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Summary:

By Jackson West Korean social-network juggernaut Cyworld has landed on American shores, with a new office in San Francisco. The social-networking service has reached saturation among young South Koreans, with reports estimating 90% of people in their late teens and early twenties as users according to […]

By Jackson West

Korean social-network juggernaut Cyworld has landed on American shores, with a new office in San Francisco. The social-networking service has reached saturation among young South Koreans, with reports estimating 90% of people in their late teens and early twenties as users according to Businessweek Online. A division of mobile wireless provider SK Communications, the company has already expanded into the Chinese and Japanese markets. How successful it will be in the US, especially against the MySpace?

While the American press is currently obsessed with MySpace, and media positing Cyworld as a potential competitor, the two products are very different in their approaches, though they’re striving for the same demographic users. While MySpace is relatively open to modification and third-party functionality, Cyworld is a walled garden. But Cyworld’s look and feel is very attractive, whereas MySpace pages are often eye-numbingly awful. And Cyworld is immensely profitable, reportedly earning over $12 million on revenue of $110 million.


Mini-homepages, or hompy, have long been a fact of life in Korea, and were often pointed out as hampering the growth of the Korean blogosphere. Like MySpace pages, they were often an eclectic mix of graphics, audio and text messages, with an array of online vendors selling hompy content for nominal fees. What Cyworld has done is integrate all the features of the traditional hompy into a nice package, complete with an internal economy and mobile access.

Cyworld promises to be anathema to hardcore geeks because of its rather blatant commercialism. Users are given a ‘room’ which they can then decorate with grahics of furniture, art, music and other personal touches. But these all come at a price in virtual shekels. The original Cyworld sees about $250,000 change hands in-network. The currency can be purchased via debit, credit, charged to a users mobile account or through prepaid gift cards (an ingenious system I’ve only seen in online porn here in the US). Users can also post their own public updates and photos for free.

Mashable points out that the US market demographics will probably skew even younger than MySpace, and because it’s a closed system and therefore more easily policed, the company may be better prepared to avoid negative stories about explicit content among other things. The look and feel I’ve seen are cute, with pixelated graphics and an isometric perspective like a cartoony version of The Sims Online.

The localized beta has gotten off to a rocky start, first going public but soon after shutting its doors. After contacting the San Francisco office, Red Herring could not get them to pin down a firm release date. While it probably won’t reach the saturation rate stateside that it has in South Korea (approximately 25% of the population, or 15 million users), with smart marketing it could definitely begin adding millions to their already impressive user base worldwide.

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  1. PeteCashmore Monday, April 17, 2006

    Jackson,

    I agree with your analysis – and thanks for the link. I got in briefly during the (accidental) public beta and posted some screenshots:

    http://mashable.com/2006/03/30/cyworld-us-will-it-topple-myspace/

  2. PeteCashmore Monday, April 17, 2006

    Oops – I expected that to hyperlink. Try again:

    http://mashable.com/2006/03/30/cyworld-us-will-it-topple-myspace/

  3. While I usually refrain from issuing wide-sweeping comments, this seems like a mash-up between Second Life and MySpace. This might have great traction with the 11-15 year old demographic, but generally Americans move away from animation-style interactivity going for photo-realism (as in gaming or even the aforementioned Second Life) as they age.

    At the same time, Cyworld adds a new dimension of expression–and THAT is what’s dangerous for MySpace. Cyworld is absolutely right in that it’s about expression, particularly for that age group.

    And while Mashable is absolutely right in the demographics appeal, over-commercialization of said group is bound to bring about the same level of protest from parents as MySpace (unless MySpace really messes up, at which point the “At least it’s not MySpace” argument emerges).

    If I was MySpace, my greatest concern would be a long-term erosion of users as they grow up. All it takes is for the 11-15 year-old group that uses Cyworld to grow up and use a “new” service by Cyworld more like MySpace with seamless transition features.

  4. Cyworld hasn’t worked anywhere but Korea (their Chinese and Japanese launches didn’t go over real big), and those are cultures much more similar to Korea’s culture. CyWorld may attract very small children in the US, but I doubt any self-respecting American teen would use such a thing.

    Also, “immensely profitable” is a bit of an overstatement (“earning over $12 million on revenue of $110 million”). I can guarantee you MySpace does a lot more than that!

  5. I’m betting Xanga is the best positioned to expand its traditional, and still immensely popular, blogging service into more sociably networked services akin to MySpace. Xanga is hiring big for server expansion.

  6. (r)evolution Monday, April 17, 2006

    According to Sky Dayton, Cyworld’s platform will be used to power MySpace for Helio.

  7. Heh. Just checked out Cyworld and a few other posts and articles about them. They are an absolute nonstarter. I mean, please. Just from a different world culturally. No offense, but it’s just doesn’t fit. Even the name -sounds like an 80s flick that went straight to Betamax. I don’t think Myspace will even notice.

  8. I’m a user of Cyworld, mainly to keep in touch with friends in Korea. Cyworld is incredibly compatible with Korean culture, which is obvious given 30% of the population has an account, including pretty much every university and high school student.

    Cyworld, besides the obvious of allowing people to keep in touch with friends and meet friends of friends before ever having met in real life, is also a product of the high level of density in the country and its technological infrastructure. With 50 million Koreans crammed inside half of a tiny peninsula (think 50 million in Ireland), Koreans are a united people by necessity and don’t have much privacy at home or in the streets. Along with the fact that internet per capita is insanely high as is the frequent usage of the internet, Cyworld gives Koreans a chance to create their own world , but more importantly, a private world in which to share with only those they choose. For example, a page may be made accessible to the public, but the photos alone could be viewable by just one’s “friends” or even by no one if the user so chooses.

    And someone mentioned how Cyworld was a horrible name. “Cy” in Korean means relation, so in essence, “Relationship World.” Of course, no English speaker would ever be aware of that. But relationship is key here. Koreans in real life tend to spend time with who they know only. Go to a bar and everyone spends the night with their friends rather than meeting new people. Cyworld gives people a chance to become familiar with each other’s friends before meeting in real life. Also, everyone has a page there. Celebrities, athletes, politicians all use Cyworld to connect with the people, often in favour of actual websites. Somehow I could never see Brad Pitt ever using a blog to connect with his fans.

    Americans and Canadians don’t need to create their privacy online, they have it in their own bedrooms and empty spaces. Nor are they heavy-duty bloggers. You can buy “Cyworld money” at the store in Korea, I can’t ever see that happening in North America. Cyworld was a brilliant idea for the Korean population but I don’t think it will fly here.

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