Naver to launch competitor to ChatGPT

Naver will launch its own version of ChatGPT in the Korean market in the first half of this year to respond to the widely popular chatbot system, the company announced Friday.

The announcement follows weaker-than-expected financial results for 2022.

Naver CEO Choi Soo-yeon said during a conference call that the operator of the country’s largest search portal will introduce its “SearchGPT” that specializes in queries in Korean.

“We will respond to the new trend of generative AI,” Choi said, “We will solve the weaknesses of ChatGPT such as its low reliability, shortage of up-to-date information and lower accuracy when translating from English into Korean,” Choi said.

Short for Chat Generative Pre-trained Transformer, ChatGPT is a free chatbot system capable of generating conversational dialogue and human-like text such as articles and summaries.

Developed by OpenAI, a San Francisco, California-based company, the application has received much public attention since Microsoft’s recently announced “multiyear, multibillion-dollar” investment into the company.

In the beginning phase, SearchGPT will run as a standalone beta service instead of being integrated into Naver’s search engine.

Google is also testing its own generative AI model to compete with ChatGPT.

The announcement helped elevate Naver’s stock as its price jumped 5.67 percent to close at 223,500 won Friday, despite a steep decline in net profits last year.

The internet company’s net profit reached 664 billion won ($544.1 million), down 96 percent from a year earlier and short of the market estimate of 916.8 billion won, the company said in a regulatory filing Friday.

Naver attributed the on-year drop in net profit to an abnormally high net in 2021 due to a merger between its messaging firm Line in Japan and Z Holdings in the first quarter of 2021.

Operating profit stood at 1.3 trillion won for all of 2022, down 1.6 percent from the year before. Sales came to 8.22 trillion won, a 20.6 percent increase compared to the year before.

For the fourth quarter, Naver reported 2.27 trillion won in revenue, up 17.8 percent from a year ago.

Its operating profit for the October-December period fell 4.2 percent on year to 336.5 billion won, and its net profit slumped 59.1 percent on year to 122.6 billion won.

The earnings fell short of market expectations. Analysts had predicted net profits of 253.7 billion won in the fourth quarter, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Naver said brisk sales in the content and commerce sectors contributed to the rapid growth in its sales for 2022.

Content sales skyrocketed 91.3 percent to 1.3 trillion won over the one-year period due to increased global demand for its web content.

Revenue from Naver’s commerce business in the first quarter jumped 21 percent on year to 1.8 trillion won due to increased demand for online shopping.

Sales by the company’s flagship search platform, which covers its ad business, grew 7.9 percent on year to 3.6 trillion won.

Sales from the fintech sector also expanded 21.2 percent on year to 1.2 trillion won on increased online shopping through its mobile payment service Naver Pay.

Revenue from its cloud business gained 5.3 percent on year to 402.9 billion won.

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