Tuesday, October 12, 2010

Lesson From US Cyworld: Do Not Ignore User Community

Just the other day, I found myself in the middle of Facebook debate, whether Facebook is already at their peak or not. From the recent gargantuan growth of Facebook, it's difficult to imagine Facebook ever slowing down. But if I look back my own internet usage progression, I certainly see ebbs and flows of communication methods that I used since 1994. Starting with email, there were many popular methods of communication in the past: Gopher, BBS, IRC, Netscape browser, news group, webmail, instant messages, SMS, blog, comment, microblog, and Social Network.

I can see Facebook peaking at some point -- who knows, Facebook may already be at the peak --, and new method of communication replacing Facebook.

When my thought went this far, I began to wonder about how I moved on from one method of communication to another. Then I remembered that I already have moved on from one social network earlier. It is called Cyworld.

Cyworld was and is a hugely popular social networking site in Korea. It was launched in 1999 for South Koreans, acquired by SK Telecom, Korea’s leading provider of mobile telecommunications in 2003. It became so popular that at one point, it had one third of entire South Korean populace as its members, and even more amazingly over 90% of Korean's in their 20s.

This Cyworld boom has also hit Korean American communities by storm around late 2001. I remember all of my friends were getting on Cyworld, and in order to stay connected, I had no choice but to be on Cyworld to see photos posted by friends. With soaring popularity of digital camera Cyworld became de facto standard way of sharing photos and connecting with friends.

Then Cyworld tried to expand their service to international market. They launched their localized social networking sites in Germany, US, China, Japan and other East Asian countries during 2005 and 2006. Here in Bay area, SK Telecom set up an office in San Francisco to enter still nascent US social networking market. With Cyworld's track record and expertise, one might think that they had a good chance of making it here in US. But within a span of 2 years, rumor of shutting down the US branch all together started to spread, and Cyworld in fact folded their US operation completely in 2009. What went wrong?

US Cyworld Users Bemoaning Impending Shutdown
(I Would Too If I'm Losing All The Data!)

From multiple sources, I could see the following reasons being mentioned:

1. Not Listening to User Community

Social network's primary asset is membership and user community. But there were complaints from poor customer service to amateurish localized content with grammatic errors. Even when shutting down the sites, users were demanding that their data to be archived and made available for exporting, but these requests were not followed through by Cyworld. There are even Quora article suggesting that lack of innovation and changes have been pervasive since SK Telecom's acquisition in 2003.

2. Lack of Open Ecosystem

There wasn't any open API available to allow third-party developers to create additional values around user community. Since their retreat from US market, SK Telecom has announced their plan to adopt to OpenSocial in 2009, but it came too late to help their US expansion effort.

3. Ignoring The Niche

Cyworld may have had better success if they had started from their core niche group, Koreans and those who are interested in Korea. Although they went after Korean American community, what they failed to do was not connecting US Cyworld to Cyworld Korea. They had completely separate infrastructure, and did not even share namespace for users in US Cyworld to connect with Cyworld Korea users.

Hindsight is always twenty-twenty. Even with hindsight advantage, we won't be able to pinpoint exact reasons why US Cyworld effort failed. But it sure looks like SK Telecom has squandered a perfectly good opportunity to make Cyworld the first globally connected social network.


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