Captured image of Hangame website as of July 8

With the split of NHN and Hangame, Lee Joon-Ho, the chief operating officer (COO) at NHN who led the company's search service technology flourish, is said to be leaving NHN and it seems like Korea's "dinosaur portal" Naver will be facing some unavoidable transformations.

Furthermore, the split will likely be damaging NHN's cash-generating structure since Hangame was one of the company's main source of cash.

According to the industry on the 8th, many portals have been facing stagnant growth due to rapidly changing internet environment and NHN recently has been following the steps.

NHN's operating profit rate (unit: %, source: NHN)

The total sales of NHN were 2.38 trillion won in 2012, in which profit was over 700 billion won, however its annual profit has been decreasing.

NHN's operating profit rocketed 76 percent in 2005, 74.6 percent in 2006, and 69.7 percent in 2007. However its profit dropped 8.3 percent in 2009, 14.2 percent in 2010, 11.9 percent in 2011, and 6.3 percent in 2012.

Some analysts say that the independence of Hangame as NHN Entertainment on August 1 is a result of NHN's attempt for dramatic change threatened by its stagnant growth.

However, NHN still has many issues to be solved.

NHN's main revenue come from Hangame and keyword search advertising. Lee Joon-Ho is the creator of NHN search engine and is one of the prominent experts in the field of keyword search technology. The breakaway of COO Lee Joon-Ho refers to the split from Chairman Lee Hae-Jin, bringing upheaval to the portal industry.

COO Lee Joon-Ho's career performance

Meanwhile, some experts predict that KakaoTalk might transform into a mobile portal.

Former NHN key figures of search technology are returning to KakaoTalk. Choi Byung-Yeob, one of the search expert who worked for NHN from 2001 to 2009 moved to Daum to SK Planet, and has left SK Planet back in May.

An official said, "It's very natural that KakaoTalk is evolving as a mobile portal. KakaoTalk is dominating Korean mobile market and it might develop as a portal that threatens Naver."