The South Korean government is proposing a series of bills to regulate Naver, the largest Internet company in the country with 70 percent market share. Some lawmakers insist it is a problem as Naver is monopolizing the market, but this is not the key issue considering Google has a dominant market share globally.
Naver Is a Portal Site, Not a Search Engine
There's a difference between a web portal and search engine, but Naver is not a search engine like Google or Bing. Naver is a portal site similar to Yahoo or MSN, which provide their own content instead of displaying external pages to other sites.
Internal Traffic vs. External Traffic
Yahoo produces its own content like Naver but one big difference between the two is that Yahoo's search engine results page (SERP) links to external sites, same as Google. But Naver's SERP is biased to increase internal traffic, which is generated by its own content team. Among the categories in Naver's search results, paid search is the only channel that will get traffic to your website and that's why the SMEs are raising the issue to the government.
Below is a comparison screen between Google and Naver. The red section represents paid search, blue for organic search, and green for Naver's internal content.
Google's paid search is on the right side of SERP, but Naver displays its paid search in the top position with up to 15 listings.
However, the main problem is Naver's natural search results represented in the blue section. Google directs users to other sites via natural search results but Naver keeps the traffic internally (green section) to its own platforms like Blog, Café, Knowledge Q&A, and Image.
According to insiders, Naver directs up to 70 percent of traffic to its own Naver Blog.
While Naver has similar sections to Google and Yahoo such as site directory or web page results, it hardly has visibility on the natural SERP on Naver as it only returns minor traffic to your site.
Identifying Paid Ads on Naver
Some professionals have advised the government that Naver should clearly display paid ads if the SERPs are not displaying organic search results. And Naver is now testing (see below) to see how the CTR (click-through rate) is different when it indicates that the results are paid ads.
I think whether it shows as paid search or not doesn't matter. The more important thing is the percentage of natural web pages that can occupy natural search results on Naver instead of Naver's own content.
Some industry people will still complain whether it's five to 10 or 10 to 15 paid search ads that are served in the top position of Naver. However, Naver has the right to decide the number of paid listing and this is its territory. For mutual interest, Naver should consider allowing other sites' content to feature on its SERP like Google and Yahoo.
The Problem With Naver's Organic Search Results
What if Naver is able to show more organic search results instead of internal content, then will it satisfy everyone?
Does Naver really have the ability to "crawl" the pages of other websites and determine the ranking position of each page from its own algorithm like Google or Bing? I don't think so and will elaborate in my next column.
Lack of quality content: Are there enough sites that can provide quality content to show on Naver instead of Naver's internal content? Google's search results below explain why it couldn't dramatically increase market share in Korea.
If we exclude the blogs and news content in SERPs of Google, there's nothing much to show for users. Google Korea's current SERP shows that it is just copying Naver's user interface. Except image and video, the red section shows news site and green is internal content from Daum and Naver. I could only see one web page results in the red box.
Technical barrier for crawling: Because of mobile and multi-screen devices, new websites should meet the requirement of web accessibility or web standards whether they like it or not. This is a good opportunity for Google as there is still lots of content that doesn't have a chance to get visibility on Naver.
In the past few years, most websites were built without considering search engine bots as it was enough to just register their sites on Naver. We seem to forget but there was a time when Daum dominated the search market share in Korea before Naver.
In my next column, I will discuss how mobile will change the Internet in South Korea.
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Mark Kum is search director at GroupM Korea. He formerly worked at EC21, a leading digital agency for the B2B sector in Korea. Before that, in iProspect Korea with an in-depth understanding of SEO/SEM and was involved with top Korean brands such as Samsung Printer, Samsung Camera, Samsung mobile, Hyundai Motor Company, and Samsung Tesco. Kum always returns great results with re-contract and retaining clients. Unlike other online marketers, his career is based on manufacturing that provided him a deep understanding in B2B marketing. Kum also gives profound insights to clients because he is not only a search marketer but his background includes global marketing and economics.
March 19, 2014