ESTsoft, known for its vaccine program "AlYac," has recently put artificial intelligence (AI) technology front and center in a bid to rebound, but it has not led to improved results. The market share of "Zum (zum)," the portal run by subsidiary ESTaid, stayed in the 0% range, and the AI search engine "ALAN" has also failed to gain traction. In response, the company says it will strengthen various new businesses.
According to web analytics site Internet Trend on the 21st, as of the previous day, Zum's domestic portal market share was 0.05%, ranking at the bottom among major portals. During the same period, Naver took first place with 60.7%, followed by Google (29.9%), Microsoft Bing (3.6%), and Daum (3.3%).
Zum is a search portal currently operated by ESTaid, a subsidiary of ESTsoft. As recently as 2015, it posted a market share in the 3% range, but it has been on a downward trend since failing to adapt to the mobile era. In response, ESTaid changed its name from "Zum Internet" at the end of 2023 and, under CEO Kim Nam-hyeon, began in earnest to pivot the portal to an AI focus. It has been restructuring the way information is searched by applying various AI features to Zum, including an AI 1-second summary, financial content recommendations, and voice briefings.
In addition, as a separate strategy to advance search, ESTsoft launched the AI search engine "ALAN" in December last year. ALAN is a Korean-specialized large language model (LLM) developed based on the search expertise accumulated through Zum. The company initially expected ALAN to be useful in the domestic environment by grasping even unique Korean expressions and memes. In fact, in Korean LLM performance evaluations, it ranked No. 1 domestically and No. 3 globally.
However, both ALAN and Zum have shown limited progress in raising their presence in the market. Zum remains stuck with a market share in the 0% range, and ALAN has also not been credited with leading to clear user growth or increased traffic.
The company's profitability is also deteriorating. In the third quarter of this year, the company posted 25 billion won in revenue and an operating loss of 4.5 billion won. Revenue held at a similar level to a year earlier, but the operating loss increased 36.9%. ESTsoft recorded its best results since its founding with an operating profit of 12.4 billion won in 2021, but it turned to the red in 2022 and remained in the red for three years through last year. It returned to profit in the second quarter this year after eight quarters, but fell back into the red after one quarter. The cumulative operating loss swelled to 8.8 billion won. Achieving a full-year profit this year will not be easy.
Accordingly, ESTsoft says it has laid the groundwork for growth more in new AI software (SW) businesses than in strengthening portal services. In particular, it said it will put emphasis on expanding the businesses of the AI dubbing platform "PERSO AI" and "PERSO AI Human Kiosk." The company explained that the third-quarter operating loss was also due to increased global advertising and promotion expenses and higher materials and supplies costs to grow these new businesses.
An ESTsoft official said, "As Zum's influence as a traditional search portal has weakened, we are pursuing various service overhauls," adding, "Recently, we changed the first screen to a card-style UI, and we signed a memorandum of understanding (MOU) with Polaris Office to expand beyond a simple search portal into an 'open AI portal' that supports AI-based services."
The official added, "ESTsoft is fostering new businesses such as PERSO AI and AI kiosks as core pillars, while the existing ALTools continues to serve as a steady cash cow," and "The reason we can continue to pursue new businesses is that our existing businesses provide stable support."