Korean portals cautious about ChatGPT in Korea

Microsoft’s integration of ChatGPT into its search engine is hailed by some as an “iPhone moment,” since the addition will allow for more sophisticated responses to queries.

Webpage of ChatGPT is seen on the website of OpenAI, on a smartphone. [SHUTTERSTOCK]

Microsoft’s integration of ChatGPT into its search engine is hailed by some as an “iPhone moment,” since the addition will allow for more sophisticated responses to queries.

Adoption in Korea may be slower due to the structure of the search market and the dominance of a number of local companies in the relevant services and technologies.

In Korea, Naver had 61.2 percent of the search market in 2022, Google 28.55 percent and Daum 4.83 percent, according to Internet Trend.

Naver CEO Choi Soo-yeon said earlier this month that the company will introduce its “SearchGPT” in the first half of the month. It will specialize in queries in Korean. The conversational chatbot will run as a standalone beta service instead of being integrated into Naver’s search engine.

The cautious approach is related to a unique characteristic of Naver as a portal platform, far from pure search engines like Google. It offers many functions and services, including blogs, online forums, shopping, webtoons, reservations, news, maps, payments and even real estate brokerage, leveraging the data from those functions for the search results.

By doing so, Naver can shore up overall traffic of its own platforms, offering targeted advertisings alongside the results.

“The essence of Naver’s search feature is to pull together a wide variety of search results that are not only derived from academic papers or news articles but postings on Naver-based blogs and online forums and advertisings,” said a spokesperson at Naver who spoke on the condition of anonymity.

“The system can have Naver search users connected with different services and diverse forms of information so that they can choose the option of their choice,” he said.

The integration of a ChatGPT-like tool into its search engine could disrupt the existing ecosystem, the spokesperson said.

“But when generative AI is fully integrated into the search engine, that would not be able to replace the kind of the ecosystem that we have built so far. So, Naver will maintain the current underlying structure in delivering query results,” the spokesperson explained.

Connecting as many search users as possible with its own services is critical since it has a suite of non-search features, like shopping, content and payments, that generate sizable incomes. Its commerce business brought in 1.8 trillion won ($1.4 billion) in sales last year, 21.9 percent of the total, while its content service and music streaming reported 1.3 trillion won.

Sales of the non-search businesses exceed that of the search business.

Another quandary concerns advertising, since it is still unclear how the chatbot-like system will effectively display advertising, the key source of Naver’s revenue. Showing ads in the result itself can seriously harm credibility of the system itself.

“ChatGPT-like services and features have limitless possibility as a software, but it won’t be able to replace current search engines,” said Jeong Yong-jei, an analyst at Mirae Asset Securities.

“The conversational chatbot best suits a certain type of the queries related to knowledge and information, but it has limited capability of handling inputs related to shopping,” the analyst said.

The analyst noted the disinformation of ChatGPT-like systems as a factor that would either delay or block its deeper penetration.

“It is nearly impossible to resolving the credibility issue altogether,” he said.

The thorny aspects pushed the internet company to deploy its advanced language models like HyperClova in limited services, although dataset of the Korean-focused HyperClova is 6,500 times larger than that of OpenAI’s GPT-3, according to Naver.

Kakao, the operator of Daum portal and KakaoTalk messenger, will bring its Ko-GPT, which is based on the GPT-3 model, to specific services such as a virtual assistant for KakaoTalk

“Instead of directly competing with global companies, we will focus on vertical AI services through Kakao Brain’s Ko-GPT,” said Kakao

CEO Hong Eun-taek during a conference call last week

The size of investment for AI will remain the same as before, the CEO said.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]