Saturday, May 03, 2008
Cyworld and Korean Social Networking
My previous post notes cultural aspects of global online social networking. I cite Korea-based Cyworld. This article gives more insights into Korea social networking and Cyworld.
Finding old friends and peeking at ex-boyfriend's photo albums are what Cyworld could do for Internet users. But the popularity of such social networking sites is beginning to wane in South Korea, as people have become fully connected with each other on the Internet and do not expect more networking in the virtual world.
Both local and foreign-made online community sites are losing growth momentum here this year, unlike their growing popularity in the United States, Europe and the rest of the world.
SK Communications, the operator of Cyworld, said Friday that its revenue from the service decreased by 6 percent in the first quarter of the year, compared to the same period last year. Its sales were 19.3 billion won in the first three months of the year, down from 19.8 billion won in the previous quarter.
The lackluster performance from the social networking service cost the firm dearly. It reported 4.3 billion won in operating losses and 5.6 billion won in net losses. The company sells music and other items to users with a virtual currency called the ``dotori,'' so they can decorate their homepages to show them to visitors.
``We will soon have a renewal of the sites and we also have new services coming up, so we will have a better performance in the second half of the year,'' said chief finance officer Song Jae-kil in a statement.
Cyworld boasts more than 22 million users in South Korea, a country with nearly 50 million people. It has pioneered the social-networking field since 1999, years before the better-known Facebook and MySpace appeared in the United States.
Its strong presence has ensured both Facebook and MySpace have limited influence in South Korea. Last month, MySpace opened its Korean subsidiary and a Korean-language page. But a fancy celebration party in Hongdae couldn't impress Korean users.
In the first week of service, the number of visitors to the site was 29,000, about one 20th that of Cyworld's, according to Web research firm KoreanClick. Another research firm Rankey.com ranked MySpace as the 981st most visited Web site in Korea, Friday, with a 0.08 percent of the share in the social-networking market _ a pitiful figure for a company of global caliber.
``It has been only two weeks since the launch of MySpace Korea, so we think it will take some time for Korean users to get accustomed to it,'' said Lee Ji-eun, manager of MySpace Korea.
SK Communication's Cyworld hopes that it can break the deadlock situation in June when it upgrades its service to a three-dimensional virtual world, where users can control their virtual selves as if they are playing an online game. But the plan has been greeted with skepticism in the Internet industry, which has witnessed the failure of similar 3-D services in the past, including the Korean version of Second Life.