Friday, July 6, 2007

On Naver

I read an article in the International Herald Tribune on the Korean company Naver which coincided with a discussion I had with a friend who had just read the Naver story (in Korean).

According to the article, the Naver web site accounts for over 75% of web searched in Korea. That is a huge chunk with the second ranked Daum coming in at just under 11%. Yahoo Korea is a distant third at under 5% and, get this, Google Korea's market share of web searches in Korea is under 2%.

I remember when web searches in Korean were very paltry. The reason was that there was just not that much Korean language content out there. How did Naver do it? They generated the content from its users and kept it in their proprietary database not open to other web search sites. In a country with a huge percentage of Internet penetration and use (the broadband and other Internet infrastructure is really second to none) also has a lot to do with this growth. I go anywhere in the world and the snail's pace of the Internet drives me nuts.

Nowadays, all of the web search results that Naver brought to the market is prevalent in all Korean web search sites. You have the regular “search results” and also user generated answers to queries. This makes NHN, Naver’s parent company the largest and most profitable Internet company in Korea. Last year, the company posted over US$300 million in net profit. In fact, Yahoo Answers is a direct descendant of Korean web search functionality. A good friend works at Google and they just opened up a spanking new office in Seoul. They are not apt to just sit by and will certainly do what they can to improve its paltry market share (under 2% I still can’t get over).

Not only does NHN have a lock in the Korean web search market, their on-line gaming section is no slouch. People are literally addicted to on-line games and spend hours and hours on this stuff. The economics of the on-line gaming industry in Korea is very interesting.

Take for instance a game called Kart Rider. It's a very simple game that you play with complete strangers but you can purchase upgrades to your car (e.g. slick paint jobs). The free “car” you get is not very pretty and doesn't have any of the bells and whistles of other cars. Apparently, unless you are a complete on-line game stud you won't win with this car. Thus, people buy these upgrades.

In a game called Lineage, there is a complete cyber land complete with villages and towns and feudal overlords. In order to gain experience at fighting you have to get trained (basically keep hitting targets with your sword) before you can actually kill animals and the like. In fact, there are people in China who get paid to play these games in order for Korean users to get these experience points. Crazy. In this cyber-kingdom, people engage in trade and war and everything. Talk about on-line community. Apparently, there have been murders in real life in Korea based on what happens in this cyber land. There are cable TV shows dedicated to showing games between famous gamers. There kids are so well known in Korea and are sponsored (some earning more that six figures). When you go to the mall, there are huge crowds of people watching real-time gaming contests. I'm not sure if this is Otaku-crazy but Korea must be one of the leading companies in Internet on-line gaming.

Starcraft 2.0 is about to be launched. It's only a matter of time before this stuff catches on like wildfire outside Korea.

-Pat in Seoul

2 comments:

Chulopapi said...
This comment has been removed by the author.
Chulopapi said...

Damn, I'm gonna sound like a grouch again.
I have no qualms about Korea wanting to be the cyber-king of the hill - this uber-connected nation.
I have no problems with kids dabbling at video games here and there. Say, an hour a day?
But for fuck sake, why aren't more kids reading? Why is it that I never saw kids read in Korea other than to memorize data like drones from text books. I'm talking about novels, history books or even newspaper. Instead, I see kids at PC bang until wee hours playing games and this madness about buying computers for 5-year olds. Try Sherlock Holmes in translation, instead!