Korean portals cautious about ChatGPT in Korea

Korean portals are showing caution in their adoption of Microsoft’s integration of ChatGPT into its search engine. While some are hailing it as an “iPhone moment,” due to its ability to provide more sophisticated responses to queries, the technology may not be adopted as quickly in Korea.

According to Internet Trend, Naver dominated the Korean search market in 2022 with 61.2% of the market share, followed by Google with 28.55% and Daum with 4.83%. Naver CEO, Choi Soo-yeon, announced earlier this month that the company will introduce its “SearchGPT” in the first half of the year, specializing in queries in Korean. However, the conversational chatbot will run as a standalone beta service, instead of being integrated into Naver’s search engine.

Naver’s cautious approach is due to its unique role as a portal platform, which is different from pure search engines like Google. Naver offers a wide range of functions and services, including blogs, online forums, shopping, webtoons, reservations, news, maps, payments, and even real estate brokerage. This allows Naver to leverage data from its various functions for its search results, helping to increase overall traffic and offering targeted advertising alongside the results.

However, the integration of a ChatGPT-like tool into Naver’s search engine could disrupt the existing ecosystem, and the company is working to maintain its current structure in delivering query results. Connecting as many search users as possible with Naver’s services is critical, as its non-search features, such as shopping, content, and payments, generate significant income. In 2022, Naver’s commerce business brought in 1.8 trillion won ($1.4 billion) in sales, 21.9% of the total, while its content service and music streaming reported 1.3 trillion won.

Another concern is advertising, as it remains unclear how the chatbot-like system will effectively display advertisements, which are a key source of Naver’s revenue. Showing ads in the results itself could harm the credibility of the system.

Jeong Yong-jei, an analyst at Mirae Asset Securities, said that while ChatGPT-like services have limitless potential as software, they cannot replace current search engines. The conversational chatbot is best suited for queries related to knowledge and information, but has limited capability in handling inputs related to shopping. The analyst also noted that disinformation could be a factor that could delay or block ChatGPT’s deeper penetration.

Naver has deployed its advanced language models, such as HyperClova, in limited services, with a Korean-focused dataset that is 6,500 times larger than OpenAI’s GPT-3. On the other hand, Kakao, the operator of Daum portal and KakaoTalk messenger, will bring its Ko-GPT, based on the GPT-3 model, to specific services such as a virtual assistant for KakaoTalk. Instead of directly competing with global companies, Kakao will focus on vertical AI services through Kakao Brain’s Ko-GPT. The size of investment in AI will remain the same, according to CEO Hong Eun-taek.