Its a word emotion/emotional(이모션) and icon(아이콘) combined. It refers things such as :) , XD , ^0^ and so on. In addition, 이모티콘'이' 뭐에요? is grammatically correct. Cheers.

What is the emoticon? Emoticon = 이모티콘 The pronounciation of 'emoticon' is written as 이모티콘 in Korean. It's similar to bus. We don't have word for bus so we just use the pronounciation of 'bus' in Korean which is 버스.