AI might threaten search advertisement market, however provides chance

A.I. is a threat to the search ad market but an opportunity for us, says South Korea's Naver

Revealed: The Secrets our Clients Used to Earn $3 Billion

The NaverCorp site set up on a screen in Gimpo, South Korea onSept 9, 2021.

SeongJoon Cho|Bloomberg|Getty Images

While expert system chatbots like ChatGPT present a hazard to the search advertisement market, South Korean web giant Naver sees the increase of AI as a chance for the business.

Naver is South Korea’s most utilized online search engine, according to Statista, commanding a 61.2% market share of month-to-month active users. In contrast, the ever common Google has a 28.55% market share in the nation.

AI-powered chatbots like ChatGPT present a hazard to online search engine as they have the ability to offer responses to users’ concerns straight, rather of providing a list of web pages that the user needs to check out to discover a response.

This might result in a quicker search procedure for the user– presuming all the details provided is appropriate.

If less individuals utilize online search engine, that would result in a decrease in search advertisement profits, typically the biggest profits stream for their operators. In 2022, Alphabet produced over 57% of its profits, or $162 billion, from Google searches alone.

While Naver, like Google, likewise mainly runs an online search engine, it likewise has other organization systems, such as its material platform Naver Webtoon and multimedia mobile application Snow, fintech arm Naver Pay and an e-commerce platform in Naver Shopping.

Speaking to CNBC’s Chery Kang in South Korea, Naver CFO Kim Nam-Sun states AI will be a “huge opportunity” for each of its services, “whether it’s boosted search [results], whether it’s [an] boosted shopping experience, whether it’s fintech and even when it pertains to Webtoon suggestions, and even Webtoon illustration tools.”

He thinks that AI will just reinforce Naver’s offerings, explaining that “AI is something that’s not foreign to us, but it’s very important to each of our businesses.”

In regards to the user experience, Kim states an AI-powered Naver would imply a boosted search experience, shopping experience in addition to travel suggestions for users.

He thinks that Naver is the biggest go-to website in regards to travel schedule 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 revenues discussion, Naver exposed that the business is set to release its “hyperscale AI” item, called HyperCLOVA X this summer season. The business stated it would “provide generative AI-driven search for users and new customized services for enterprises.”

Over the very first quarter, the business’s sales increased 23.6% year-on-year to 2.28 trillion won (1.72 billion), however its net revenue toppled 71.2% to 43.7 billion won compared to the very same duration in 2015. Operating revenue stood at 330.5 billion won, a 9.5% boost year-on-year.

Shares of Naver were trading 1.93% greater on Tuesday, structure on their 5.56% gain Monday after the business launched lead to the early morning.