  insurance                   parents, spouses and children
                                                                                                               in any legal violations regarding child labor or forced labor. In the future, we will double
                  Condolences support       •Condolences expense, flowers and funeral supplies
                                                                                                               our efforts to set the example for others in terms of ethical management and creating
                  Health Check-ups          •Annual health check-ups for employees
                                            •Biannual health check-ups for families                            a safe and enjoyable workplace.
Self-             Sabbatical leave          •Paid ‘refresh’ leave for long-time employees
development       Cash mileage              •Endowing mileage for self-development expenses                    ●Childcare Leaves
& Fun culture                                 (language courses, travel and leisure, etc.)

support           Club activities           •Subsidizing in-house club activities                              Category                                               2007           2008           2009

                  Goodwill Books            •Monthly book presents to colleagues                               No. of employees on maternity leave                        9             22            26
Others            Smart phone support       •Providing smart phones and subsidizing monthly                    No. of employees on childcare leave                        4              7             7
                                              bills                                                            Ratio of childcare leave to maternity leave           44.4%          31.8%         26.9%
                  Anniversary gifts         •Presenting birthday vouchers                                      Average period of childcare leave                 8.0 months    5.9 months     7.4 months



                                                                                                                                                                                                        55
Daum Communications
Sustainability Report 2009



Social Performances_Suppliers


Systems for transparent and ethical purchasing practices
Committed to win-win business partnerships with our suppliers, Daum continues to            ●Anti-Corruption System

strive for transparent and trustworthy transactions. In 2006, we moved the entire           Category                 Details
purchasing team to our Jeju office as well as adopted an e-purchase system in 2007,         Hotlines                 Anonymous report of irregular or unfair transaction practices
thus minimizing unnecessary meetings with suppliers. In October 2007, we declared           E-Purchase System        Computerization of the entire process of procurement in link with
the Code of Ethics for Purchasing Practices, reiterating our employees’ dedication to                                e-purchase system and e-contracting system
                                                                                            Integrity provision in   Provision of damage liquidation and civil & criminal liabilities in case
eradicating corruption in all transactions. All contracts stipulate integrity provisions,
                                                                                            contracts                of violation of the integrity provision
preventing any illegal practices or bribery or entertainment between employees and
suppliers. If suppliers report any violation of these practices, we protect them from any   ●Win-win Partnerships with Suppliers
disadvantages in future transactions.
                                                                                            Category                 Details
Through these efforts and commitment, Daum has not been subject to any kind of
                                                                                            Cash payment             All payments have been in cash since 2000
guide or sanctions resulting from the annual paper survey of our suppliers by the Fair      Purchase Boucher         In instances when the supplier needs emergency financial aid,
Trade Commission to date. There has been no case of any irregular contract or order-                                 Daum processes bills even before the settlement date provided in
placement, the irrational termination of contracts or any other illegal practices. Or,                               the contract, as well as helping the supplier get paid by the bank in
                                                                                                                     advance.
there has been no incident with suppliers in this matter.
                                                                                            Supplier biddings        New and existing suppliers can bid for commodities, contents,
                                                                                                                     machinery and services through the corporate Web site and
                                                                                                                     e-purchase system any time.
                                                                                            Supplier Workshops       Daum holds workshops every year-end for suppliers with excellent
                                                                                                                     performance records, addressing their complaints and suggestions
                                                                                                                     for improvement




Local Community & Next Generation


Daum engages in various social contribution programs: Donation                              ●Donations
                                                                                                                                                                        (Unit: KRW million)
for Hope, Daum Foundation, employees’ volunteerism, community                               Category                                                2007             2008             2009
programs for Jeju region, and cultural, artistic and sports sponsorships.                   Donation                                                1,676           2,087            1,978
The details of our social contribution activities are provided in the                       Project expenses                                          410              261               86
Issue 5 section on page 38. The table below details the figures.                            Total                                                   2,086           2,348            2,064




Community Programs for Jeju
The relocation of Daum to Jeju brought about a sensational change in the region
where agriculture and tourism were previously the main revenue streams. Our presence
has added one claim to the region, that of being an ideal location for IT businesses.
Daum expects that it can contribute to the local economy, create jobs and foster and
attract the best and brightest to the region. Through various programs offering cultural
experiences to local residents, we aim to exist as a corporate citizen of this exotic
island.


