 SK Communications CEO |
By Cho Mu-hyun
SK Communications is attempting to revive its aging social networking service (SNS) Cyworld, evidenced by a recent upgrade but is unlikely to reaffirm its hegemony due to the rise of Kakao Story.
The content-making affiliate of SK Telecom has been spending substantially on marketing and investment on new features for a mobile version of Cyworld but industry officials say no amount of work will save it in the face of rising foreign and domestic players.
The firm launched an updated app last month “optimized” for smartphones.
According to SK Communications, it marked 4.5 million downloads in its first week, and the rate at which users uploaded pictures rose 46 percent and visitors to individual pages was up 22 percent.
Some added features include easier access to picture databases, where users can search and upload all the pictures they have accumulated for over a decade since the service launched. A new “shake it” feature allows a visitor to let the owner of a page know they were there by shaking the handset with the page uploaded.
The biggest boost came for Cyworld when singer Psy’s video “Gangnam Style” went viral on YouTube. He was SK Communication’s endorsement model before his song became a global hit and still uses his Cyworld page actively, securing some 1.5 million visitors last week for the SNS by himself. “Psy’s popularity did seem to make the company see a surge in users,” said a Seoul-based analyst requesting anonymity.
It has been using the situation to its advantage, hosting a Psy concert earlier this month exclusively for Cyworld subscribers that saw 10,000 people head to Jamsil Stadium.
However, industry observers say no amount of promotion will save the service from decline.
“What is unfortunate is that the results were lackluster considering the high amount that went into marketing and promotions,” said the analyst. “Because it already had a negative brand image as an old service, no efforts by the company will save its inevitable end.”
The analyst said a truly differentiated service is needed to compete against rising players especially Kakao Story.
The SNS service launched by mobile messenger Kakao Talk currently has over 2.8 million users at just six months old. Cyworld has around 2.7 users, despite its mobile version being released last year.
The main reason for Kakao Story’s popularity is due to its connection with the firm’s free mobile messenger that has around 60 million users, industry officials said. “Like many players who misjudged the value of the mobile platform, Cyworld’s failure to shift its focus to the new market and away from desktops has major consequences,” said an official from a domestic Internet company.
Kakao Talk has vowed to improve the contents of its services and has kept its word. Ani Pang, a recently launched social puzzle game available from its game center launched in July. It is generating 200 million won a day. The company plans to create a service that allows players to post game results on Kakao Story, which will have a huge promotional effect.
“We plan to add new functions to Kakao Story to boost usability and improve communication convenience,” said a company spokeswoman.
“Honestly, none of the people around me use Cyworld anymore but prefer Kakao Story,” said Jang Eun-hyun, an officer worker in finance. “It seems to me that Cyworld is like an old photo album that you just occasionally check now and then.”
Foreign rivals Facebook and Twitter pose a continuous threat as well. “It will be difficult for Cyworld to maintain even a No. 2 position if the current plight continues,” said the official.
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