Yahoo! Inc. will shut its South Korea operations at the end of this year as chief executive Marissa Mayer focuses the company's resources on stronger units globally.

The Seoul-based operations "faced challenges" that had held back the company worldwide, Sunnyvale, Calif.-based Yahoo said Friday in a Korean-language statement emailed by a public relations agency hired by the company to represent it in the Asian country.

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Mayer became the company's fifth CEO in four years in July to take on the challenge of luring back users that have switched to Google Inc.'s search site and social services offered by Facebook Inc. and Twitter Inc. In South Korea, Yahoo faced local rivals led by NHN Corp. in the market for online advertising sales.

"It makes sense for them to pull out of Korea," Kim Jin Gu, a Seoul-based analyst at NH Investment & Securities Co., said by phone. "People don't use Yahoo much here and it's not generating much traffic. There's no reason for them to stay in this Far East Asian market."

Yahoo, which opened its Seoul office in 1997, has less than one percent market share in South Korea, where more than 90 percent of Web-search queries are handled by search engines run by NHN and Daum Communications Corp., according to Kim.

Daum said Friday it will stop using an online search- advertising service offered by Yahoo's Overture Services Inc. after its contract expires next year. NHN has said it will cut the U.S. company off in 2010.

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Former Google executive Mayer named Henrique de Castro, formerly with Google, as operating chief this week after appointing Ken Goldman, formerly of Fortinet Inc., as chief financial officer in September. Mayer herself has been in the role three months.