56
Part 3. Key Sustainability Indicators




●Community Programs for Jeju

 Program                        Sponsorships                                                                  Performances
 •   Daum Track                 •   Industrial-academic cooperative course at the Computer Science            •   Scholarships totaling KRW 20 million every year from 2007 to 2009
                                Department of Jeju University
 •   Internet Dolharbang        •   Internet users apply for sponsorships and subsidies for needy neighbors   •   Supporting commodities and supplies worth KRW 17.23 million in 2008 and KRW 16.46 million
                                in Jeju                                                                        in 2009
 •   Visit Daum                 •   Schools and universities, businesses and organizations                    •   7,405 persons in 2008 and 5,286 persons in 2009 visited Daum GMC
 •   Safe Information Society   •   Schools in Jeju                                                           •   24,231 students in 2008 and 11,175 students in 2009 participated
  Quiz Contest


Offering our “Café” services to digitally-excluded people
Dedicated to helping those in the digital inclusion and information inclusive society, Daum                   Category                                                                               No. of Cafés
has established its “E-Village Café” to help them build digital communities. The E-Village                    E-Village Café                                                                                 868
Café is a digital community service that updates users of the developments and news in                        E-Military Café                                                                              4,900
rural areas, increasing public interest in these regions and serving as the marketing tools
for these regions’ specialties. Furthermore, our “E-Military Café” promotes communication
internally and externally, helping them cultivate solidarity and unity.




Cultural & Artistic Sponsorship
Daum contributes to expanding the artistic and cultural infrastructures through various                       Program                         Descriptions
sponsorships. Opened in 2007, the Culture Lounge provides cultural experiences to                             Culture Lounge                  Offering annual cultural event experiences to more than 20,000
more than 20,000 winners of our event every year, while providing normal people with                                                          users (open in 2007)
opportunities to experience arts and cultural events Every year, we support more than                         Cultural contents               Supporting more than 100 media clips every year with marketing

100 media.                                                                                                    sponsorship                     consulting, online advertising and events of contents
                                                                                                              Film festival sponsorship       Providing advertising sponsorship and comprehensive customer
Clips with marketing consulting, online advertising and events of contents, contributing
                                                                                                                                              services, such as the building of a moving contents database and
to small production companies becoming independent and cultivating their marketing
                                                                                                                                              linking with Daum’s service products, thereby contributing to the
skills. At the same time, our sponsorship of several film festivals, both small and large,                                                    diversification and popularization of movie contents
contributes to the development of the nation’s movie culture. Not only do we sponsor
advertisements, but also provide comprehensive customer services, such as building a
database of moving content and links to Daum’s service products, thus contributing to
the diversification of moving contents and popularizing film festivals.



Sports Sponsorship                                                                                            Sponsorships                    Details

Committed to the development and promotion of the national sports sector, we work                             Korean national team            Since 2005, we have supported the soccer team at the World

to establish an influential platform for sports, in order to communicate the ideals of                                                        Cup Games and Asian Games, sponsored World Cup matches,
                                                                                                                                              professional player charity auctions and online hookups for all
sports players to our users. Most notably, we have been sponsoring the Korea Soccer
                                                                                                                                              major matches.
Team since 2005 and the Korean Olympic Committee and National Delegate Teams
                                                                                                              V-League                        Sponsored the V-League for three consecutive years since 2006,
since 2007, as well as the national pro volleyball league, V-league, since 2006. For the                                                      provided online hookups and promoted the V-league online
development of the K3 League, Daum has been providing sponsorships under the title                            K3-League                       K3-League Title Sponsorship (2007~2011), Sponsorship of Bucheon
“Daum K3 League” since 2008, as well as the Bucheon FC1995 football team launched                                                             FC1995 (since launch on Dec. 1, 2007)

in 2007. We also maintain partnerships with several football clubs in the K-League, such                      K-League football clubs         Incheon United (2005), FC Seoul∙ Busan I’Park Football Clubs
                                                                                                                                              (2006~2010), Suwon Samsung Blue wings (2007), etc.
as Incheon United, FC Seoul, Busan I’Park and Suwon Samsung Blue wings.


                                                                                                                                                                                                               57
Daum Communications
Sustainability Report 2009



Environmental Performances


Daum has sporadically responded to environmental issues before preparation of this report. In the course of preparing this report, however, we
came to knowledge the importance of an organized response to the planet’s environmental changes. Therefore, we will assume the following
three basic policies in our response to environmental issues. First, in light of the growing social issue of increased electricity consumption due to
Internet use, we plan to replace our IT equipment with green products so as to reduce electricity use and CO2 emissions. Second, we will look for
solutions to reduce energy use and pollutant emissions from all our offices. Third, we will work to raise social awareness of environmental issues
and provide communication tools for brainstorming countermeasures. In line with these policies, we will detail our action plans and double our
efforts to minimize any environmental impact, as well as collaborate with users in order to protect the planet and the environment.


Green IT & Energy Consumption Reduction
We will start with introducing green IT equipment and improving the Internet Data                                     ●Energy Consumption by Daum IT Infrastructure

Center (IDC) environment, two of the easiest and most efficient methods an Internet                                                                                                2007            2008           2009*
portal company can undertake for environmental management. In that vein, we aim                                        YoY Change                                                  30%             35%              -1%
to reduce any increase in electricity use to less than 20% in 2010 from 2009. The
                                                                                                                      ✽Measurement subject: servers, storage, network switches and other IT devices operated within the IDC
estimated growth for this period is 30%.                                                                              ✽The energy consumption growth rate slightly declined thanks to the introduction of new equipment in
                                                                                                                       2009, the recycling of IT resources and improving efficiency in IT operations.


