Naver’s Lee Hae-jin Returns and Global AI Strategy | Overcoming the LINE Crisis and Entering Silicon Valley

Naver의 창립자 이재진 의장이 복귀함에 따라 인공지능 기술과 해외 시장 확장을 중심으로 한 대대적인 전략 전환이 이루어지고 있습니다. 일본에서의 라인-야후 사태와 같은 위기를 극복하기 위해, Naver는 북미에서 중동까지 다양한 글로벌 확장을 모색하고 있습니다. 이러한 변화는 회사가 AI 기술 리더십을 확보하고 혁신적인 도약을 이루기 위한 노력을 나타냅니다. 이어지는 내용에서 실제 사례와 함께 해결방법을 확인해보도록 하겠습니다.

Naver is pushing for a major strategic shift focused on artificial intelligence technology and overseas market expansion through the full return of founder Lee Hae-jin as chairman. In the face of the crisis surrounding the Line-Yahoo situation in Japan, the company is seeking diversified global expansion from North America to the Middle East, attempting an innovative leap by securing AI technology leadership.

The Line-Yahoo Situation and Management Changes

Pressure from the Japanese Government and Share Sale Crisis

In November 2023, following a personal information leak incident, the Japanese Ministry of Internal Affairs and Communications is strongly demanding a review of its capital relationship with Naver. While the value of Naver’s stake in Line-Yahoo, which has a market capitalization of 24 trillion won, is about 8 trillion won, the board has been entirely replaced by Japanese members, and the system separation work is underway, leading to a practical separation.

Chairman Lee Hae-jin’s Sudden Return

Lee Hae-jin, who returned as an inside director through the shareholders’ meeting in March after a seven-year absence, is demonstrating strong leadership to overcome the crisis. Immediately after his return, he actively engaged in international networking, seeking cooperation in AI and global expansion through a meeting with Donald Trump Jr.

Sovereign AI and On-Service AI Strategy

Sovereign AI Differentiation Strategy

Naver’s Sovereign AI offers a differentiated approach by providing customized AI solutions optimized for the cultural, linguistic, and data sovereignty characteristics of each country. It targets specific market demands that are difficult to meet with the unified massive models of global big tech, creating new opportunities.

On-Service AI Integrated Innovation

By deeply integrating AI capabilities into all core services such as search, commerce, content, and cloud, Naver is implementing personalized user experiences. This is being utilized as a key strategy to strengthen user lock-in effects and defend against the competition from domestic and international rivals.

Launch of Naver Ventures in Silicon Valley

Establishing an AI Investment Hub

On June 5, Chairman Lee Hae-jin, along with CEO Choi Soo-yeon and Strategic Investment Division Head Kim Nam-sun, will host a large-scale investment networking event in Silicon Valley, inviting over 100 venture capitalists and startup founders. At this event, they will officially announce the establishment of ‘Naver Ventures’ and aim to secure key technologies and talents in the AI field.

Strategic M&A Promotion

Kim Nam-sun, who successfully led the acquisition of Poshmark, will take the helm of Naver Ventures, focusing on large-scale investments and strategic mergers and acquisitions that differentiate from the existing CVC ‘D2SF’. The goal is to create synergies that organically integrate technology and services with existing businesses beyond simple financial investments.

Diversified Global Market Expansion

North America as a Dual Engine for Content and Commerce

Webtoon Entertainment has grown into the world’s largest storytelling platform, recording a global MAU of 166 million. It achieved revenue of $343.8 million in the first quarter, with growth rates of 13.6% and 20.7% in the advertising and IP adaptation sectors, respectively.

After Naver’s acquisition, Poshmark underwent intense restructuring, achieving remarkable results by turning from an annual deficit of 100 billion won to an operating profit in the first, second, and fourth quarters of 2024.

Exploring New Markets in the Middle East and Southeast Asia

Naver is promoting the establishment of a joint venture ‘Naver Innovation’ with the Saudi National Housing Company (NHC), focusing on building a map-based super app and expanding the digital twin platform. It is securing a foothold for B2G business by seizing opportunities in large-scale national development projects such as Neom City.

In Southeast Asia, Singapore is being used as a base for cloud business, while in Thailand, the company is working with local telecom companies to develop a Thai-language large language model.

Growth Strategy Centered on Four Core Engines

Synergy of Content, Commerce, Cloud, and Fintech

Naver’s global expansion is driven by four engines: content, commerce, cloud & AI, and fintech. The synergy between webtoons and Wattpad solidifies a storytelling platform centered on Generation Z, while Naver Cloud, providing over 220 services, plays a pivotal technological role.

The self-developed super-large AI ‘HyperCLOVA X’ demonstrates excellent performance not only in Korean but also in Chinese, Japanese, Vietnamese, Tagalog, and Hindi, positioning itself favorably for expansion into various language markets.

Challenges and Future Outlook

Competition with Global Big Tech

The domestic search market share is declining due to YouTube’s encroachment on video searches and Google’s offensive, while facing challenges from ultra-low-cost Chinese platforms like AliExpress and Temu. AI technology innovation and global expansion have become essential elements for survival and sustainable growth.

Execution Risks and Resource Allocation

Managing execution risks associated with simultaneously pursuing multiple large-scale projects, including US AI investments, new market exploration, and healthcare, along with effective allocation of limited resources, remains a key challenge. Attention is focused on whether it can overcome the scale difference with global big tech and secure differentiated competitiveness.