“This business is a great opportunity to dominate the domestic market. You have to be proactive.”
“I understand the meaning, but what wouldn’t the government or politics say? Let’s think more about it.”
A conference room at Naver in Bundang, Seongnam-si, Gyeonggi-do in the middle of last month. There was a controversy over the new business in Korea. Young employees insisted that new businesses should be actively promoted with this ability. He said that now is the right time to start a business because he has come up with new ideas and prepared. But the executive in charge had a different idea. The government and politicians said that Naver would also take care of the perspective of the government and politics. It was concluded that the meeting on this day was to give more time and consider more.
Naver officials said that the thoughts of the founder Lee Hae-jin, Global Investment Manager (GIO), were reflected in the Naver executives’ cautious opinion on expanding domestic business. A company official said, “It’s okay not to make money in Korea, so don’t wear a headband and make people who oppose it.” He said, “It would be better not to do new business in Korea” to senior executives of the company.
It is said that this GIO came to think like this in April of last year, when the’Tada Ban Act’ passed the National Assembly. A Naver official said, “It was an innovative service called’Tada’, but I know that this GIO was shocked as taxi drivers wearing headbands and opposing them and raising hands from taxi drivers in politics.” Naver’s domestic employees are known to be dissatisfied with Naver’s policy of focusing on foreign businesses as opportunities to be recognized for their abilities have decreased.
Haejin Lee “You don’t have to make money, so let’s wear a headband and avoid business that opposes.”
Naver’s prison crime is a regulation rush
In Naver, the largest online company in Korea, a conflict between young employees and the leadership is arising. When young employees come up with new business ideas in Korea out of their motives, there are increasing cases where the leadership blocks or regulates the pace. Naver’s internal and external message is that the founder Lee Hae-jin, Naver’s Global Investment Officer (GIO), is showing a cautious view to expanding its domestic business.
○ Naver is reluctant to expand its domestic business
It is reported that GIO Hae-jin Hae-jin began to have skepticism about the expansion of its domestic business after receiving the designation of the head of the Fair Trade Commission in 2017. The FTC has a system to designate the total number (same person) for companies with assets exceeding 5 trillion won. Based on this, it announced that it would designate this GIO as the total number in 2017. Naver argued that the GIO’s ownership ratio was only around 4%, and that there was a problem with classifying the CEO of a startup with the total number of large companies in the past.
However, it ended up being in vain. As this GIO was designated as the same person, all relatives and related companies were included in the disclosure. For this reason, the GIO was accused of prosecution last year for omitting a company owned by an executive of the Naver Cultural Foundation. A Naver official said, “It was the Naver Cultural Foundation that was set up to do good things for future generations like the Bill Gates Foundation.” In particular, the GIO is urging to be cautious and cautious about expanding domestic business after the’Tada Ban Act’ was passed by the National Assembly in April of last year.
Recently, the government and politicians are putting various regulations on big tech companies such as Naver. A representative one is the amendment to the E-Commerce Act, which was announced on the 8th. The key is to ensure that platform operators such as Naver take joint responsibility in the event of a dispute between a store company and a consumer on an online platform such as Naver.
The online platform fairness method being promoted by the FTC is also a heavy burden for big tech companies. Above all, there is strong backlash from the industry over the content that some of the search algorithms are to be disclosed. Naver objected that “disclosure of an algorithm is the same as asking a restaurant to disclose a recipe,” but the FTC is confronting that it is natural to inform the participating companies of the content that affects the search results. In addition to this, the FTC is further strengthening the regulatory organization by expanding the information and communication technology (ICT) dedicated team and establishing the’App Market Subcommittee’. Chairman Cho Sung-wook is increasing the intensity of platform regulation, saying, “I will make achieving a fair digital economy as my first task.”
○ Naver Healthcare can’t take a step
The GIO’s concern over such regulatory pressures is known to have a major impact on Naver’s strategy. In fact, Naver is moving the core of areas such as finance, healthcare, and content, which are key foods in the future, to the United States, Japan, and Thailand.
Unlike Kakao, Naver does not directly enter the banking business, which is a result of this GIO’s intention. It can be interpreted as being burdened with the fact that the moment it enters the financial industry, it can cause friction with existing business operators and that the monitoring of the regulatory authorities will also increase. Naver Webtoon, where overseas venture capitalists (VCs) are rushing to invest, also recently moved its headquarters to the United States. Naver Webtoon is evaluated as a core platform for spreading K contents.
The healthcare sector is also a field where Naver is unable to take a step in its business in Korea due to concerns about external backlash. Recently, Na Gun-ho, a professor at Yonsei University Severance Hospital, who is evaluated as the world’s best authority in the field of robotic surgery, was selected as the head of the Naver Healthcare Research Institute, but has not yet started a full-fledged new business. It is known that the company plans to provide health check-up services for Japanese employees first. This is because in Japan, the burden is light because the remote medical service is provided through the line. An official in the IT industry expressed regret that “The remote medical treatment business is dominated by US and Chinese companies such as Teladok and Pingan Healthcare while Naver is hesitant.”
Reporter Jihoon Lee/Minki Gu [email protected]