The competitive landscape of South Korea's portal and platform market, historically dominated by Naver and Kakao, is undergoing a transformation centered around artificial intelligence (AI) technology. The focus is shifting from traditional keyword searches and traffic acquisition to integrating large language models (LLMs) and AI agents into existing platforms.
According to the IT industry on June 17, AI company Upstage has recently entered the domestic portal and platform market by acquiring Daum's operator, AXZ, and the AI agent platform Timely. Upstage plans to enhance its AI-driven portal service competitiveness by integrating its own LLM, Solar, with Daum's search and content assets.
With Upstage's entry, the longstanding duopoly of Naver and Kakao in the domestic portal and platform market faces potential disruption. Naver has established itself as the largest portal operator in South Korea, leveraging its search, shopping, and content services, while Kakao has expanded its influence through its mobile messaging service, KakaoTalk, which boasts 45 million monthly active users.
Once a leading portal, Daum's presence diminished under Kakao's ownership since the 2000s. However, the integration of Upstage's LLM technology presents an opportunity for Daum to reestablish itself as an AI-driven portal platform.
Industry sources indicate that the domestic platform market is evolving from a focus on keyword input to context understanding based on AI agents. Traditional portal services reacted to user queries through search, while AI agent platforms are designed to comprehend user intent and perform tasks ranging from search to recommendations and purchases. In this context, each company's LLM has emerged as a key technology to retain users on their platforms and increase engagement time and frequency.
Upstage's strategy aims to transition from being solely an AI model company to a platform operator by combining portal and agent services. Kim Sung-hoon, CEO of Upstage, stated at a press conference on June 16 that the competition in generative AI is shifting from 'chatbots' to 'AI agents' that perform actual tasks. Upstage believes it can enhance AI-driven portal services by integrating Solar with Daum's language data from news, searches, and comments.
Naver and Kakao are also accelerating their transition to AI agents. They leverage their established platform ecosystems and user infrastructure to present a comprehensive solution that spans from search to task execution.
Naver's strategy focuses on integrating its existing services—search, shopping, and payments—into an AI-enhanced user experience. Since last year, Naver has been strengthening its 'AI Briefing' service, which utilizes the AI language model HyperCLOVA X to go beyond keyword-based searches and understand user intent in natural language queries, connecting users to recommendations, exploration, and purchasing stages.
Kakao is concentrating on transforming its mobile messenger KakaoTalk into an AI agent platform this year. Its 'AI onboarding' strategy aims to seamlessly introduce 50 million users to AI services within the familiar environment of KakaoTalk's chat interface.
Kakao believes its mobile-based platform strategy enhances its competitiveness in a market dominated by web-based agents. Since KakaoTalk is a service where users do not need to enter a separate search bar, it can naturally integrate AI into conversations, recommendations, gifting, and content consumption. Kakao is also developing next-generation models optimized for its AI agent platform, such as Kanana 2.5, and focusing on improving learning costs and inference speed with the Kanana Tokenizer to strengthen lightweight AI models.
An industry insider remarked, "As AI agents become commonplace, competition for services optimized for the Korean language environment in the domestic search and platform market is becoming increasingly important. The competition will hinge not just on technological prowess but on who can first prove a monetization model that translates into actual revenue and business success."
* This article has been translated by AI.
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