As Naver and Kakao further detail their artificial intelligence strategies this year, the two companies' different approaches are drawing attention.

Naver has chosen an “expansive internalisation” strategy that plants AI across its businesses, from search, commerce, fintech and cloud to robots. Kakao is pursuing a “platform-focused” strategy that funnels AI into a single platform, KakaoTalk.

The difference stems from the two companies’ different starting points. Naver has a multi-layered portfolio spanning search, commerce, Place, fintech and cloud, making it natural to embed AI as a tool to improve conversion rates in each business. Kakao, by contrast, has compressed its key touchpoint into KakaoTalk after two years of streamlining affiliates, and its AI strategy has also taken a structure that converges there.

Naver: Search, commerce, B2B... AI directly linked to revenue structure

The core concept of Naver’s AI strategy is “on-service AI.” It is a structure that organically combines AI within individual services to understand users’ intent and complete execution. Naver declared this strategy in 2024 and is now in its third year of implementation. This year it has entered a deeper phase, fully introducing agents across all services.

A key feature is that AI adoption links to the existing revenue structure with minimal steps. In search, the generative AI-based “AI Briefing” has expanded to about 20 percent of the integrated search page, and users have topped 30 million. If AI Briefing boosts search traffic, it leads directly to advertising revenue.

In commerce, an AI shopping agent launched in February analyses users’ purchase context and proactively provides product information. When users convert to purchases, it leads to Smart Store commission revenue. Naver plans to expand the AI shopping agent across shopping within the year.

A health agent set to launch within the year is an extension of this flow. It aims to provide precise answers optimised for the local environment after training on real data from Seoul National University Hospital, and to link resulting conversions for products, places and reservations to the revenue structure of shopping and Place.

This is also the context for Naver CEO Sooyeon Choi (최수연) saying, “When search, shopping and Place are connected like one flow through AI, we can provide greater value to users.”

Expansion into business-to-business is based on the same logic. Naver secured references in finance and the public sector by providing the Bank of Korea with “NeuroCloud,” which combines its in-house AI model HyperCLOVA X. The revenue structure is recurring revenue based on cloud subscriptions. It is taking the same model-based approach to “sovereign AI” for countries and institutions seeking to avoid reliance on U.S. and Chinese big tech. Choi said demand is actually rising as geopolitical risks intensify.

The scope of AI expansion does not remain limited to digital services. Naver has presented online-offline integration and stronger offline logistics touchpoints as a mid- to long-term strategic axis, and robot OS development underway at its 1784 headquarters and delivery robot trials are part of that direction.

Kakao: Focus on KakaoTalk and AI after shedding affiliates

Kakao’s AI strategy converges on KakaoTalk alone. Behind this ability to focus is two years of restructuring. Kakao CEO Shina Chung (정신아) began streamlining non-core affiliates soon after taking office, reducing the number of affiliates from 147 to 94 by the end of last year.

AXZ, which operates the Daum portal, is in the process of being sold through a stock swap with Upstage. Control of Kakao Games is set to be transferred in May to LAAA Investment, funded by Line Yahoo. Kakao has effectively shed two business areas: portals and games.

Chung said, “In terms of reducing affiliates and strengthening fundamentals, we have entered the final stage.”

The result of this restructuring is KakaoTalk. After Kakao cleared out non-core businesses, what remained as a key asset is the country’s largest messenger platform. Kakao chose a method of concentrating AI touchpoints within this platform. The core concept of the strategy is “agentic AI.” It refers to a stage in which AI proactively provides information or completes actions before a user’s request.

So far, performance indicators support its effectiveness. Users of “ChatGPT for Kakao” increased to 8 million as of February from 2 million at launch. “Kanana in KakaoTalk” is posting a download completion rate of more than 80 percent and a reuse rate of about 70 percent.

Citing this, Chung said, “A 20 percent expansion in average daily time spent on KakaoTalk is well within sight.” The basis for this goal is that KakaoTalk’s average daily time spent rebounded meaningfully in the second half of last year for the first time since the COVID-19 period.

Links to the external ecosystem are also being advanced around KakaoTalk. On the 24th, Kakao added external partner services such as Olive Young, Musinsa, Hyundai Department Store, Samjjeomsam and My Real Trip to Kakao Tools. Kakao plans to further widen the partner ecosystem by opening additional access to PlayMCP and an AI agent builder by the end of this year. Users use external services through AI agents within KakaoTalk, and that flow leads to advertising and commerce revenue. Kakao is also pushing to advance on-device AI this year through cooperation with Google.

An industry official said, “Naver’s method attaches AI to existing revenue routes, so initial performance measurement can be relatively fast,” adding, “For Kakao, this year’s key is the stage of proving whether expanding time spent on KakaoTalk actually leads to advertising and commerce conversions.”