Promoting the use of low-power IT equipment and green devices
Daum adopted low-power CPUs, saving up to 40W per server. In the future, we
will expand the use of low-power CPUs and adopt new models, such as SSD, as
well as discover a new and improved structure environment for single power supply.
Purchasing green-labeled products such as ROHS* is another way of protecting the
environment that we are currently reviewing.

✽ROHS (Restriction of Hazardous Substances Directive): the EU regulations that restrict the use of electronic goods
or electric devices using or containing hazardous substances                                                          Maximizing thermal efficiency management by improving the IDC cooling
                                                                                                                      system
Efficient redeployment of IT resources through a real-time server control                                             We have improved the thermal efficiency of the IDC by more than 20% through the
system                                                                                                                rearrangement of the layout. The redesigning of the server room was a long-term
Daum has developed an in-house program that monitors server traffic on a real-                                        project, spanning three years from 2004 to 2006. In consideration of the thermal
time basis. Constantly monitoring IT resources, this program minimizes idle resources                                 stream between the hot aisles and cold aisles, we ensured enough spaces between
and efficiently redeploys resources according to usage. In 2009, we redeployed                                        face-to-face server racks and improved the air flow below server racks, preventing
approximately 2,000 pieces of equipment, thus reducing the need for new investment                                    overheating. The cablings on the back of servers were also readjusted so as to better
and reducing electricity use.                                                                                         circulate the servers’ thermal stream.




Green Office: Minimizing Energy Use
Realizing a paperless office
It is safe to say that Daum indirectly protects forests, as it enables paperless offices                              ●Electronic Authorization
                                                                                                                                                                                                            45,165
through its Internet services. We adopted an electronic authorization system in
                                                                                                                                                                                  43,536
2005, replacing roughly 40,000 paper documents per annum. We are also currently
                                                                                                                                                       42,012
reviewing an e-fax system.
                                                                                                                        (Unit: cases)

                                                                                                                                                         2007                      2008                       2009



58
Part 3. Key Sustainability Indicators




Reducing transportation carbon emissions through a video conference
system                                                                                    Video conference device use                     Effects
Daum encourages a video conference system and multi-party call system in order            14,400 hours                                    - Saving costs of KRW 4.6 billion
to reduce business transportation and resultant carbon emissions. In particular, we       (5 hours/day, 20 days/month)                    - Reducing 1,600,000kg of CO2 emissions
have equipped our Seoul and Jeju offices with 12 and 9 video conference systems,
                                                                                         ✽The data above is estimate based on a two person business trip with a round-trip air fare of KRW
respectively, in a bid to reduce business trips between the two main offices. The         160,000 per meeting.

company also supplies multipoint control units (MCU) to facilitate video conferences
anytime. Furthermore, we provide IP phones to all our employees in order to remove
any communication barriers.


                                                                                         ●PC power-saving system

Reducing electricity use with power-saving PCs                                                                 113.2kWh
                                                                                                                                                                          34%
With the working environment becoming digitalized, the use of servers and personal                                                                                       saved
computers has grown proportionately, and therefore causing a rise in energy
                                                                                                                                                           74.4kWh
consumption. At Daum, about 1,267 laptops and 1,966 PCs are in operation. This is
a rate of approximately three computers per employee. Committed to a green office,         ✽estimate from preliminary
                                                                                            simulations
Daum has therefore expanded the use of low-power IT devices, as well as adopted
power-saving systems on PCs, monitors, hard disks and networks. At the same time,                                        Electricity use by PC prior           Electricity use by PC with
                                                                                                                            to the Green CPM                        the Green CPM
the company encourages employees to participate in energy-saving campaigns to
reduce electricity consumption. According to preliminary simulations, the Green CPM,
introduced in May 2010, reduces energy consumption by roughly 34% annually.
                                                                                         ●Kerosene Use at GMC

                                                                                                                   75,450
Reducing air-conditioning expenses through renovation of interior design                                                                                  -10%
                                                                                                                                                                                     -17%
The enormous amount of digital devices within the office caused tremendous heat
                                                                                                                                                 67,940
release and hindered air flow. We approached this problem with interior design
                                                                                                                                                                          62,958
solutions rather than air-conditioning solutions. In 2007, we placed hydroponic plants
above the spaces of partitions, thus controlling indoor humidity and improving air
                                                                                           (Unit: liters)
quality. The glass walls of our GMC in Jeju are coated to insulate from the powerful
                                                                                                                               2007                       2008                       2009
sunlight, thus controlling the indoor temperature. At the same time, we set the air-
conditioning temperatures at 25.5°C in summer and the heating temperatures at
24.5°C in winter, reducing our annual energy consumption.


