Naver vs. Kakao
The competition between Korean web giant Naver and the nation’s top mobile messaging company Kakao will be intense in 2014. They are waging an all-out war to penetrate local and global markets by making inroads into the territory of each other’s core businesses.
According to industry sources on January 14, Naver is going to feature BAND, its center for a mobile gaming community, in the first half of this year. Kakao, on the other hand, is reportedly considering launching a news content service.
Last year, the country’s top portal operator won an overwhelming victory over Kakao thanks to Line. Kakao Talk attracted 130 million subscribers, mainly in the local market, whereas Naver’s Line enticed 330 million people mostly in Japan. Line also took one step forward in the South Asian market, where both companies competed with other smartphone messengers, including WeChat, Facebook. and What’s APP. The gap between the two Korean firms is expected to lead to a difference in profits after 2014, since the messenger service is directly linked to a rise in sales of its main content such as mobile games.
With the total subscribers of BAND increasing to 23 million (18 million Koreans included), Naver’s business that integrates social networking into mobile games is getting a lot of attention. Industry analysts are saying that the Korean Internet giant will construct and connect a channeling platform such as KakaoTalk games to Naver Social Apps. In particular, the attraction of BAND lies in the fact that mobile gaming companies can avoid paying Google’s taxes, where 30% of the total sales are deducted in advance, by using Naver’s mobile community service.
Kakao’s future introduction of its news content service is also receiving a lot of attention in the industry. Currently, Naver represents an absolute proportion of the online news service market. Around 23 million users browse news on Naver’s PC and mobile platforms. However, Kakao’s introduction is likely to result in the widespread use of the service during a short period of time, as its gaming platform did. In addition, the industry is paying attention to Kakao’s way of editing News, and its consultation about the distribution of news with relevant news agencies.
It is possible for the mobile messenger service provider to reap profits from advertising. Nonetheless, the fact that Kakao aims to expand its influence by entering the online news service market, which is dominated by portal sites, is appealing.