The competitive landscape of South Korea's portal and platform market, traditionally dominated by Naver and Kakao, is shifting towards artificial intelligence (AI) technology. The focus is moving from 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-based portal service competitiveness by integrating its LLM, Solar, with Daum's search and content assets.
With Upstage's entry, the long-standing duopoly of Naver and Kakao in the domestic portal and platform market may face significant changes. 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 platform, centered around the KakaoTalk service, which boasts 45 million monthly active users.
Daum, once a leading portal in South Korea, has seen its prominence wane since the 2000s under Kakao's ownership. However, the integration of Upstage's LLM technology presents an opportunity for Daum to be revitalized as an AI-based 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 responded to user inquiries through 'search' functions, while AI agent platforms are designed to understand user intent and perform tasks ranging from searching to recommending and purchasing. In this context, each company's LLM is emerging 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 becoming 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-based portal services by integrating Solar with Daum's language data from news, searches, and comments.
Naver and Kakao are also accelerating their transitions to AI agents. They leverage their established platform ecosystems and user infrastructure to promote a seamless experience from search to task execution.
Naver's strategy focuses on integrating its existing services—search, shopping, and payments—into an AI-enhanced experience. Since last year, Naver has been strengthening its 'AI Briefing' service, which uses the enhanced Korean language model HyperCLOVA X to go beyond keyword-based searches and understand user intent in natural language queries, linking them to recommendations, exploration, and purchasing actions.
Kakao is concentrating on transitioning its mobile messenger KakaoTalk into an AI agent platform this year. Its 'AI onboarding' strategy aims to naturally introduce 50 million users to AI services within the KakaoTalk chat interface, allowing users to experience AI seamlessly in their daily interactions.
Kakao believes that its mobile-based platform strategy emphasizes competitiveness in a market centered around web-based agents. Since KakaoTalk is a service where users do not need to enter a separate search bar, it can naturally connect AI to conversations, recommendations, gifting, and content consumption. Kakao is enhancing its lightweight AI model with its next-generation model, Kanana 2.5, and focusing on improving learning costs and inference speed with the Kanana Tokenizer.
An industry insider noted, "As AI agents become more common, competition for services optimized for the Korean language environment in the domestic search and platform market is becoming crucial. The competition will hinge not just on technology but on who can first prove a monetization model that translates into actual revenue and business success."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.