Is homegrown Cyworld giving in to Facebook?

By Yoon Ja-young

Cyworld, a local social networking service (SNS) that led the market for the past decade, is threatened by Facebook. The number of monthly visitors to the site was beaten by Facebook for the first time, according to recent statistics.

According to Rankey.com, 15.9 million visited Cyworld Mini Hompy, an abbreviated homepage service, as of August, which
represents a substantial fall from the previous monthly average of some 18 million.

Visitors to Facebook, meanwhile, amounted to 16.3 million last month, multiplying by around 16 times from January last year.

Rankey.com explained that those in their 30s and over are increasingly clicking into Facebook.

Cyworld is still dominant among young users. Among Cyworld visitors, 7.2 percent are teenagers, while the ratio of the age group stands at 3.4 percent among Facebook users. Those in their 20s take up 41.7 percent of Cyworld visitors, while they account for 30.3 percent of Facebook users.

Middle-aged users, however, tend to prefer Facebook. Those in their 30s take up 40.7 percent of Facebook visitors, while the age group takes 35.2 percent of Cyworld.

“Cyworld, which led the local SNS market during the past 10 years, is falling while Facebook is growing steeply. It is exciting to watch how the SNS market will change in the future,” a representative for Rankey.com said.

The fall of homegrown SNS

The country was one of the first to breed SNS businesses, such as “I Love School” and “Cyworld.” The former, which turned into an online shopping site, fails to make its presence felt while the latter has been stagnant over the past few years.

And Cyworld is suffering from a negative network effect _ those who have defected to Facebook say that they are following their friends.

“I don’t know why, but it seems that people started getting bored with Cyworld. I have an account there, but I haven’t updated it for more than a year. I sometimes log on to the service, but I see that my friends aren’t making any updates, either,” said Kim Eun-jeong, a middle school teacher in her early 30s who opened a Facebook account last year.

Facebook could expand users here thanks to being a global service. According to the statistics of the education ministry, the number of adults who left the country to study overseas last year totaled 251,887, up 4.5 percent from 2009. Since most of them make foreign friends and they would want to maintain contact them on a SNS, Facebook is an inevitable option.

Cyworld, meanwhile, could not chalk up tangible results in its globalization efforts.

It did advance into the overseas market in 2005, providing services in the United States, Germany, Taiwan, Japan, China and Vietnam. Currently, it provides services only in China and Vietnam.

Cyworld admits it adopted a wrong strategy.

“At that time, we focused on providing localized services in each region. Hence, there was no communication between Cyworld users in different countries,” a representative for SK Communications, which operates Cyworld.

She said it is taking a totally different approach for global services it is preparing. Cyworld plans to launch a global service again within this year.

“It will be a global platform. Users will have only to choose their language. We are currently working on tackling the language barrier so that global users can be easily connected,” she said.

Simple service on one open platform

On top of the one platform strategy, Facebook succeeded as it opened the platform to the third party developers so that they could provide diverse services that users want. They can enjoy diverse applications and games and easily share news and postings from other sites.

The Facebook service is also simpler in terms of design and function, and thus better suits smartphones and tablets. Cyworld, meanwhile, provides splendid graphics, and thus the platform is too burdensome in countries with poor Internet networks. Cyworld plans to lighten the load.

“As we’ve added many services to Cyworld during the past 10 years, the service isn’t light. We plan to show core services first in global market as those unfamiliar with Cyworld may find it dizzy and heavy,” the representative said.

Some point out that government regulations that demand real-names on Internet hampered Cyworld. People should verify their real names, usually by entering their resident registration number to subscribe to the Internet service, but it ended up providing too much personal information vulnerable to hackers. Cyworld and its sister portal Nate recently had information of its 35 million users stolen by hacking.

Cyworld, however, said that the real-name system enhances trust between users. “You accurately know who he is and where he lives. It makes the communication more enjoyable,” the representative said.