Naver and Kakao are expected to record mixed results in the second quarter. In March of this year, Naver's founder, Lee Hae-jin, returned, and the company is anticipated to achieve its highest quarterly revenue ever, while Kakao, from which founder Kim Beom-soo has departed during the same period, is expected to report poor performance. Some industry insiders suggest that the contrasting outcomes reflect the impact of Naver's swift decision-making in its overall artificial intelligence (AI) business following the founder's return, compared to Kakao, where the absence of its founder has weakened momentum.
◇ Naver expected to achieve record quarterly revenue after founder's return
According to the industry on the 30th, Naver is projected to record its highest quarterly revenue ever in the second quarter. Financial data firm FnGuide estimates Naver's second-quarter revenue will be 2.9049 trillion won, an increase of about 11% from the previous year. Operating profit is expected to be 528.1 billion won, about a 12% increase compared to the previous year. This is expected to be the second-highest quarterly operating profit on record.
This is Naver's first quarterly performance since founder Lee Hae-jin returned to the management frontline after seven years in March. In line with the founder's return, Naver launched the 'Naver Plus Store Shopping App,' which combines its existing shopping search service with AI-based personalized recommendation services. By separating the shopping services provided in the existing Naver app's 'Smart Store' tab into a dedicated app, it has specialized the AI features. There is a strong opinion that Naver's record for the highest quarterly revenue in Q2 is due to the increase in Naver Shopping sales following the integration of AI features. Last year, revenue from the commerce sector, including Naver Shopping, reached 2.923 trillion won, which amounted to 28% of Naver's total revenue of 10.7377 trillion won.
◇ Kakao, where the founder has departed... expected poor performance in the first quarter
In contrast, Kakao is expected to see poor performance in the second quarter. According to FnGuide, Kakao's second-quarter revenue is projected to be 1.9511 trillion won, a decrease of 2.6% from the previous year. Operating profit is estimated to be 134 billion won, a decline of 5.3% compared to the previous year. This marks the first quarterly performance since founder Kim Beom-soo stepped down from management in March due to a recurrence of cancer. This contrasts with Naver, which is experiencing revenue growth by integrating AI into its actual business. There is considerable concern that Kakao will face constraints in accelerating its business restructuring to reorient around AI and streamline non-core businesses due to the absence of Kim.
The situation regarding AI new businesses is also challenging. For instance, Kakao launched a conversational AI messenger called 'Kanana' as its AI new business in May, but the beta service saw daily new installations drop below 100 just over a month after its release. Critics noted that operating it as a separate application without linking it to KakaoTalk hindered user expansion. Since users need to accumulate conversation data to enhance the quality of personalized AI conversation services, the lack of usage of KakaoTalk data is problematic.
An industry insider stated, "It seems that since Kim left the management frontline due to health issues, it has become difficult to accelerate investments and decision-making across the entire AI business." Meanwhile, Naver has been focusing on research and development (R&D) investments in AI since the return of founder Lee Hae-jin. Kim Yoo-won, the CEO of Naver Cloud, noted, "Since Chairman Lee Hae-jin's return, we are in the midst of making critical investments in AI R&D. Our planned investments are set to far exceed previous levels."
Kim Kyung-won, a distinguished professor of business administration at Sejong University, commented, "In a time of upheaval in the AI business, the role of a head is significant. When the founder returns to lead the company, the speed of decision-making increases, enhancing efficiency," and added, "The contrasting performances of Naver and Kakao could be a result of this difference." He also remarked, "Samsung is facing its own crisis as Vice Chairman Lee Jae-yong, who plays the head role, stepped back from management due to legal risks."