Naver recorded a market share of over 70% in the domestic internet search market for the first time in seven years. It is interpreted that the increase in search share is due to the rise in domestic news consumption amid the impeachment political situation. In contrast, Kakao's Daum has seen a decrease in search market share, attributed to a deepening phenomenon of news readers gravitating towards Naver.
According to Internet Trend, a website analytics firm, Naver recorded a market share of 70.63% in the domestic internet search market as of the 1st of this month. This marks the first time since 2018 that Naver has achieved a market share in the 70% range. Following President Yoon Suk-yeol's declaration of martial law on Dec. 3 last year, Naver's market share in the domestic search market surged by 10.57% over the past two months. Meanwhile, Daum recorded a share of 2.36%, which is a decrease of 0.11 percentage points compared to early December last year.
According to Lee Jeong-heon, a lawmaker from the Democratic Party affiliated with the National Assembly's Science, Technology, Information, Broadcasting and Communications Committee, traffic to Naver news surged by 1,320% compared to normal highs during the time of the martial law declaration on Dec. 3 last year. This increase in news consumption was reportedly spurred by the news of a sitting president being arrested and the rising exchange rate.
Naver is currently focusing on securing news readers using artificial intelligence (AI). Naver is running a service called 'AIRS' that recommends new content based on news consumed by existing users. It also provides a summarization bot service that extracts the content of articles concisely using AI algorithms. Choi Soo-yeon, the CEO of Naver, previously stated that this year's AI-generated content summary feature, called 'AI Briefing,' will be applied to all services.
In the case of Daum, the increasing dependence on domestic news from Naver seems to have resulted in a lack of benefit. After experiencing an increase in news consumption following the impeachment political situation last December, Daum managed to regain its position as the third-largest player in the domestic search market from Microsoft (MS) Bing, but its market share is currently on the decline again.
This trend is expected to be reflected in the portal's performance for the fourth quarter of last year. According to securities firms including Samsung Securities, Naver's revenue from its portal business, referred to as the 'Search Platform,' is expected to be 1.0436 trillion won, representing a 12.4% increase from the previous year. In contrast, Kakao's revenue for the fourth quarter last year in its 'Portal Business' sector, centered around Daum, is predicted to be 84.5 billion won, which is a 4.1% decrease from the same period a year earlier.
Last month, Daum revamped its application (app) for the first time in nine years to increase user influx. The newly revamped app features a user interface (UI) with four tabs: Home, Content, Community, and Shopping, making it more intuitive.
An Jeong-sang, an adjunct professor at Chung-Ang University's Graduate School of Communication, noted, "While Naver is providing personalized content in various ways, Daum has shown no noteworthy changes. Ultimately, it can be interpreted that Naver's consumer lock-in effect has intensified, resulting in an increase in its search market share."