Cyworld fights back Facebook-Twitter onslaught with C-Log

Established in 1999, Cyworld provided the social networking industry in Korea with one of its earliest mega-success stories, exploiting the digital-camera boom and demand for personal web pages to grow into a business that now boasts 25 million users.

Defending its supremacy, however, may require blowing up and rebuilding the core of its business model as Cyworld officials begin crucial discussions to determine how the company will balance privacy and the pursuit of profit.

Established in 1999, Cyworld provided the social networking industry in Korea with one of its earliest mega-success stories, exploiting the digital-camera boom and demand for personal web pages to grow into a business that now boasts 25 million users.

SK Communications, the Internet company that operates Cyworld and the web portal Nate (www.nate.com), has long been claiming credit for providing the blueprint for global services like Facebook and My Space (www.myspace.com).

Terry Lee, head of SK Communications’ portal service division, believes that the company’s new social networking service, C-Log, will determine how it competes with foreign services like Facebook.
/ Courtesy of SK Communications

By Kim Tong-hyung

Cyworld (www.cyworld.com), the local social networking kingpin, vows to hold its fort against the invasion of massively-popular foreign services like Facebook (www.facebook.com) and Twitter (www.twitter.com).

Defending its supremacy, however, may require blowing up and rebuilding the core of its business model as Cyworld officials begin crucial discussions to determine how the company will balance privacy and the pursuit of profit.

Established in 1999, Cyworld provided the social networking industry in Korea with one of its earliest mega-success stories, exploiting the digital-camera boom and demand for personal web pages to grow into a business that now boasts 25 million users.

SK Communications, the Internet company that operates Cyworld and the web portal Nate (www.nate.com), has long been claiming credit for providing the blueprint for global services like Facebook and My Space (www.myspace.com).

A favorite story for company officials is how they showed the ropes to a younger Mark Zuckerberg when he visited SK Communications’ Seoul office earlier in the decade, obviously before Facebook became the global epidemic that it is today, although unable to present proof of the Facebook founder’s visit.

But despite all their self-touting about originality, it could be said that Cyworld and Facebook are entirely different animals that find themselves on opposite ends over how they approach and value the privacy of members.

To put it bluntly, Cyworld can be described as a neat, online extension of the real world, where users share their photos, status and interests with their immediate friends in a closed and inter-connected space.

Facebook, on the contrary, is dependent on those who are willing to lower their privacy fences to expand their social circle, eager to share information with strangers in the hopes of bulking up their social network. And there are plenty of these users, as Facebook’s 500 million-plus customers could attest.

Needless to say, the immense success of Facebook and the slew of me-too products that have flooded the scene since present a dilemma to Cyworld, which appears to be in danger of ceasing to be interesting.

Even SK Communications officials admit that the sustainability of a social networking business will depend on its ability to encourage subscribers to share more of their information to a wider public.

Critics believe that SK Communications’ timid approach on privacy has prevented it from creating a ``network effect’’ worthy of its massive customer pool, and the company now faces a tough balancing act that could very much determine the fate of its social networking business.

And C-Log, a new social networking platform that entered beta phase in September, represents SK Communications’ most important attempt at finding the elusive solution, according to Terry Lee, the company’s senior vice president and head of its portal service division.

``If there is anything Cyworld has proven, it’s that giving users the power to restrict information about themselves and effectively control their content are extremely important, especially in Korea where Internet users are more sensitive about privacy. However, the expanding popularity of Facebook and Twitter, fueled by the explosion of smartphones and other mobile Internet devices, shows that users here are also wanting to create a social circle that goes beyond their immediate friends, and C-Log will represent an important experiment on whether we can deliver on both sides,’’ said Lee in a recent interview with The Korea Times at SK Communications’ head office.

``C-Log is currently operated independently to Cyworld and its `mini-homepages,’ and through the beta period, we will have to determine whether the two platforms will continue to develop as separate services or consolidated into one. The answers we reach on the privacy matter will obviously dictate our decision.’’

Lee said that the company has yet to decide on the timing of C-Log’s commercial launch.

At first glance, most striking impression of C-Log is how similar it is to, yes, Facebook. The ``gather-and-see’’ function, somewhat of an alternative homepage that provides users a constantly updated list of their friends’ C-Log activities, is similar to Facebook’s ``News Feed,’’ while the ``identify’’ function allows users to share content on other websites, much like Facebook’s ``Like’’ button.

However, C-Log is tighter about privacy than Facebook is now, Lee said, providing users a variety of controls to command the flow of their discussions, including the ability to decide what other member can and cannot see. Tighter user verification also prevents a person from creating multiple accounts, Lee said.

It bears further watching whether SK Communications can find a way to effectively leverage Cyworld’s massive customer pool in establishing a foundation for C-Log, despite the latter being developed as a significantly more open service than the former.

``The most active users of Cyworld continue to be women in their teens and early 20s and we are continuing to get an influx of younger members. However, there is significant demand among users in the 30s and 40s for a more open service that that enables them to build a larger social network, and C-Log was designed to target them,’’ Lee said.

``This could be explained as a natural course of development _ how our members used Cyworld when they were younger could only be different of how they will use it as adults, when job responsibilities, families and other factors begin to impact their real-world lives. C-Log certainly represents our direction for the future as it offers users to convert from a vertically-integrated social network to a horizontal one, but we don’t know how fast we should be pushing the changes yet.’’
Cyworld had repeatedly attempt to renew itself over the years, but the efforts yield mixed results, with its ``C2’’ blogging services and ``Mini-Life’’ virtual reality functions failing to generate significant buzz.

SK Communications also released ``Connecting,’’ a Twitter-like micro-blogging service where users can broadcast their real-time status in short messages, earlier this year, but the reception among users here has been rather lukewarm.

Obviously, there’s a lot at stake for SK Communications in C-Log, and Lee hopes to give the new service a jolt by creating a vibrant developers’ community. The lack of third-party content has been a knock on Cyworld, unlike Facebook, which benefited greatly by ``social games’’ and other entertainment content developed by other companies.

SK Communications is trying to solve this problem by operating its own content platform in the ``Nate App Store,’’ which was launched last year. The applications on the Nate App Store have been downloaded more than 20 million times by the users of Cyworld and Nate since then, according to SK Communications.

While the company is focused on defending its home turf against foreign competitors, it’s also renewing its efforts to export its services. SK Communications had tried but failed to expand Cyworld in markets such as the United States and Taiwan, but Lee believes that the global boom of smartphones will provide a better shot.

The company plans to package C-Log with its ``Nate-On UC,’’ which allows users a one-stop access to e-mail, instant messaging, social networking updates and telephony functions. Nate-On UC has been catching on quickly with Korean users, thanks to the vast customer pool of the Nate-On instant messaging service, which has more than 30 million users and blows Microsoft’s competing services out of the water.

``Cyworld and our other social networking services have been epitomized for the digital camera generation. Re-tooling our services to better reflect to the era of smartphones and their built-in cameras will be an important challenge for us,’’ Lee said, adding that about 10 percent of Cyworld and C-Log’s traffic is generated from mobile devices.

thkim@koreatimes.co.kr