Yahoo will close down its Korean office at the end of this year, the web portal said Friday. Yahoo's Korean website will remain open until the end of the year and then be redirected to the U.S. service.

Yahoo was the most popular web search engine in the 1990s, when the Internet was just catching on in Korea. But it was overtaken in 2000 by the domestic web search portals Daum and Naver and continued to drop in popularity. Its current market share is less than 1 percent.

The fatal blow came, experts say, when Daum and Naver cancelled their contracts in late 2010 with Overture Korea, Yahoo's web search marketing subsidiary, which served as a solid cash cow.

Yahoo in a press release said its Korean operations have faced "challenges" for several years and that it would pull out of Korea to allocate more resources to the "long-term growth and success" of its global business.