                                                                                         ●Driving-to-work Ratio
Discouraging employees from driving to work                                                                                                                                         61.6%
                                                                                                                                                          57.8%
Many Daum employees drive to work. In particular, the vicinity of our Jeju office
                                                                                                                               54.5%
lacks public transportation. As a result, the number of employees driving to work has
exceeded 60%. Therefore, the company has adopted a 10-day rotation system and                                                                                                       15.2%
                                                                                                                                                          13.6%
weekday no-drive day program, as well as operating shuttle buses to and from work                                               9.5%
                                                                                                   Jeju
and encouraging employees to use public transportation.
                                                                                                   Seoul

                                                                                                                               2007                       2008                       2009




                                                                                                                                                                                            59
Daum Communications
Sustainability Report 2009




Reducing disposable cup usage                                                                Environmental Campaign with Internet Users
Daum consumes approximately 1.1 million disposable cups every year. In participation
                                                                                             As an Internet-based business operator, Daum causes little environmental influence
with our uses, our campaign entitled, “Reduce Paper, Save Forest,” mounted in 2010,
                                                                                             from its business activities. However, we believe we can contribute to environmental
encouraging employees to use personal mugs. Approximately 900 of our employees
                                                                                             protection by not only reducing our impact on the environment but also raising public
volunteered for the campaign, resulting in a 30% decrease in disposable cup usage.
                                                                                             awareness regarding environmental issues and inducing them to reduce energy
In a bid to spread this campaign to our suppliers, we presented them with mugs. In
                                                                                             consumption.
the future, we will review adopting a system to impose environmental penalties on the
                                                                                             Therefore, we have collaborated with environmental NGOs for a number of campaigns,
use of disposable cups, expand the campaign to reducing paper towel usage and seek
                                                                                             from the “Replacing paper bills with e-bills” initiative in 2002 and the “Reduce Paper,
other ways to reduce everyday paper usage.
                                                                                             Save Forest” initiative in 2010. The “Reduce Paper, Save Forest” campaign has awoken
                                                                                             the public to issue of deforestation as well as introduced various paperless lifestyles.
                                                                                             Since 2009 we have been operating the “SESE Nara Program” in collaboration with
                                                                                             the Korea Energy Management Corporation (KEMCO). SESE Nara is a community for
                                                                                             children and teenagers designed to allow them to participate in energy-saving, such
                                                                                             as planning renewable energy usage and participation in various other volunteer
                                                                                             programs in order to address global warming. As of June 2010, a total of 62 units
                                                                                             nationwide are active at our online Café service as guardians of the planet.




Awards                                                                                       Associations & Memberships

Date          Awards                                          Authority                      Mobile Web 2.0 Forum (http://www.mobileok.kr/eng/forum1/purpose.php?)
June 2007     Best corporate governance prize among           Korea Exchange (KRX)
                                                                                             Korea Fair Competition Federation (http://www.kfcf.or.kr)
              KOSDAQ-listed companies
                                                                                             Korean Business Council for the Arts (http://www.mecenat.or.kr/)
Nov. 2007     Cyber IR prize at the 2007 Hankyung IR Awards   Korea Economic Daily
Dec. 2007     User rights protection category at the 8th      Korea Internet Corporations    Korea Internet Advertising Deliberation Organization (www.kiado.kr)
              Internet Company of the Year                    Association
                                                                                             Korea Internet Corporations Association (www.kinternet.org)
                                                              Korea Journalist Association
                                                                                             Internet Marketing Council of Korea (www.imck.or.kr)
Dec. 2007     2007 Korea Great Workplace Awards – ‘Funny      GWP KOREA
              Workplace’                                      JoongAng Daily                 Korea Internet Self-governance Organization (www.kiso.or.kr)
June 2008     Best corporate governance prize among           Korea Exchange (KRX)
                                                                                             Korea Association Information & Telecommunication (http://www.kait.or.kr/eng/index.jsp)
              KOSDAQ-listed companies
                                                                                             Consortium of CERT (http://www.concert.or.kr)
Dec. 2008     KCC presidential prize at the 9th Internet      Korea Internet Corporations
              Company of the Year                             Association                    Chief Privacy Officers’ Forum (http://ccpoforum.or.kr)
                                                              Korea Journalist Association
                                                              Korea Communications
                                                              Commission
June 2009     Best corporate governance prize among           Korea Exchange (KRX)
              KOSDAQ-listed companies
Nov. 2009     Excellent prize at the 2009 Korea IR Awards     Korea IR Service
Nov. 2009     Grand prize in the mobile web portal category   Korea Internet Professional
              and grand prize in the mobile web innovation    Association
              category at the Web Award Korea 2009



