By Kim Tong-hyung
Staff Reporter
The success of Apple's App Store for its iPhone and iPod Touch is prompting other tech companies to follow suit, and it seems that South Koreans are no exception.
Electronics makers such as Samsung and LG and telecommunications operators like SK Telecom and KT are all planning their own versions of online markets for mobile application software, or ``apps.''
But perhaps bigger traction could be generated by Internet companies that are also leaping onto the App Store bandwagon, as they already have a rich base of user-generated content and effective consumption platforms in blogs and social media.
SK Communications, SK Telecom's Internet unit and operator of Nate (www.nate.com) and Cyworld (www.cyworld.com), said Wednesday it will introduce an online content store for its users that could create significant business opportunities for software companies and individual programmers.
The company hopes that the App Store, to be launched in October, will provide a powerful tool for developing software for its online services and add momentum to ``Nate Connect,'' a new function that takes a page out of the playbook of Facebook Connect.
Nate Connect will allow users to connect their accounts with partner Web sites, such as shopping malls and online video sites, and share information and content with those on their friend lists.
SK Communications has been desperate to generate more traffic toward Nate, the country's No. 3 Web portal and search engine.
The key is to effectively integrate Nate with the company's two most successful products ― the immensely popular Cyworld social networking service with more than 23 million subscribers and the Nate-On instant messaging services, which has three times as many users as its closest rival, Microsoft's MSN Messenger.
It warrants further scrutiny how much of a difference Nate Connect could make. But Joo Hyung-chul, the president and chief executive of SK Communications, is bullish, predicting that Nate will replace Daum (www.daum.net) as the country's No. 2 online destination behind Naver (www.naver.com) by the end of the year.
This is a bold statement considering the combined page views for Nate and Cyworld currently average around 4 billion per week, compared to Daum's 5 billion. The difference of 1 billion page views is roughly identical to the gap between Daum and Naver, the undisputed industry kingpin.
``In the end, the competition is about traffic. This is where our open policy comes in, as a richer foundation for content ― enabled from a wider range of programmers ― will allow us expanded freedom to develop business models,'' Joo said.
At least in Korea, where expensive data rates by wireless carriers are suspending the mobile Internet explosion, portable devices have yet to emerge as the innovation center for digital content.
Joo said that conventional Internet services, not mobile ones, will generate a more immediate market for programs loaded on App Stores, as Koreans are already accustomed to spending money on online items such as games, multimedia files and cyber accessories. Cyworld, in particular, already has a successful online currency in ``dotori,'' acorn in Korean.
However, Joo also stressed that the company is committed to converting its services to mobile versions, mostly in a tight partnership with its parent, SK Telecom, the country's biggest wireless operator.
``As Cyworld matures, the needs of users are differentiating, as seen in the examples of Facebook or Twitter, and the crowd sourcing of content is becoming critical in social platforms,'' said Ahn Jin-hyeok, an official from the SK Communications service planning team.
SK Communications will open its application programming interface (API) to allow programmers to create content that will be loaded to Dev.Square, a site for developers. The programs reviewed and permitted by SK Communications will be available for download at the Nate App Store. Users could make purchases through dotori cyber money and install the content on their Cyworld pages and other Nate online services.
The company has yet to decide how to divide revenue with developers.
A total of 12 companies, including multinational gaming giant Electronic Arts and other online content developers such as Play Fish, Large Animal Games, CookApps and Geo Lime, have expressed intentions to provide their programs on the Nate App Store.
Customization and openness are also keywords for Nate Connect. Aside from providing a one-stop gateway for the online experience, users will also be provided real-time updates from the Nate partner Web sites they access, enabled through Nate-On, which will also create new opportunities for the companies and advertisers involved. For example, users can receive instant feeds on the delivery status of products they ordered from shopping malls, the latest programs on movie sites and job openings from recruitment agencies.
About 48 companies have so far signed up as partners, including online shopping sites Auction (www.auction.co.kr) and 11th Street (www.11st.co.kr), online video destinations YouTube (kr.youtube.com) and Pandora TV (www.pandora.tv) and job search site Incruit (www.incruit.com).
An open ``scrap API'' also means that Cyworld users can attach video clips from YouTube and other partner sites to their personal Web pages with just a click or two of a mouse, company officials said.