SEOUL -- Naver, South Korea's largest internet company, is expanding its investments in artificial intelligence and blockchain technologies, seeking to keep pace with market trends and find new growth engines.
The company on Thursday stressed its commitment to pursuing AI, content development and business partnerships. Last year, it poured more than 500 billion won ($471.9 million) into startups, including those with AI and blockchain expertise.
A recent target was a French player in the blockchain game. "We invested 4 million euros ($4.97 million) in Ledger, a French company with cryptocurrency technology, through our investment partner Korelya," Par Sang-jin, Naver's chief financial officer, said in a conference call. "We pay attention [to tech startups] to avoid getting lost in changing trends."
Naver said it made the Ledger investment last month via K-fund, a vehicle launched with Paris-based investment company Korelya Capital, which is run by France's former digital economy minister, Fleur Pellerin.
The South Korean company is looking for new income sources after earnings growth slowed last year. Revenue rose 16.7% on the year, to 4.6 trillion won, while operating profit increased 7%, to 1.1 trillion won. Net profit inched up only 1.5%, to 770.1 billion won.
This was a setback from 2016, when revenue had jumped 23.6% to 4 trillion won, with operating profit surging 32.8% to 1.1 trillion won. Net profit had soared 47.1% to 759 billion won.
Its aggressive investments also come as smaller domestic rival Kakao pushes into online-only banking, with the launch of Kakao Bank last year. The bank's total deposits reached 3.3 trillion won in September, with total lending of 2.6 trillion won.
Kakao is to announce its earnings for the fourth quarter on Feb. 8.
Naver said it is expanding its AI platform, called Clova, in cooperation with a wide range of manufacturers, such as builder Daewoo E&C, telecom company LG Uplus and food delivery startup Baemin. Clova's voice assistant allows users to control home appliances and place orders, the company said.
Naver hopes its investments will diversify its revenue sources. It relies heavily on advertising, as well as the Line chat app and other affiliates.
For the fourth quarter, 46% of its 1.2 trillion in revenue came from business platforms, such as charging retailers for ads on its shopping search service. It earned 129.6 billion won directly from advertising, up 5.4% on the year.
The business platform segment is geared toward small-business owners who want exposure through recommendations in related searches. Larger companies prefer direct ads, like banners, which are displayed prominently.