60
Appendix




Independent Assurance Statement


Scope and objectives                                             of interest to stakeholders and could affect Daum                            strategy.
Daum Communications commissioned Two Tomorrows                   Communications, alongside a review of peer company                           Ultimately, the success of Daum Communications’
(Asia) Limited to undertake independent assurance of its         reports in the relevant industry and a media review;                         sustainability strategy will depend on 1) the company’s
2009 Sustainability Report (the ‘Report’).                      • Review of the relevant industry’s material sustainability                   ability to raise awareness of various stakeholders regarding
The assurance process was conducted in accordance with           issues as identified by the assurance team and Daum                          social, environmental and wider economic development
AA1000AS (2008). We were engaged to provide moderate             Communications’ stakeholder survey and materiality test                      challenges; 2) providing a forum for engagement, debate
level, Type 1 assurance, which includes evaluation               to determine assurance priorities;                                           and information sharing to encourage relevant discussion
of adherence to the AA1000APS (2008) principles of              • Interviews and conference call with 2 outside Board                         around sustainability; 3) expanding the business case for
inclusivity, materiality and responsiveness (the Principles).    Directors including the Chair of the Board of Directors,                     sustainability to seek solutions to these challenges based
We undertook no checking of sustainability performance           and 5 top management team members including the                              on Daum Communications’ core service and capability;
data and consequently offer no assurance over                    CEO. Two Tomorrows was free to choose the focus                              and 4) enhancing Daum Communications’ brand
performance data or associated claims included in the            areas for interviews and the interviewees;                                   positioning as a sustainable company.
Report. Although we did check that financial data               • Review of information provided to us by Daum                                In this light, the various activities of the Daum Foundation
from the separate Annual Report had been consistently            Communications on its reporting and management                               need to be consistently aligned with the efforts of
reproduced in the Sustainability Report, any claims              processes, relating to the Principles, through operational                   addressing key sustainability issues to support successful
relating to financial information are excluded from the          level interviews;                                                            implementation of Daum Communications’ sustainability
scope of this assurance process.                                • Review of supporting evidence for key claims using the                      strategy.
We have also conducted an independent assessment                 Global Reporting Initiative (GRI) G3 Indicator Protocols as
of Daum Communications Reporting against the B+                  a tool.
Application Level for the Global Reporting Initiative (GRI)                                                                                   Inclusivity concerns the participation of stakeholders in
G3 Guidelines                                                   Findings                                                                      developing and achieving an accountable and strategic
                                                                We reviewed and provided feedback on drafts of the                            response to sustainability.
Responsibilities of the directors of Daum                       Report and where necessary changes were made. On
Communications and of the assurance providers                   the basis of the work undertaken, nothing came to our                         • Daum Communications has already adopted
The directors of Daum Communications have sole                  attention to suggest that the Report does not properly                         good stakeholder engagement practices within the
responsibility for the preparation of the Report. In            describe Daum Communications’ adherence to the                                 overall management approach. These include the
performing our assurance work, our responsibility is to         Principles.                                                                    operational decision making process through ‘open
the management of Daum Communications. However                  We have confirmed that the GRI indicators referenced                           user committees’, the ‘Information Security Advisory
our statement represents our independent opinion and            in the GRI index pages are reported either partially or                        Group’ for users, the ‘Open Consultation Committee’
is intended to inform all of Daum Communications’               fully, and explanations are given for the indicators not                       for advertisers, the sales channel, and various initiatives
stakeholders. We adopt a balanced approach towards all          reported. In our opinion the reports meets the criteria                        cooperating with governmental bodies and NGOs. In the
of Daum Communications’ stakeholders.                           within the GRI G3 guidelines to an application level of B+.                    future, we would expect to see further enhancement of
We were not involved in the preparation of any part                                                                                            stakeholder inclusivity through more direct stakeholders’
of the Report. We have no other contract with Daum              Observations                                                                   engagement in the company decision making process
Communications and this is the first year that we have          Without affecting our assurance opinion we also provide                        to allow more in-depth discussion on the identified
provided the independent assurance.                             the following observations.                                                    material sustainability issues.
Our team comprised MinGu Jun, project leader, InMog             During the report development process Daum                                    • We recommend that Daum Communications utilize
Yang, JoongJae Kim, and SangMook Park and this                  Communications identified the sustainability strategy                          various stakeholder engagement channels at the
assurance statement was prepared by the team in                 as one of the 3 key strategies to support the company                          operational level to identify concerns of key stakeholders
English, and reviewed and signed off by Jason Perks, a          mission of ' Bringing Joyful Changes to the World', and                        such as investors and users. Daum Communications
Two Tomorrows Group Director. Individual competencies           the vision of 'Life On Daum' (allowing customers have easy access              might also consider establishing more proactive
relating to the team can be found at: www.                      to Daum Communications’ services, all of which are designed to bring joyful    engagement methods such as an official stakeholder
twotomorrows.com.                                                                         We have found that that Daum
                                                                changes to their daily lives.).                                                panel. Feedback from these stakeholders should then be
                                                                Communications has established robust infrastructure for                       prioritized and utilized to inform the implementation of
Basis of our opinion                                            implementing the sustainability strategy and underlying                        the corporate sustainability strategy.
Our work was designed to gather evidence with the               management mechanisms to promote a more sustainable                           • In the future, we recommend that Daum Communications
objective of providing moderate level assurance as              society with Daum Communications’ core business                                establish and implement an official stakeholder
defined in the AA1000AS (2008). We undertook the                capacity. Especially, we commend Daum Communications                           engagement process to drive continuous improvement
following activities:                                           for utilizing the accountability principles of inclusivity,                    and adherence to the inclusivity principle. This
• Identification of the sustainability issues that are          materiality and responsiveness to define the sustainability                    stakeholder engagement process should clearly identify


