August 11, 2006 1:28 PM PDT

Korean social-networking site hopes to nab U.S. fans

It's arguably one of the oldest and more successful social-networking sites in the world, and it's now coming to the U.S.

Cyworld, a site based in South Korea, kicked off a beta in the U.S. on July 27 and later this month will formally begin a nationwide tour to encourage Americans, particularly those in the age 18 to 29 demographic, to create personalized Web pages, or "mini-homes," on the site.

Henry Chon, CEO of Cyworld USA, won't say how many people the beta site has attracted, but said the number is "way more than we expected."

Although most Americans are unfamiliar with the service, it's an inescapable fact of life in broadband-saturated South Korea. Approximately 18 million people in the country, or 30 percent of the population, have accounts with the service, according to Cyworld.

"Even if Cyworld is coming into a market that some people say is crowded already, I think we bring a nice alternative to other services."
--Henry Chon, CEO, Cyworld

More than 90 percent of South Koreans age 20 to 29 have Web pages on Cyworld, Chon said, and close to 92 percent of them use the site "almost daily." In other words, about 80 percent of 20 to 29 year olds in the country stop somewhere on the site close to every day, which has made Cyworld popular with advertisers.

The service, which started in 1999, has since expanded into China, Japan and Taiwan. It now has 2 million users in China.

Although sites such as MySpace.com have already taken hold in the U.S., Cyworld will try to carve out a place in the market by differing in tone.

"A lot of social-networking services are like going to a concert in a big stadium. You have loud music and 40,000 to 50,000 people in a stadium," Chon said. "Everybody is having a great time, but you will probably never see them again."

By contrast, Cyworld attempts to facilitate communications between people who know one another: new parents who want a site where relatives can go to see the latest pictures of their baby; friends at different colleges who want to stay in touch. Overall, the demographic on the service skews slightly older.

"People will have multiple accounts on multiple services for different purposes," Chon theorized. "We don't have to take people away from other services. Even if Cyworld is coming into a market that some people say is crowded already, I think we bring a nice alternative to other services."

In South Korea, Cyworld also functions as an extension of people's mobile phone. Using a camera phone, they take a picture of what they're eating for lunch, post it to their site and send a text message directing friends to the latest update. The ability to post from a mobile phone will come to the U.S. too.

The company gets revenue from advertisers and from hosting corporate-sponsored pages. But it also sells background screens, charms and other graphics to decorate individual sites. In South Korea, users can pay to have music streamed onto their site as well.

The decorative services account for $300,000 a day in revenue, Chon said. "We sell more than $100 million a year in those sales. That's U.S. dollars," he said.

MySpace is expected to garner revenue of $180 million this year from all its services, according to research firm eMarketer. But MySpace has a base of 100 million members, five times as many as Cyworld. Thus, Cyworld garners more revenue per member than MySpace.

To keep up with demand for novel graphics, the company employs 4,400 graphic artists in Korea. It will hire artists in the U.S. as well, Chon said.

Social networking took off early in South Korea, largely because of the proliferation of broadband. After the monetary crisis of the late 1990s, the government funded the creation of a massive cellular and broadband network that covers most of the country. Partly as a result, the country has become one of the global centers for online gaming, electronic homes, consumer electronics and development work for third-generation and fourth-generation networks.

"In the U.S. we didn't get meaningful penetration of broadband until a few years ago," Chon said. "The U.S. still trails Asia."

So far, Cyworld has avoided some of the predator problems that have hit MySpace. Mostly, that's because of the way the service works in Korea. To sign up for the service, people have to give their national ID number, which is the equivalent of a Social Security number. (Cell phone buyers in South Korea have to do the same to open an account.)

The company will not ask for Social Security numbers in the U.S. so authentication will be far less stringent. Chon, however, said users, like at other sites, can reduce the danger of unwanted advances through filters.

See more CNET content tagged:
South Korea, MySpace, U.S., China, CEO

12 comments

Join the conversation!
Add your comment
It seems interesting
Cyworld seems interesting. But, it's a bit cartoony, which I can see why it has worked well in Asia. Having lived in Japan for a few years, I noticed their high use of cartoon-like pictures and characters in lots of their advertisements.
Cyworld follows this format too.

