After fending off Google on their home turf, South Korean Internet giant Naver seeks to duplicate that success internationally.
In August of this year, Korean internet company Naver announced they had partnered with a domestic car-sharing service to install their in-vehicle information entertainment system, Away, in every car. Away allows drivers access to the latest GPS and navigation technology as well as a way to stream music from their personal mobile device.
The move is emblematic of the way Naver saw windows of opportunity to use innovation as a means to drive business.
“We have been studying technologies that enhance the value of life as we try to understand the space and environment surrounding users and pay attention to the numerous possibilities that intelligent mobility is poised to create,” Naver Labs Chief executive and company CTO Song Chang-hyun said in a statement. “AWAY is the fruit of our efforts to help build a lifestyle that is safer and more valuable.”
Track Record of Rapid Growth
Naver has come a long way in a relatively short period of time. The company was founded in 1999 by Lee Hae-jin who broke away from a Samsung division to launch his internet start-up. When Lee stepped aside as CEO in March of this year, Naver had grown into a corporate giant with a market cap of $24 Billion, with more than $3.7 Billion in sales and over 5,600 employees. This year, Forbes listed Naver at #9 on its list of most innovative companies.
Perhaps its true measure of success is that it has been able to keep Google from coming in and steamrolling the internet search market in South Korea as it had done in most other markets. With about 75% of the total internet search traffic in a country that boasts the world’s fastest internet speeds, South Korea is only one of three nations on the planet (the others being Russia and China) where Google is not #1.
Reimagining the Search Platform
Industry analysts have pointed to a few reasons why Naver was able to enjoy such early success. Beyond just providing a single search box as Google does, Naver displayed the current search trends on its homepage, so people could instantly see what the rest of the country was searching for at any given time.
Naver had the vision of making its website a destination for entertainment rather than just a vehicle to find it. To that end, they uploaded 20 new “webtoons” per day. It was not unusual for to garner 30,000 ratings and more than 10,000 reviews from readers in less than a day.
Furthermore, where they really set themselves apart was when they launched their Knowledge platform in 2002, a precurser to Yahoo! Answers, where people could submit a question and receive a response from another user who had the answer.
Being Thrown a Life LINE
The biggest breakthrough for Naver came as a result of one of Asia’s worst natural disasters. After the Tohoku earthquake knocked out much of Japan’s communication infrastructure in 2011, employees in Naver’s Japan branch office saw the need to create reliable mobile messaging app and immediately launched LINE, which went on to become Japan’s number one social network and recording almost 700 million users globally.
“While continuing to defend our leadership in markets where Line already dominates, we also recognize the importance of developing new technologies and expanding into new business areas in order to compete in North American, European, and other markets where such messaging services as America’s WhatsApp and China’s WeChat are strongly positioned,” Lee said in a 2016 interview.
Lee went on to admit that the prospect of competing against the Western powerhouses is something that keeps him up at night. “I’m still afraid of those huge American Internet businesses, like YouTube in video services, Facebook in social networking, Instagram in photo-sharing, and so on. Every year they record sales of tens of trillions of Korean won with profits also in the trillions. Whenever I think about how we can survive in competition with them, I get nervous and worried.”
The Road Ahead
Like most tech companies, Naver is not immune to the ups and downs of the market. From Juke to August of this year, the company’s stock dropped declined 6.67%, well above the standard deviation of 1.9%. But with a solid hold on the local search engine traffic and continued innovation into new fields, Naver seems well positioned to dominate well into the future; in March of this year, Naver announced the appointment of vice president Han Seong-sook as its first female CEO and the first woman to lead a major Korean tech company.
“Everyone in the IT industry knows a one-time success does not last long,” says Han following her appointment. “Naver is seeking out new opportunities by transforming painstakingly and relentlessly as the industry evolves faster than ever.”