                                                                                                                                                                                                       61
Daum Communications
Sustainability Report 2009




 which issues are significant to which stakeholders.             organisation responds to stakeholder issues                    sustainability in Daum Communications. Establishing this
• In this year’s reporting process, Daum Communications                                                                         formal management team will be essential to support
 commissioned a stakeholder survey and utilised the              • Daum Communications demonstrates a good practice             stronger sustainability governance at the board level on
 results to structure the Report. In the future, this activity    approach to governance by assigning an outside                key sustainability issues, coordinate sustainability activities
 should be performed to reconfirm and prioritize material         Director as the Chair of the Board of Directors. However,     of various divisions, collect and manage sustainability
 issues and communication channels.                               there is room to improve the governance structures            performance data, and ensure successful implementation
                                                                  for sustainability within the company. First, Daum            of the company’s sustainability strategy.
                                                                  Communications should establish ultimate role and
Material issues are those which are necessary for                 responsibility on key sustainability issues at the board
stakeholders to make informed judgments concerning                level. Second, Daum Communications should establish a                                        Two Tomorrows (Asia) Limited
Daum Communications and its impacts.                              CR committee reporting to the Board of Directors. Finally,                                                Seoul, Korea
                                                                  Daum Communications should consider establishing and                                                    19th Aug 2010
• Daum Communications utilised an external party to               operating a stakeholder panel to provide feedback to the
 undertake the identification and prioritization of material      Committee and Board.
 issues and then used the results to structure the Report.       • Daum is committed to providing communication
 In the future, we recommend that the materiality process         opportunities to raise awareness on environmental
 be conducted by internal, operational staff with input           issues as part of the company environmental strategy.
 from external stakeholders. Embedding materiality                Given Daum Communications’ business offering,
 as an operational process will enable more effective             we believe that there is additional value for Daum
 integration of the materiality process with corporate risk       Communications to raise awareness of its users on
 management, ensuring regular update of key issues to             environmental issues and to provide a field of discussion
 and review by the top decision making bodies within the          for solutions to broader societal environmental
 company.                                                         concerns rather than focusing on the company’s own
• The issue of ‘Enhancing the value of Internet’ is one of        operational impact on environment. In the future, if
 the key sustainability issues of Daum Communications             Daum Communications goes beyond current campaign
 and it is appropriate for Daum Communication to                  activities and provides a forum within its key service area
                                                                                                                                                     Jason Perks
 provide significant focus on this issue in the Report.           to enable engagement of users for discussion, debate
                                                                                                                                                     Project Director
 However, this is also a very broad topic and the Report          and action on environmental issues, we believe that the
 would likely benefit from greater structure around               brand positioning for sustainable development of Daum
 specific issues within ‘The Value of the Internet’. Greater      Communications will be greatly enhanced.                                           MinGu Jun
 detail would allow more detailed discussion and allow           • Daum reports on various efforts to reduce operational                             Project Leader
 the Report to include issues such as building a sound            impacts on the environment including the adoption of
 web ecosystem through openness, communication and                environmentally friendly IT equipment, the construction
                                                                                                                                                     InMog Yang
 engagement, improving accessibility for the disabled,            of an environmentally friendly new office building in Jeju,
                                                                                                                                                     Lead Associate
 bridging the digital divide, and enhancing the value of          and efforts to reduce energy and material usage. Despite
 the internet by enabling discussion, cooperation and             this success, we recommend that these efforts should
 innovation to address broader social responsibility and          be reported through quantifiable indicators, such as the                           JoongJae Kim
 sustainability challenges.                                       level of greenhouse gas emissions, to allow monitoring                             Associate
• As the materiality process in Daum Communications               of environmental performance and enable management
 matures, some sustainability issues that are discussed in        to determine the success of the company’s climate
                                                                                                                                                     SangMook Park
 the Report will likely be deemed less significant in the         change strategy.
                                                                                                                                                     Associate
 future. To maintain consistent and comparable reporting,        • For the successful implementation of the sustainability
 we recommend that less material issues be discussed              strategy, performance indicators should focus on
 using dedicated web pages. The Report should maintain            key sustainability issues. We recommend that Daum
 its focus on the top priority sustainability issues.             Communication develop measurable, practical,                   ✽Two Tomorrows (Asia) Limited trading as Two Tomorrows was formed
                                                                                                                                  from the merger of Csrnetwork and Sd3 in January 2009, Two
                                                                  quantifiable or qualitative targets and report performance
                                                                                                                                  Tomorrows is an international consultancy that helps companies to
                                                                  trends against them.                                            perform better and create value by doing business in a sustainable way.
Responsiveness concerns the extent to which an                   • Currently there is no dedicated team for managing              www.twotomorrows.com




