KoreaCrunch

People said Korea is a grave of famous global companies such as Wal-mart, Nokia Carrefour, Nestlé,and Google. MySpace also quits their business in here.

Youtube is not exception. It was opened in one year ago with promotion of Steve Chen, co-founder of Youtube, visited Korea. During one year, Youtube seems nice growth but, it still struggles amang Korean big players.

In last year, online video market was dramatically changed in Korea. Video startups such as Pandora.tv and Mncast.com have been pressed by high cost to manage servers and network traffic because of high quality video upload and download over 700kpbs.

At last, Mncast.com shut down their service in December and doesn’t reopen it, so is getting claims by users. It seems to be caused by debt for CDN(Content delivery network) company. Daum tvPot(30%) is fast-growing in this market, and Pandora.tv(18%) slows down. Cyworld video(12%) also slow changed to get market share. Naver video(9%) is not invested in this area despite of many visiting members. Youytube Korea(9%) was not changed from Jan to Dec.

Daum has 30% market share and it has 11 million playback per day and 200 million page view per month. You can guess how big is online video market. The problem is how to deduce cost and make a money in Korean tough market in ultra-high broadband environment.

NHN announced earning surprise of 2008 year with increasing over 30% sales and income compared with 2007. According to corporate earning presentation, the total sales in 2008 reached 8.6 hundred million US dollars and net income did 2.6 hundred million US dollars. It was just discounted because of weaken Korean won.

(Thousand Korean WON)

NHN has two business properties of Naver.com (search portal) 70% including search and display advertisement and Hangame.com (online game) 30% based on user-charged game service.

Myspace Korean version officially will be closed in Feb. 18th. According to news media, Korean branch was managed by Fox Interactive, but it will be shut down in Korea too.

Myspace was launched Korean version in very enthusiastically in Apr. 15th, 2008. Chris DeWolfe, Myspace CEO who was visiting Korea, delivered a keynote at several places. Also, Miss. Sung Lee was assigned to VP in Asia Pacific region. She was one of Daum’s founding members, so it was very expected aggressive approach against Cyworld, Korean #1 SNS service.

But, it took just one year to decide to close Korean version. By notice of Myspace, user’s contents will be maintained in English version. Myspace has still local versions of Japan, Indian, Australia and New Zealand in Asia-Pacific region. It seems only for Korean version to be closed. Tough market in Korea.

On the other hand, Facebook just opened Korean localization group and translation was almost completed with over 1,500 members. It slowly grows up!

Update. Techcrunch reports MySpace Struggles In Korea, Shuts Down Regional Office.

Daum, the #2 largest Internet portal in Korea gains 20% share in Korean search market. As you know, Korea is one of Google failed countries against local search engine. Google is still behind others in Russia, the Czech Republic, Korea, China and Japan. Yandex, Seznam, Naver, Baidu and Yahoo! Japan are all the leaders in each of these nations respectively.

Naver has still dominated 75% market share and reached 10 times profit compared with Daum’s. According to Comscore’s report, NHN was also #5 search engine in the world.

But, Daum caught up Naver slowly and maintained 20% share from August, 2008. On the contrary, Yahoo! Korea and Empas.com(a branch of Cyworld) was slowly down. Google Korea still struggled in Korean market with below 1.5% share.

Overtaking market share by #2 player is very hard in online business in general. But, Daum had some benefit from Korean political situation by focusing on online debate service named “Agora”. Internet users enjoyed political debates rather than in Naver.com for issues such as US beef and Minerva scandal.

In addtion, Daum’s efforts to lead user-participation has been aggressive rather than Naver’s. It acquired a Korean encyclopedia and its license and donated it to Wikipedia. Some users and Daum have been proceeding with Knowledge Sharing Project since then.