Internet’s Next Step: TV, Mobile and Everywhere Else

The past decade has witnessed a dramatic growth in the Internet population. The number of people accessing the Web has grown 20-fold in 10 years to about 1.2 billion this year. Of them, 436 million are based in Asia, well above the 321 million in Europe and 233 million in North America, according to Google statistics.

Smart, Tailor-Made Services Will Make Web More Practical, Personal

By Cho Jin-seo
Staff Reporter

The past decade has witnessed a dramatic growth in the Internet population. The number of people accessing the Web has grown 20-fold in 10 years to about 1.2 billion this year. Of them, 436 million are based in Asia, well above the 321 million in Europe and 233 million in North America, according to Google statistics.

For ordinary people outside the IT industry, the image of the Internet is Google, Naver, Youtube and e-mails. But in fact, the Web is much more immensely involved in everyday life regardless of whether we recognize it or not.

Consider these striking reports. Almost a half of salaried workers in Korea said that they are constantly monitoring stock prices while at work, to a degree that a half of them feel distracted by it. It is the power of the real-time Internet trading systems that keeps the eyes of a half of the country's workers fixated on red and blue stock charts when they are supposed to be at work.

Another report from Gfk NOP, a U.S. market research firm, says that an average Korean spends 9.6 hours online a week, while they spend only 3.1 hours in reading printed materials such as books, newspapers and magazines, which means that the World Wide Web has replaced books as the largest source of knowledge, at least in terms of quantity.

In business, the influence of the Web is even greater. ``The Net has turned nearly every business into a global business and every customer into a global consumer,'' Forbes noted on its Oct. 25 issue. The magazine said the Internet has transformed 10 markets in the United States _ accounting and tax, collectibles and fine arts, media, political donations, real estate, retail, software, stocks, and travel.

The situation is not much different here _ removing tax, political donations and real estate from the Forbes list and adding clothing, electronics and food to it may complete a top 10 list for South Korea.

Sometimes the Internet demolishes old industries. The book industry is a good example: Not many mom-and-pop bookstores have survived the past decade in South Korea since the emerging of online bookstores such as Yes24, Interpark and Aladin. Even major offline bookstores such as Kyobo and Youngpoong are so worried that they have lobbied the government to put a 10-percent discount limit on books sold online last month despite outcries from consumers.

Experts believe that in the coming decade the Internet will keep connecting more aspects of human life online.

It is easy to imagine that funny, eccentric gadgets will appear, say, a surf board with an embedded wireless Internet PC. ``I can surf the Internet while waiting for the next wave,'' remarked Vint Cerf, a Google executive and a famous Internet visionary, while he was in Seoul last month.

Putting the idea of web-surfing board aside as a joke, Cerf and other experts in United States and Korea alike say that new technologies will very soon make the Web be implemented in mobile phones, TVs and many other gadgets. They also say that Internet services will perform like a know-it-all personal secretary, as it becomes smarter and more personalized to cater to individual's demands for different information and knowledge.

Web Time on Mobile Phones

Using the Internet on the mobile phone is not a new story. Apple launched the iPhone this summer in the United States and in the fall in Europe, which enables users to surf the Web using its touch-sensitive screen and Wi-Fi wireless Internet access, like a mini laptop PC does.

Such Internet-tailored phones are not available in South Korea yet. But there is no doubt that phone companies and mobile carriers will soon introduce such powerful handsets, as they see the mobile Internet as the next cash cow.

``Expect a mobile phone that runs a Power Point presentation next year,'' said Han Sen, vice president of LG Telecom. ``With the 3G network established, firms will market phones that can perform more functions of a personal computer.''

The talks for Internet-telecom merging is also avid in the United States. Invariably, at the center of the talk is Google.

Google, unarguably the most influential Internet company in the world, has already made a number of strategic alliances with phone companies including Korea's LG Electronics and Samsung Electronics, helping them develop phones that have a Google search as a basic function. But rumors have been circulating that the company may produce its own handsets (``Google Phone'' or ``G Phone'') like Apple did this year. Others believe that the firm is interested in buying radio spectrum from the U.S. government and launch its own mobile services.

Google indeed is taking the mobile business very seriously, according to Cerf, the Google missionary. ``We are extremely interested in mobile communication, making the Internet environment accessible through mobile (appliances) for all kinds,'' he said in a press meeting with the Korean press last month.

An extreme example of such efforts is its space projects. Google is cooperating with Jet Propulsion laboratory in developing the interplanetary Internet system in three years, and though it may sounds outlandish, it surely has its benefits, Cerf says.

``The reason we are doing it is that mobile communication has some of the same obstacles that we experience in deep space communication, such as interference and disruption of signals,'' he said. ``So the same protocol can be used in a mobile environment and space communication. The protocol is going to be used.''