Would it work in the U.S.? Hard to say. It does offer a number of features not found on mySpace or Friendster. So, if people can pass the cartoony feeling, then Cyworld may do well in the U.S.
Posted by Dead Soulman (245 comments )
Reply Link Flag
Well
I dont noe about it being Cartoonish.
Those characters in the video are called Avatars
They are just...there for some reasons;;just to make Cyworld interesting proving that Cyworld is a Cyber-World
They are not very important, so I am curious why they come on video so many times
Posted by roawoo (22 comments )
Link Flag
A Natural Extension
In my view asian social networking sites could beat any american social networking sites in the long run. It is not the technology it the way asians behave in their societies. Once the technology is given Asians spend more time communication with their kith and kin than any other people in the west. Please note that I am not culturally biased. It is my personal observation for several years.
Posted by andhrizz (1 comment )
Reply Link Flag
Not as Cartoonish.
I read another article about cyworld entering the US and they stated that they are trying to remove all the cutesy stuff they can to suit the american market better. I just hope they do a good job. :p
Posted by koralex90 (2 comments )
Reply Link Flag
Not as Cartoonish.
I read another article about cyworld entering the US and they stated that they are trying to remove all the cutesy stuff they can to suit the american market better. I just hope they do a good job. :p
Posted by koralex90 (2 comments )
Reply Link Flag
Depends on how well they adapt to North American culture
There is a difference in the way cultures interact in either Korea or North America and I am sure that will translate in the social networks such as MySpace and CyWorld. Many of the web pages I see young adults interacting with in the MANY cybercafes of South Korea are cartoonish and cutsie. You see Koreans wholed up in little cubicles that have computers with web access and cameras attached as young men and women switch cameras on each other and pass messages along (if they are not busy playing Warcraft, Starcraft or some variant). In the Americas young adults and teens would most frequent their MySpace at home or at school. Korean society seems a little segregated between men and women too. Having been to their factories several times I notice in their work environment males would go to work in one building and females in another. Whereas Men and Women in North America tend to work in the same fields and positions along side each other - and often socialize after work or school at house parties or other activities. In other words the social needs between Koreans and North Americans may be somewhat different.
Posted by krustykanuck (94 comments )
Reply Link Flag
As an user, it is so useful
I am Korean and I find Cyworld so useful
I was able to find my long lost friend by just searching his name on Cyworld and using process of elminations by age and gender. It is true that 30% of population uses Cyworld even some Korean celebrities. I do not know if it is similar to MySpace but I am just happy that I was able to find many friends of mine dating back to Elementary and Middle School.
Posted by roawoo (22 comments )
Reply Link Flag
hi,
i just registered on cyworld USA because i thought i could find my old korean friends too...
but i can't find their profiles...
as i don't read korean i thought that registering with us.cyworld would allow me to see their profils...
i'm so disappointed...
does anyone of you have a solution for this problem or so?
thanks a lot! ;)
Posted by kemi6 (1 comment )
Link Flag
As an user, it is so useful
I am Korean and I find Cyworld so useful
I was able to find my long lost friend by just searching his name on Cyworld and using process of elminations by age and gender. It is true that 30% of population uses Cyworld even some Korean celebrities. I do not know if it is similar to MySpace but I am just happy that I was able to find many friends of mine dating back to Elementary and Middle School.
Posted by roawoo (22 comments )
Reply Link Flag
Why do they block you from adding Koreans?
Why do they block the two Cyworlds from adding each other as friends, although they are able to track you if you try to open an ID in both Korea and the USA? If I am wrong about what I've heard here, please correct me. I live in South Korea, and enjoy Cyworld. Yes, it's huge here, but I also experience the racism and xenophobia Korea has against non-Koreans. For example, sometimes I walk down the street with my Korean girlfriend, and people swear at me or her in Korean. Foreigners here are discussing why Korea will not allow the two Cyworlds to interact with each other, and wonder if racism and xenophobia have something to do with it. Again, correct me if something is incorrect here.
Posted by dfichtner (74 comments )
Reply Link Flag
Please Save Dave
Cyworld has a very compotent business model.

My latest idea.
<a class="jive-link-external" href="http://www.pleasesavedave.com" target="_newWindow">http://www.pleasesavedave.com</a>
Posted by PleaseSaveDave (4 comments )
Reply Link Flag
Ahdeee New Asian Network
There is also a new korean social networking website coming to america name Ahdeee

<a class="jive-link-external" href="http://www.ahdeee.com/" target="_newWindow">http://www.ahdeee.com/</a>
Posted by asiankid2007 (1 comment )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.