AI reshapes Korea's search market as Naver surges and Daum plots comeback

Naver's search share tops 80% on AI Tab, AI Briefing features; Daum, under new owner Upstage, promises full AI overhaul with services launching next month; AI emerges as the defining factor in search competitiveness

Naver headquarters [Photo provided by Naver]

Artificial intelligence is upending South Korea's search market.

Naver, which has deepened its AI capabilities, is extending its dominant lead, while Daum — now under new ownership — is preparing an AI-powered overhaul and signaling an aggressive push to close the gap. Industry watchers say the intensifying battle for market share marks a turning point, with AI-driven disruption in the search sector now imminent.

AI has emerged as the decisive factor in search service competitiveness, according to industry sources Sunday.

The impact was immediate for Naver: bolstering its AI features translated directly into a gain in market share. According to market research firm InternetTrends and Naver, the company's search share climbed to 81.34% as of May 24, breaking through the 80% mark.

That widened Naver's lead over Google — which held 14.87% — to more than 66 percentage points, cementing its dominance.

InternetTrends attributed the gains to Naver's full-scale integration of AI into its search functions, including the AI Tab and AI Briefing features.

Before the AI Tab beta launched, Naver's average search share stood at 63.82% from Jan. 1 through April 26. After the launch — from April 27 through June 17 — it rose to 66.34%. The AI Tab is a conversational AI search service that combines Naver's shopping, place and other services with AI. The feature surpassed 3 million monthly active users within a month of its beta release, and analysts say it has also helped draw more users to Naver Search overall.

AI Briefing is also expanding its role as a core AI search service. The feature summarizes search results to surface key information. Naver plans to keep broadening its coverage, targeting about 40% of all search queries by year-end.

Daum, which has taken on Upstage as its new owner, has also signaled a sweeping AI-driven transformation, with the goal of reinventing the portal as a platform built for AI agents.

To that end, Daum plans to roll out a series of AI services powered by Upstage's large language model, Solar.

Next month, Daum will officially launch "AI Overview," which uses AI to organize search results and generate answers, along with a conversational "AI Mode." The company also plans to expand coverage through year-end, strengthening vertical search across shopping, restaurants, travel, credit cards and real estate — all grounded in actual databases.

Additional features in the pipeline include a daily automated briefing of brokerage research notes each morning and an AI function that pre-generates follow-up questions based on the context of news articles.

Industry insiders expect the overhaul to trigger meaningful movement in Daum's search share, which has shrunk to around 1%.

Upstage CEO Kim Sung-hoon presents his vision for the Daum portal at an Upstage media day held at Conrad Seoul in Yeouido on June 16. [Yonhap]

Beyond domestic players, Google is also intensifying its push into the Korean market with AI, making the competition even fiercer. While Google holds an unrivaled No. 1 position in global search, Naver has kept it to a roughly 10% share in South Korea.

Google is rolling out a broad expansion of generative AI-based search using its latest Gemini model, aiming to deliver the information users need in a single query. The company is overhauling its search system — moving away from traditional keyword-based results toward AI-driven conversation — through features such as an AI Mode that presents key summaries at the top of results and a function that generates follow-up questions based on an initial search term.

sjpark@heraldcorp.com