Posted : 2013-03-13 17:20
Updated : 2013-03-13 17:20

NHN expands investment in start-up companies

By Kim Yoo-chul

NHN, the operator of Korea's Web portal, said Wednesday it will invest more in small local start-up companies to pursue balanced growth and create better eco-systems.

''Since we started the Web portal business for PCs, NHN has been active in both external and qualified business growth by acquiring smaller but competitive local start-up firms. NHN is eager to strike acquisition deals if certain conditions are met,'' said an official at the company.

He stressed NHN's previous mergers and acquisitions (M&A) aimed at offering administrative, financial and technological support for firms to continue their business.

''That's why NHN was very passive on restructuring human resources.''

The expansion plan comes as debate heats up over whether NHN is killing local start-up firms, after the operator confirmed its plan to release a fashion mobile application, ''Wonder.''

Critics say NHN copied the business idea of local venture StyleShare.

''It's no exaggeration to say NHN is killing start-up firms. Critics say NHN's fashion app just copied StyleShare. But we don't think StyleShare's fashion app is completely new,'' said Choi Hoon, an analyst at KB Investment and Securities.

According to the analyst, the market for fashion mobile apps has been expanding thanks to a flurry of such products from mobile carriers and entertainment companies.

The NHN official said its Wonder application is one of several social network service (SNS) tools and emphasized the app is different from that of StyleShare in specifications.

Mentioning Facebook's recent acquisition of photo-sharing services firm Instagram for some $1 billion, the NHN official said mobile applications have high growth potential and are seeing faster evolution with changes and fine-tuning.

''There are many variables and conditions. Everyone wants to become a leader in the mobile application market, like Kakao Talk. Even large companies failed to yield returns despite huge investments. The rules of the game should be redefined,'' said the NHN official, stressing that the firm has no interest in stealing business ideas from smaller ventures.

''NHN is being asked to improve an eco-system for mobile apps in a positive way by partnering high-tech venture firms. We will lead the way. NHN is influential in Korea. But we are also challengers to Google and Facebook. Survival is the key for us. It doesn't make any sense to copy ideas for revenue for the short-term,'' said the official.

NHN had won board approval to inject 40 billion won ($36.4 million) each in Camp Mobile and Line Plus as part of its strategy to focus more on its mobile business.

Under the plan, NHN will fully own Camp Mobile, which will pioneer NHN's new mobile services. The company has a 40 percent stake in ''Line Plus'' with its Japanese affiliate NHN Japan holding the remaining 60 percent.

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