Naver needs some soul-searchingLocal portal and search giant Naver enjoys unrivaled status in cyberspace, but abuses stemming from its dominance have gotten out of hand. Naver, which accounts for 75 percent of online and 67 percent of mobile searches, stands accused of blocking smaller venture technology companies from the market.
Worse, it allegedly steals business ideas from venture companies and pushes out competition by using its advertising power. Instead of the legitimate practices expected of leading technology companies - investing in or purchasing innovation, ideas or smaller companies - Naver outright copies new content and services and markets them on its portal site.
Startup venture companies lagging in funding and marketing have often come up with innovative businesses and content, but they have no choice but to lose once Naver enters the scene. If the predatory practices of Naver - a homegrown technology company that survived all kinds of challenges to beat global competition and become the country’s household online name - continue, there will no other competition left.
Naver’s business practices not only discourage and kill an innovative environment, they can be self-destructive. One dinosaur-like company cannot survive in an insular corporate habitat. It cannot come up with new ideas on its own and widen the market. The controversy over its business abuses will likely affect its operation, too.
The National Assembly is considering drawing up online antitrust regulations to rein in monopolistic abuses of technology giants like Naver. The Fair Trade Commission embarked on an investigation into NHN, which runs the portal site, to determine whether the search engine company abused its dominant status to intimidate and damage competition, as well as undermine consumer choices and market diversity.
Naver has long been Korea’s pride in the information and technology field for its pioneering endeavors and creativity that helped beat giants like Google and Yahoo. But it needs to come up with a new growth model to sustain its enormous size. Resorting to easy profit by throwing around its market weight with foul business practices cannot sustain the company for long.
Naver must seek symbiotic ways to breed innovation with smaller venture companies. Otherwise, it will receive the same social and political backlash that hounds chaebol businesses.