Web 2.0 Asia

Cyworld Japan announced a site renewal plan where it will essentially turn into a place for pro-Korean community in Japan.


This might make sense as what little number of Cyworld users in Japan are mostly K-wave followers or Korean expats anyway.

But on the other hand, this is something like, let's say, Xing France announcing it will focus on offering German job information to French people. Bad analogy, I know, but my point is Cyworld JP is essentially turning itself into a service that's quite limited to serving small, niche demographics. Which is their own statement that Cyworld JP is irrelevent to the mainstream Japanese web users.

Just another evidence that in Asian web industry, it seems so difficult (nearly impossible) to produce a "cross-cultural" hit service, whose success isn't limited only to its own country. Which is a topic that's well worth discussing in our upcoming Asia Web conference.

Cyworld "Minilife", aka Cyworld 3D, is about to start closed beta service. They are accepting up to 500,000 closed beta users (about 2% of their current user base of 22 million). Cyworld Minilife is a Second Life-like virtual 3D social network service, and is expected to launch in June this year. So far I'm not that impressed, but will deliver updates anyway.

Cyworld is launching a blog service (link in Korean) - well, technically, they're not launching a new service, but changing the name of their existing Home2 service. With their "Cyworld Blog" initiative, Cyworld might add more features down the road, but at least for the time being, the change seems pretty cosmetic.

What is Home 2? As the suffix "2" tells, Cyworld has made a longtime effort to bring forth an upgraded version of their popular yet aging (i.e. slow growth) minihompy service. As popular as minihompy service was, Cyworld knew that nothing can be popular forever and they had to come up with the new engine of growth.

So they put together a team of brilliant strategists (including Marc Canter of the US, it's widely known) and spent numerous hours on brainstorming sessions. The service that came out of that effort was Cyworld Home 2 (out in spring 2007) - which was essentially a blog service with some robust frontpage editing features (widgets, page addition, etc) and 1-chon (Cyworld's friend system).


However, Home 2 service never really clicked with the Cyworld minihompy users. Minihompy users didn't perceive the more blog-like Home 2 service as the natural next step to their minihompies and therefore didn't rush to Home 2. The fact that Home 2 was packed with all the bells and whistles also meant the service didn't have a very clear focus. When introduced to Home 2, minihompy users were like, "ok, so why am I supposed to use this?"

So Home 2 was by and large a flop, but to make matters worse, the situation isn't all that rosy for the minihompy service either - it's under a double threat of a) decreasing traffic in its domestic Korean market and b) struggle in virtually all foreign markets it entered into.

Which is why the re-naming of Home 2 to Cyworld Blog seems to have come from desperation rather than from a well-devised strategy.

Cyworld is perhaps undergoing a textbook case of innovator's dilemma: Once great, now slowly aging. Massive self-reinvention effort in the name of Home 2 didn't exactly succeed. Again, if you were Cyworld CEO, what would you do? Certainly a nice brain-teaser.

Korea Economy Newspaper (link in Korean) reports that, according to a newest research, Koreans aged from 19 to 24 are, on average, found to:

• Have 78 Cyworld buddies ("Il-chon")
  
• Have added 23 new Cyworld buddies over the last year
  
• Have 79 instant messenger buddies
  
• Be a member of 5 online clubs

How can you possibly manage the communication with 78 Cyworld buddies and 79 instant messenger buddies? Add to this 100+ phonebook entries and pouring amount of emails, and boy, is it hard to simply "keep in touch".

It's funny people work so hard, often checking emails at 2AM, to achieve their biggest dream: To become able to throw away their blackberries and get free from emails.

Benjamin Joffe of Plus Eight Star offers a great summary of leading social networks in Asia - namely, QQ, Mixi, Cyworld. Here's also a follow-up post.

A few days ago, I exchanged emails with Charlie Schick of the Lifeblog blog on the issue of "social network fatigue". Charlie wrote a post titled "Facebook fatigue" - which reminded me of similar issues that have arguably been around for longer in Asia, in the forms of "Cyworld fatigue" and "Mixi fatigue" (Mixi tsukare).

