A.I. could threaten search ad market, but South Korean tech giant Naver also sees an opportunity

While synthetic intelligence chatbots like ChatGPT pose a risk to the search advert market, South Korean web big Naver sees the rise of AI as a possibility for the corporate.

Naver is South Korea’s most used search engine, based on Statista, commanding a 61.2% market share of month-to-month energetic customers. In distinction, the ever ubiquitous Google has a 28.55% market share within the nation.

AI-powered chatbots like ChatGPT pose a risk to search engines like google as they can present solutions to customers’ questions straight, as an alternative of presenting an inventory of webpages that the consumer has to flick through to seek out a solution.

This might result in a faster search course of for the consumer — assuming all the knowledge introduced is appropriate.

If fewer folks use search engines like google, that will result in a decline in search advert income, typically the biggest income stream for his or her operators. In 2022, Alphabet generated over 57% of its income, or $162 billion, from Google searches alone.

While Naver, like Google, additionally primarily operates a search engine, it additionally has different business models, corresponding to its content material platform Naver Webtoon and multimedia cell software Snow, fintech arm Naver Pay and an e-commerce platform in Naver Shopping.

Speaking to CNBC’s Chery Kang in South Korea, Kim says AI will probably be a “huge opportunity” for every of its companies, “whether it’s enhanced search [results], whether it’s [an] enhanced shopping experience, whether it’s fintech or even when it comes to Webtoon recommendations, or even Webtoon illustration tools.”

He believes that AI will solely strengthen Naver’s choices, stating that “AI is something that’s not foreign to us, but it’s very important to each of our businesses.”

In phrases of the consumer expertise, Kim says an AI-powered Naver would imply an enhanced search expertise, procuring expertise in addition to journey suggestions for customers.

He believes that Naver is the biggest go-to website by way of journey itinerary searches. “So to the extent that AI can actually better that experience, I think it’s a game changer for the user.”

In its first-quarter earnings presentation, Naver revealed that the corporate is ready to launch its “hyperscale AI” product, named HyperCLOVA X this summer time. The firm mentioned it could “provide generative AI-driven search for users and new customized services for enterprises.”

Over the primary quarter, the corporate’s gross sales rose 23.6% year-on-year to 2.28 trillion gained (1.72 billion), however its web revenue tumbled 71.2% to 43.7 billion gained in contrast with the identical interval final yr. Operating revenue stood at 330.5 billion gained, a 9.5% enhance year-on-year.

Shares of Naver have been buying and selling 1.93% larger on Tuesday, constructing on their 5.56% achieve Monday after the corporate launched ends in the morning.