Digging deep into Korean Web Service History

Oct 17, 2014YJ.Min

14년 10월 26일 일

Korean Web/App Service History

1994KoreanInternet ServiceBegan

1997HanmailYahoo!Korea

1998Auction

1999Daum CafeSayclubCyworldiLoveSchoolJuniorNaver

2000FreeChalSoribadaBuddyBuddyHangame

2002~3Knowledge SearchPortal NewsNaver BlogNaver Cafe

2004Cyworld BoomParan.comGmailPandoraTV

2005Blog Blogger NewsYoutube

2006~7TVPotAfreecaTVTistory

2009iPhoneMapsRoad View

2010Kakao TalkMypeopleFacebookTwitter

2011~12LINE JapanBandKakao Story

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Appearance of Internet Portals

• 1995, Daum was established.

• 1996, Simmani, Empas establishment

• 1997, Yahoo, Altavista, Lycos entered in Korea

• 1998, Hanmir, Netian

• 1999, Naver was established.

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Various web services(1)

• 1998, Auction, INIpay by INITech

• 1999, Daum Cafe

• 1999, Sayclub

• 1999, Cyworld

• 1999, iLoveSchool

• 1999, Hangame

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Various web services(2)

• 2000, Freechal

• 2000, Ohmynews

• 2000, Soribada

• 2002, Naver Knowledge Search, Cyworld MiniHompy

• 2004, Cyworld boom

• 2005, Blog, Video services

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Case 1. iLoveSchool

• Provided online alumni community, search options by school, name and birth year.

• Got over 5 million subscribers during the first year

• The second largest traffic in 2002 by Alexa.com

• Small equity of founders(1.5 mil KRW) | As the exponential growth of subscribers, got investments too early. Denied Yahoo’s acquisition proposal.

• Reasons why it failed. (From the founder’s interview & Internet)

• didn’t prepare successes & scale-ups

• investment & startup environment in 1990’s

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Case 2. Freechal

• Meaning : Freedom+Challenge. The free online community service

• Over 10 mil subscribers, 1 mil communities from 2000 to 2001

• Providing special features to manage communities, share information. Popular among college students, researchers, etc

• In 2002, decided to charge to users -> Users started to switch to Daum Cafe and Cyworld

• In 2011, Freechal Corp went bankrupt, and freechal community service was closed in 2013

• Reasons why it failed

• picked the user-charge model BM under pressure.

• Failed to response to the new trends such as SNS, video, etc14년 10월 26일 일

Case 3. Daum

• In 1997, launched Hanmail, the free web mail service

• In 1999, launched Cafe, the free web based community service

• In 1999, IPOed successfully.

• Overtook Yahoo Korea and was able to be the no.1 portal in Korea

• Launched various innovative services such as MediaDaum, TVpot, Tistory, RoadView, etc. Developed its own search engine.

• Late to enter the search ad market, failed several abroad businesses, Naver overtook Daum around 2005.

• At the end of 2012, total market cap was over 1 trillion KRW.

• merged with Kakao Inc. to form DaumKakao on Oct 1, 2014.

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Case 4. Naver

• In 1998, Launched the Naver service

• In 2000, merged with Hangame, built NHN Corp.

• In 2002, Launched Knowledge Search, IPOed.

• Launched Blog, CafeIN, etc. From the search service, Naver was able to overtake Daum around 2005.

• Annual revenue exceeded 1 trillion KRW, well-diversified business models such as search ads, display ads, e-commerce, and game in 2008.

• Got over 70% of search market share. The no.1 Korean portal. Huge success of LINE in Japan and other countries.

• Objections related to its political bias, search tech, and fast second strategy as a leading Internet portal.

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Case5. Cyworld• In 1999, started as an online community site mainly providing

group & club services.

• In 2002, launched a Minihompy-style service.

• In 2003, acquired by SK Communications Corp.

• In 2004, Minihompy boom, a social network syndrome in Korea

• Successfully implemented a digital item business based on a strong SNS platform. Allowed users to buy digital decoration items, games, even music streams with its own cyber-money.

• Failed to expand the service overseas. Failed to create new services integrated with Cyworld services. Couldn’t lead the new service trends such as blogs, mobiles.

• Spin-offed as a separate venture firm by employees’s investment.

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Remind 1994

• The commercialization of Internet was fast.

• The growth of Internet penetration, and fast development of nation-wide Infrastructure forced the appearance of new web based service development.

• In the early of 1990’s, Korean web services were advanced and well-developed compare to other countries’ services in terms of tech and idea.

• Because of its openness, web-based services were able to disrupt original businesses and services fast.

• Several web based services providers were listed successfully.

• Overheating investments for web based companies.

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Remind 2004• Only few web service providers were survived after .com bubble

burst.

• The emergence and collapse of Internet portals. e.g> Yahoo Korea, Daum,Naver, Paran, Nate

• The rising of online community services such as Cafe, Minihompy, blogs. Social impacts of those services was growing.

• The changes of online contents consumption.

• Various business models - Internet ads, search ads, digital item, online commerce - were commercialized and got huge growth.

• Several players entered abroad markets given its success in Korea, but most of them failed.

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Current, 2014

• What is the future of WWW after the mobile big-bang? HTML5, WebApp, Responsible Web?

• The fast transition from the PC to the Mobile drives the growth of total Internet based businesses.

• Easy to test foreign market with mobile services. As Korea has a enough bandwidth networks and mobile/Internet penetration, players could create and test its innovative services in Korea.

• The same bubble burst? or New survival models?

• Even though common mobile app market could be saturated in near future, the market needs for new models could be grown as the connectivity between various devices(home appliances, cars, wearable devices) was evolved.

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Thank you!

More discussion : YJ.MinE-mail : neofox@daum.netTwitter : @yjmin

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