Phones, however, are not likely to completely replace the PCs as the vernacular Internet terminal.

``Mobiles will become more important, but still, most people like to work in stationary positions,'' says Kim Jin-soo, head of audience at Yahoo Korea. ``Internet on mobiles will rather have the role of a complement to PCs, though the development of wireless communication technology will help the mobile grow fast.''

When TV Goes Online

While using the Internet on mobiles is deemed to have a limited chance of success, using it on TV is reckoned as a more lucrative business. After all, watching TV is the most time-consuming activity of people living in the developed world other than working, sleeping and eating. According to the Gfk NOP report, Koreans watch TV for 15.4 hours per week on average.

Connecting TV to the Net is already a blooming business. In South Korea, the two largest Internet line operators KT and Hanaro Telecom have IPTV (Internet protocol TV) services with a total subscription of 870,000. On IPTVs, users can browse various programs ranging from movies, dramas, documentaries and sports, and download them via broadband line to the set-top box to watch.

TV is the single largest source of advertisement income, and that is the reason why many technology firms are eyeing the IP TV business. On IPTV, it is possible for service providers to deliver personalized, target specified ads to each viewer or each program. For example, Hana TV is showing golf equipment advertisement while a user is waiting to download a golf lesson program.

``That is one of our core business models,'' says Shin Yoon-hye, a spokesperson for Hanaro Telecom, adding that user-specific ad is also to be launched in December. ``We already have plausible technologies for the algorithm for the individualized ads. What we need now is the audience volume big enough for the model to be profitable.''

And there is Google again at the center of the debate. It is the operator of one of the two largest Internet advertisement agencies. The company last week announced that it is expanding the operation to the TV ad field, by signing a strategic partnership with Nielson Company, a global media research company that is leading the field of measuring TV viewer ratings.

Launched in May, Google TV Ads is an online platform for buying, selling, measuring and delivering television ads. The key benefit of the system is the ability to report second-by-second set-top box data so advertisers can evaluate the reach of an ad and only pay for the actual set-top box impressions _ the same way Google deals with online advertisements.

Internet's Globalization and Personalization

Beside the technological aspect, the most daunting challenge for Internet firms is overcoming the borders and cultural barriers.

Most of the major Internet services, including Google and Yahoo, are still separately operated in mutually exclusive data storages due to the differences in language and culture of each nation. To solve the problem, firms have long been trying to develop flawless Internet translators but none has succeeded in making a reliable one between English and other major languages, especially with Chinese, Japanese and Korean. Nevertheless, many expect that the barrier will be lowered year by year as the people themselves become more open to foreign cultures.

In a pioneering attempt, Yahoo launched its Flicker photo-sharing service in Korea this year, which is shown in Korean language but shares the same database of photos with the English version. Kim says it is the first truly ``global community,'' and will be followed by many others in the future.

While the globalization of portals and other Web services will take some time to be profitable, the online shopping industry will be the direct beneficiary of the flattening of the world.

Gmarket, the largest online shopping site in Korea, said that monthly overseas shipping has increased to 36,000 in September, a 32.5-percent increase from December 2006. Also, contracts made on its English site number around 15,000 while keep increasing.

``Global free trading agreements will be a breakthrough in online trade,'' said Kim. ``The volume of cross-border online sales will soar when firms are able to freely ship merchandise to neighboring countries such as Japan, Taiwan and Hong Kong.''

Globalization of the Web means that the horizon of information will be greatly expanded. Thus, a critical mission is to find good and relevant knowledge in the ocean of information and serve it to individuals.

``Most of the Internet contents available on the Web is either time-killing material or generalized information. Web services haven't provided consumers what they really need,'' Kim said. ``Securing high-quality contents is the first step. Then the second step is to filter them properly to suit the needs of users. Lastly, we have to add value to the information.''

Naver, the largest portal site in Korea, is beginning to allow more freedom to users so they can design their own top page. Yahoo Korea is developing a more advanced system that automatically composes the front page based on a user's previous search and browsing record _ one similar to the book recommendation system of Amazon.com.

Complicated mathematical algorithms and clever computer programming can do the job to some extent, Kim says, but it should be human editors who sit atop the pyramid of the information hierarchy and weigh the value of each piece of information before serving it to users.

``Some people believe that technology alone can solve all the problems. But I think there are things computers can do better and things humans can do better,'' he said, like understanding the effects of American subprime mortgage market collapse on people living in Seoul can only be done by human experts with specialized knowledge in finance and economics.

``Future web services should be able to add value to raw information, not just merely delivering a mechanically searched result,'' he said. ``That will be the real change. That will be what makes the Internet really valuable.''

indizio@koreatimes.co.kr