nAVER’s return to global AI strategy | Overcoming the LINE crisis and entering Silicon Valley

nAVER is undergoing a major strategic shift with the return of its founder and chairman Lee Kun-hee to the helm, centering on artificial intelligence technology and overseas expansion. emerging from the crisis of Japan’s Line Yahoo, NAVER is seeking to diversify its global presence from North America to the Middle East, and is attempting to make an innovative leap forward by securing leadership in AI technology.

the Lineyahoo crisis and management changes

japanese government pressure and stake sale crisis

in November 2023, Japan’s Ministry of Internal Affairs and Communications called for a review of the country’s capital relationship with NAVER following a data breach. out of Line’s 24 trillion won market capitalization, NAVER’s stake in Line is worth about 8 trillion won, but with the entire board of directors replaced by Japanese, and the separation of systems underway, the company is on the verge of a de facto breakup.

the return of founder Lee Kun-hee as chairman

after a seven-year absence from the company’s board of directors, Chairman Lee Hae-jin returned to the company in March at the shareholders’ meeting and has provided strong leadership in the crisis. since his return, he has been actively networking internationally, including a meeting with Donald Trump Jr. to discuss AI and global expansion.

sovereign AI and On-Service AI Strategies

sovereign AI differentiation strategy

nAVER’s Sovereign AI is a differentiated approach that provides customized AI solutions optimized for each country’s culture, language, and data sovereignty. we are creating new opportunities by targeting specific market requirements that are difficult to meet with the global big-tech’s one-size-fits-all model.

innovating on-service AI integration

we are deeply integrating AI capabilities into all core services, including search, commerce, content, and cloud, to enable personalized user experiences. this strengthens our user lock-in effect and serves as a key strategy to defend against domestic and international competitors.

launched NAVER Ventures in Silicon Valley

Establishing an AI investment base

on June 5, Chairman Lee Hae-jin, along with CEO Choi Soo-yeon and Head of Strategic Investment Kim Nam-sun, hosted a large-scale investment networking event in Silicon Valley, inviting more than 100 venture capitalists and startup founders. at this event, we will formalize the establishment of NAVER Ventures and begin securing core technologies and talent in the AI field.

strategic M&A

kim Nam-sun, who successfully led the acquisition of Poshmark, will head NAVER Ventures, which will focus on large-scale investments and strategic mergers and acquisitions, differentiating itself from the existing CVC, D2SF. the goal is to create synergies that go beyond mere financial investment and organically integrate technology and services with existing businesses.

diversified Global Market Entry

north American content-commerce duopoly

webtoon Entertainment has grown to become the world’s largest storytelling platform with 166 million global MAUs. It achieved $343.8 million in revenue in Q1, with 13.6% and 20.7% growth in advertising and IP adaptation, respectively.

poshmark has achieved a remarkable turnaround from an annual loss of KRW 100 billion to an operating profit in Q1-Q4 2024 through intense restructuring after the acquisition of Naver.

exploring new markets in the Middle East and Southeast Asia

nAVER Innovation, a joint venture with Saudi Arabia’s National Housing Corporation (NHC), is establishing a map-based super app and expanding its digital twin platform. we are securing a foothold in the B2G business by capitalizing on large-scale national development projects such as Neom City.

in Southeast Asia, we are using Singapore as an outpost for our cloud business, and in Thailand, we are developing a Thai language mega-language model with local telecommunications companies.

growth strategy centered on four core engines

content, Commerce, Cloud, and Fintech Synergy

nAVER’s global expansion is centered on four engines: content, commerce, cloud & AI, and fintech. the synergy between Webtoon and Whatpad is solidifying a storytelling platform centered on Gen Z, while NAVER Cloud, which provides more than 220 services, serves as the technological backbone.

in addition to Korean, NAVER Cloud’s self-developed hyper-competent AI, HyperClova X, has shown outstanding performance in Chinese, Japanese, Vietnamese, Tagalog, Hindi, and other languages, making it well positioned to expand into various language markets.

challenges and future prospects

competition from global big tech

youTube’s cannibalization of video search and Google’s aggressive offensive have led to a decline in domestic search market share, and the company is facing challenges from Chinese ultra-low-cost platforms such as Aliexpress and Temu. AI technology innovation and global expansion have become essential for survival and sustained growth.

execution risk and resource allocation

execution risk management and effective allocation of limited resources remain key challenges as the company pursues multiple large-scale projects simultaneously, including AI investment in the U.S., new market development, and healthcare. it will be interesting to see if the company can overcome the weight difference with global big tech and secure differentiated competitiveness.