62
Appendix




GRI(G3) Index
                                                                                                      GRI G3 Guidelines Application Level & Reliability of Report
                                                                                                      This report has been prepared according to GRI G3 Guidelines, and
                                                                                                      Daum declares its application level at B+ and obtained a third-party
                                                                                                      assurance on this level.


● Full     ◐ Partial     ◇ Not Applicalble

   No.        Description                                                                                                                                                Reference Extent of Reporting
Strategy and Analysis
   1.1        Statement from the most senior decision-maker of the organization                                                                                                5           ◐
   1.2        Description of key impacts, risks, and opportunities.                                                                                                          5, 21         ◐
Organizational Profile
   2.1        Name of the organization.                                                                                                                                       8-9          ●
   2.2        Primary brands, products, and/or services.                                                                                                                      8-9          ●
   2.3        Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.                                     8-9          ●
   2.4        Location of organization’s headquarters.                                                                                                                        66           ●
   2.5        Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant
              to the sustainability issues covered in the report.                                                                                                              9           ●
   2.6        Nature of ownership and legal form.                                                                                                                             50           ●
   2.7        Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).                                                         45, 52        ●
   2.8        Scale of the reporting organization.                                                                                                                           51, 55        ●
   2.9        Significant changes during the reporting period regarding size, structure, or ownership.                                                                         –           ◇
   2.10       Awards received in the reporting period.                                                                                                                        60           ●
Report Parameters
   3.1        Reporting period (e.g., fiscal/calendar year) for information provided.                                                                                        cover         ●
   3.2        Date of most recent previous report (if any).                                                                                                                    –           ◇
   3.3        Reporting cycle (annual, biennial, etc.)                                                                                                                       cover         ●
   3.4        Contact point for questions regarding the report or its contents.                                                                                              cover         ●
   3.5        Process for defining report content.                                                                                                                           10-13         ●
   3.6        Boundary of the report (e.g., countries, divisions, subsidiaries, leased joint ventures, suppliers). See GRI Boundary Protocol for further guidance.           cover         ●
   3.7        State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope).                                   cover         ●
   3.8        Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect
              comparability from period to period and/or between organizations.                                                                                              cover         ●
   3.9        Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied
              to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from,
              the GRI Indicator Protocols.                                                                                                                                   cover         ●
   3.10       Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement
              (e.g.,mergers / acquisitions, change of base years / periods, nature of business, measurement methods).                                                          –           ◇
   3.11       Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.                                        –           ◇
   3.12       Table identifying the location of the Standard Disclosures in the report.                                                                                      63-64         ●
   3.13       Policy and current practice with regard to seeking external assurance for the report.                                                                          61-62         ●
Governance, Commitments, and Engagement
   4.1        Governance structure of the organization, including committees under the highest governance body responsible for specific tasks,
              such as setting strategy or organizational oversight.                                                                                                50                      ●
   4.2        Indicate whether the Chair of the highest governance body is also an executive officer.                                                              50                      ●
   4.3        For organizations that have a unitary board structure, state the number of members of the highest governance body
              that are independent and/or non-executive members.                                                                                                   50                      ●
   4.4        Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.                                  29, 50                    ◐
   4.5        Linkage between compensation for members of the highest governance body, senior managers and executives (including departure arrangements),
              and the organization’s performance (including social and environmental performance).                                                                 50                      ◐
   4.6        Processes in place for the highest governance body to ensure conflicts of interest are avoided.                                                      50                      ◐
   4.7        Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization’s
              strategy on economic, environmental, and social topics.                                                                                              50                      ◐
   4.8        Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental,
              and social performance and the status of their implementation.                                                                              6-7, 16-20, 38-39, 58            ●
   4.9        Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental,
              and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards,
              codes of conduct, and principles.                                                                                                                    50                      ◐
   4.10       Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental,
              and social performance.                                                                                                                              50                       ◐



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Daum Communications
Sustainability Report 2009




