Some history first: Korean portal company Daum is one of the biggest in the country, and last year, bought out Lycos US (which own Wired News, among other properties here).

Now comes the news that the dominant Korean telecom company KT might be looking to buy Daum, and sell its stakes in KTF, KT’s mobile unit, overseas to secure funds to merge with it.

KT has denied any such moves, but many observers consent that it makes sense for KT to take over a Web portal as the preparation for landline-wireless convergence services in a competition with its archrival SK Telecom, Korea’s top wireless carrier.

Daishin Securities economist Kang Lok-hee concurs that Daum is the only viable M&A goal for KT among Korea’s top three Internet entities: NHN, Daum and SK Communications.