About this "social network fatigue" issue, the "why" is actually an easy part - novelty gone, etc. But the "how to solve" is the more difficult part. When asked how to keep a social network "fresh" and prevent it from becoming a fad, I couldn't come up with good answers myself:

Self-reinvention, new acquisitions and value addition (think Google), letting users constantly find new people within the network, etc. pops up to my mind, but clearly it's more complicated than that.

But doing "more" can actually lead to adverse results - Cyworld tried to add more features but that made the service increasingly difficult to use and many users didn't like it.

So here's a nice brain teaser to keep your brain running even during the weekends ;-) : If you were the CEO of Cyworld or Mixi, what would you do to overcome these fatigue issues and continously provide new values to users so they won't leave your service? Watch out - "doing more stuff", again, might not be the right answer.

Cyworld, a Korean social network service, announced the company is shutting down its European operation (Cyworld Europe GmbH). Well, honestly I'm surprised they are closing the money-losing European service only now.

Cyworld Europe started as a joint venture between Cyworld and Germany's T-Online (a subsidiary of Deutsche Telecom), but the service has been struggling in Europe - which isn't too surprising given the service being "too Korean".

But perhaps the bigger problem is that Cyworld isn't growing rapidly in its home Korean market either - in fact, Cyworld's numbers are decreasing in Korea. (Figures come from Alexa and have been quoted from photouni.tistory.com.)



Obviously there would be many reasons for this decline, but one reason could simply be "fatigue" - I'll talk about this briefly in a separate post.

This is not exactly a breaking news - the blogosphere has talked about this all the time since summer. But the other day, SK Communications had press conference and rather officially announced their plan to transform the famous Cyworld service into a 3-D service.

Digital Times (note: link in Korean) reports on the press conference that Cyworld is looking to change the current "mini room" and "mini me" features into a 3-D virtual space, something that will probably resemble Second Life. SK Communications does not hide the fact that they were inspired by Second Life when they came up with this notion of a 3-D Cyworld.

Mini room and Mini me features basically display a user's avatar in a virtual room. The virtual room can be decorated with virtual items purchased through Cyworld's item shop, where "Dotori" or acorns is the virtual currency - equivalent of Linden dollars in Second Life.

Shin Cho, the newly appointed co-CEO of SK Communications, said: "The key difference between Cyworld 3D and Second Life is that... Second Life mostly provides ready-made content, while Cyworld 3D will focus on providing user-created content." We might imagine Cyworld 3D users visiting someone else's 3D virtual room and watch the video content he or she had shot and uploaded there.

SK is planning to roll out Cyworld 3D early next year. 

Techcrunch reported the launch of Cyworld US, and judging from the comments, there seem to be far more people who think the service will never take off in the US than those who think the other way. It looks like people have been mostly bothered by the buggy site and overly cute design.

Techcrunch says Cyworld US office has 30 people and is ready to spend $10M+ but this is a bit of overestimation, at least for now -- according to an insider. But the parent company SK Communicaions indeed is a big company and that means they do have a pretty deep pocket. (SK Group is the third largest among big company groups, or chaebols, of Korea.)

My bet is also on the side that says Cyworld will not take off big time in the US. But even if the service flops, that will probably not mean Cyworld will quietly put their weapons down and retreat from the US market. In fact, Cyworld headquarter is up to a secret (well, at least supposedly so) project codenamed C2. Reportedly, about 50 brightest minds have been assigned to the project. After months of grinding effort, presumably consisting of endless think sessions and debates, the team recently published a 1,000 pages-long planning document. (C2 team writes an English blog here)

So, even if the original Cyworld doesn't get a huge success in the US, soon Cyworld will probably go at it again with the C2, which might potentially be a bigger threat to the incumbents such as Myspace. I mean, wouldn't any service worth a look, if 1,000 pages worth of effort has been put into it? It will be interesting to keep an eye on the US Cyworld, both the current one (C1) and the future one (C2).