     No.     Description                                                                                                                                             Reference Extent of Reporting
     4.11    Explanation of whether and how the precautionary approach or principle is addressed by the organization.                                                    21            ●
     4.12    Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.   20, 52, 60        ●
     4.13    Memberships in associations (such as industry associations) and / or national / international advocacy organizations in which the organization              60            ●
     4.14    List of stakeholder groups engaged by the organization.                                                                                                   10-13           ●
     4.15    Basis for identification and selection of stakeholders with whom to engage.                                                                               10-13           ●
     4.16    Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.                                                 10-13           ●
     4.17    Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded
             to those key topics and concerns, including through its reporting.                                                                                        10-13           ●
Disclosure on Management Approach (DMAs)
             Disclosure on Management Approach EC                                                                                                                     6-7, 45          ◐
             Disclosure on Management Approach EN                                                                                                                       58             ◐
             Disclosure on Management Approach LA                                                                                                                       29             ◐
             Disclosure on Management Approach HR                                                                                                                       55             ◐
             Disclosure on Management Approach SO                                                                                                                     38-39            ◐
             Disclosure on Management Approach PR                                                                                                                       16             ◐
Economic
     EC1     Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and
             other community investments, retained earnings, and payments to capital providers and governments.                                                        51-52           ●
     EC7     Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation.                     35-36           ◐
     EC8     Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind,
             or pro bono engagement.                                                                                                                                 16-17, 36         ◐
     EC9     Understanding and describing significant indirect economic impacts, including the extent of impacts.                                                    16-17, 36         ◐
Environmental
     EN3     Direct energy consumption by primary energy source.                                                                                                        59             ◐
     EN5     Energy saved due to conservation and efficiency improvements.                                                                                             58-59           ◐
     EN7     Initiatives to reduce indirect energy consumption and reductions achieved.                                                                                 59             ◐
     EN26    Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.                                                   60             ◐
     EN29    Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations,
             and transporting members of the workforce.                                                                                                                 59             ◐
Social: Labor Practices and Decent Work
     LA1     Total workforce by employment type, employment contract, and region.                                                                                       55             ◐
     LA2     Total number and rate of employee turnover by age group, gender, and region.                                                                               55             ◐
     LA7     Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.                                       55             ●
     LA10    Average hours of training per year per employee by employee category.                                                                                     30-31           ◐
     LA13    Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership,
             and other indicators of diversity.                                                                                                                       50, 55           ◐
     LA14    Ratio of basic salary of men to women by employee category.                                                                                               55              ●
Social: Human Rights
     HR4     Total number of incidents of discrimination and actions taken.                                                                                             55             ●
     HR6     Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor.         55             ●
     HR7     Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of
             forced or compulsory labor.                                                                                                                                55             ●
Social: Society
     SO3     Percentage of employees trained in organization’s anti-corruption policies and procedures.                                                                30-31           ◐
     SO4     Actions taken in response to incidents of corruption.                                                                                                     30-31           ●
     SO5     Public policy positions and participation in public policy development and lobbying.                                                                       52             ◐
     SO6     Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.                                 52             ●
     SO7     Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.                                        52             ●
     SO8     Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.                               52             ●
Social: Product Responsibility
     PR1     Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products
             and services categories subject to such procedures.                                                                                                       21-24           ◐
     PR2     Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products
             and services during their life cycle, by type of outcomes.                                                                                                21-24           ◐
     PR5     Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.                                                 53-54           ●
     PR6     Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion,
             and sponsorship.                                                                                                                                           24             ●
     PR8     Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.                                               23             ◐
     PR9     Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.                52             ●



64
Appendix




           Publication Information
           Publication company | Daum Communications Corp. Publisher | Saehoon Choi Sustainability Report
           TFT at Daum | Eunjoo Kong (TFT leader), Jaman Koo, Seungyul Kim, Yoonsup Kim, Ji-in Kim, Hyunmyung Kim,
           Daeyoung Park, Joonseok Park, Sungjoon Bae, Yongjei Sung, Euichul Shin, Minho Ahn, Byonghoon Ahn, Jiyeon
           Oh, Shimna Youk, Jungha Yun, Hoyoung Yun, Sunghyuk Lee, Jongkeun Lee, Junhyung Lee, Jeeyoon Lee,
           Jinhwa Lee, Hyejung Lee, Jinseok Lim, Yeonjoo Jeong, Wooseok Jung, Jieun Chung, Hyeseung Jeong, Yongseok
           Choi, Jeonghye Choi, Dongheon Han, Seungwan Han, Hyunchul Han                  Third-Party Assurance | Two
           Tomorrows Planning & Writing, Designing | Communications Dong-Gam Printing | Youngeun Graphics




                                                                     Daum Communications’ 2009 Sustainability Report was printed on eco-
                                                                     friendly paper using soy oil. In the future, Daum will further expand
                                                                     environmental management to minimize any environmental impact.




                                                                                                                                      65

				
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