Naver Corp website projected on screen in Gimpo, South Korea, September 9, 2021.
Seong Joon Cho | Bloomberg | Getty Images
While AI chatbots like ChatGPT pose a threat to the search ad market, South Korean web giant Naver sees the rise of AI as an opportunity for the company.
Naver is the most used search engine in South Korea, in line with Statista, with a 61.2% market share of monthly energetic users. Against this, the ubiquitous Google has a 28.55% market share in the country.
AI-powered chatbots resembling ChatGPT pose a threat to search engines because they’re able to answer users’ questions directly, fairly than presenting an inventory of web pages that the user must browse to seek out the answer.
This may result in a faster search process for the user – assuming all information provided is correct.
If fewer people use search engines, it would result in a decline in advertising revenue on search engines, which are sometimes the largest income for his or her operators. in 2022 Alphabet generated over 57% of its revenue, or $162 billion, from Google searches alone.
While Naver, like Google, also primarily operates search, it also has other business units resembling the Naver Webtoon content platform and Snow multimedia mobile app, the Naver Pay fintech arm, and the Naver Shopping e-commerce platform.
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Chatting with CNBC South Korea’s Chery Kang, Kim says AI shall be a “huge opportunity” for any of her firms, “whether it be augmented search [results]whether it is [an] an enhanced shopping experience, whether it’s fintech and even Webtoon recommendations and even Webtoon illustration tools.”
He believes that artificial intelligence will only strengthen Naver’s offering, declaring that “artificial intelligence is no stranger to us, but it is very vital to every of our firms.”
By way of the user experience, Kim says an AI-powered Naver would mean improved search, shopping, in addition to travel recommendations for users.
He believes that Naver is the largest site to search for travel plans. “So to the extent that AI can actually enhance the experience, I feel it’s a game changer for the user.”
In its first-quarter results presentation, Mr. Naver revealed that the company is set to launch a “hyperscale AI” product called HyperCLOVA X this summer. The corporate said it would “provide users with AI-powered generative search and recent customized enterprise services.”
In the first quarter, the company’s sales rose 23.6% year-on-year to 2.28 trillion won (1.72 billion), but its net profit fell 71.2% to 43.7 billion won in comparison with the same period last 12 months 12 months. Operating profit was 330.5 billion won, up 9.5% year-on-year.
Naver shares traded 1.93% higher on Tuesday, constructing on a 5.56% gain on Monday after the company posted results this morning.