Naver raises S.Korean market lead thanks to LLM HyperCLOVA X

South Korea’s leading web portal Naver Corp. has raised its domestic market share, which plummeted to the mid-50% range in May, thanks to HyperCLOVA X, a large language model (LLM) based on generative artificial intelligence (GenAI).  

Website analysis company Internet Trends on Monday said Naver last month had 58.5% of the domestic search market, up from July’s 56%, and expanded its lead over Google to 27.6 percentage points.

From late last year to May this year, Naver saw its market share fall 63.8% to 55.7%.

Google’s launch of its conversational AI chatbot Bard had a major impact on eroding Naver’s market share. Over the same period, Google’s share increased from 26.3% to 34.8%.

Industry pundits say Naver attracted a lot of attention with HyperCLOVA X, a GenAI-based LLM released on Aug. 24.  An impressively large number of users visited Naver for searches using HyperCLOVA X, an interactive service based on its predecessor HyperCLOVA, which was released in 2021.

“Intensifying competition to secure market leadership has accelerated efforts to differentiate services using GenAI,” an industry source said.

The search engine sector is upgrading the conventional and often monotonous search window to one that is hyper-personalized and interactive. Microsoft this year applied OpenAI’s ChatGPT to Bing and Google is building a new engine integrating AI chatbots.

Write to Ji-Eun Jeong at jeong@hankyung.com