Naver still running the show


Naver Corp., South Korea’s top Internet content service operator, continues to flex its muscles by increasing its share of the country’s search-engine market, thereby remaining unperturbed by the recently approved Daum-Kakao merger.Naver seized 76.69 percent of South Korea’s search-engine market in July, which eclipsed its 2013 monthly figures that fell below the 75 percentage threshold, according to data gathered by market tracker Nielsen KoreanClick Co., Ltd.

As shown below, Naver’s smaller competitor Daum Communications Corp. posted a share of 19.89 percent, whilst US titan Google Inc. only managed to secure 2.06 percent of the market. Zum.com, a search-engine service offered by Seoul-based ESTsoft Corp., held 1.21 percent.

It is the first time this year that Daum’s market share will be poised below 20 percent. The data is based on the number of queries made on each search engine.

Although one should not underestimate the merger between Daum and Kakao Corp., the operator of South Korea’s popular Kakao Talk, it seems evident that the spotlight has not completely shifted from Naver.

In many ways, Naver benefited from first-mover advantage within the search-engine market: in Naver’s initial years, South Korea had spent billions of won on Internet infrastructure but there was a severe lack of Korean language content. Naver therefore pioneered a system whereby it crowd-sourced information from its users through blogs and ‘Knowledge Share’ Q&A forums. Hence, Naver became the host of both of these sources of information, and its search results were met with Naver-generated content or on Naver-hosted websites. It was a case of almost exclusively-promoted internal traffic.

Nonetheless, one current area of concern for Naver may be the fact that its own free messenger service LINE commands a far weaker foothold within the South Korean market, compared with that of Kakao. LINE has over 450 million global users, which seems impressive against Kakao’s 152 million international users; however, LINE has only attracted approximately 10 million South Korean users. Furthermore, Kakao may gain significant edge over its rival in this area, once the merged company Daum-Kakao is launched.

Overall, whether or not Google can ever threaten Naver’s dominion within South Korea, or whether the Daum-Kakao merger will rock the boat, will certainly make the next few years an immensely interesting one for Internet market watchers.