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Facebook vs. Cyworld. No comparison. Only lessons.

You know, I think Korea Times gets a bad rap here and in other blogs.  Sure there’s a lot of crap, but it’s a bit like the local Goodwill.  You have to really dig through a lot of throw aways, but occasionally you find some gems like articles by Michael Breen or Andrei Lankov that Korea Times has bothered to publish and make known.

Sometimes I also like Lee Chang-sup’s regular editorials.  His most recent editorial discusses Cyworld’s many weaknesses compared to America’s Facebook.

In 1999, four KAIST graduates launched Cyworld; the same year that Facebook co-founder Mark Zuckerberg was a middle-school student preparing to enroll at Harvard University.

[...]

Much of… [Cyworld's] failure is strategic, cultural, linguistic and educational.

Cyworld’s global marketing was a complete failure as it segmented each market for the United States, Japan, Germany, China, and Vietnam. For Facebook, the world is a single marketplace ― something the Korean firm is belatedly adopting in its global standard platform.

[...]

Cyworld looks like a Korean, while Facebook seems like an American. Facebook has a Western way of outward-oriented, aggressive and open thinking, but Cyworld is inward-looking, and family- and group-oriented.

There is no comparison between Cyworld and Facebook.  One is worth over $50 billion and the other is worth just a tiny fraction of that.  However, the comparison is made to illustrate what Korea, Inc. lacks in assets of a more creative and intangible nature.

  • StevieBee

    What the comparison surely demonstrates is the disparity between the Korean internet and the rest of the world’s. A parochial, second-rate platform might work fine with a captive and patriotic market, but take it out of its native setting and you’ll be laughed at like the bumbling amateurs that you are. This applies not only to Cyworld but to countless other Korean sites.

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  • http://kwillets.typepad.com/kwillets/ KWillets

    I heard recently that Facebook traffic in Korea grew 8 times last year.

    Mostly it’s the closed garden vs. open application model. Facebook copied the features, such as virtual currency, which worked on Cyworld, but adopted the now-common US web model of “open” API’s and applications (they’re not entirely open, but more than others’).

    It’s a balancing act — they have to be open enough to get good application developers, but closed enough to keep them from moving their customers off the network.

  • http://vmphotography.com.au hoju_saram

    A parochial, second-rate platform might work fine with a captive and patriotic market, but take it out of its native setting and you’ll be laughed at like the bumbling amateurs that you are.

    Bumbling amateurs? Hardly. Let’s not forget that Cyworld was created long before Facebook, so these guys were well ahead of the curve. Nor is there anything particularly wrong with the platform. Transferring it to the global market was the problem.

  • http://www.xanga.com/wangkon936 WangKon936

    Korea has great Internet hardware infrastructure. One of the best in the world. However, I don’t know what Korea has done to use that infrastructure to actually build world class companies in Internet, media, software and IT. It seems that it’s best used for downloading Korean dramas very quickly and for online games. None of this has translated into meaningful economic value creation. What’s the point of having fast Internet connections of it can’t help you create high-tech companies?

    Korea has not developed Google, Youtube, Facebook, Hulu or the like. All Korean Internet related software has an odd infatuation with awkward Microsoft Active X code…

  • http://vmphotography.com.au hoju_saram

    Korea has great Internet hardware infrastructure. One of the best in the world.

    There’s a shitstorm here in Australia at the moment, because we’re getting a similar broadband network to Korea. Yet it’s going to cost us 10 times as much.

    Admittedly, most of the anti-NBN pundits are clueless about a few things. First off, the size difference and the density of population. Secondly, the fact that Korea was planning on selling all the cabling to the US, until the IT bubble burst and all the orders collapsed. So there was a hell of a lot of spare material to use for their own network. Smart – and fortunate.

    As far as using the nets poorly, I tend to agree. I mean, ActiveX is still ubiquitous. Wtf is with that?

  • StevieBee

    KWillets – Facebook doesn’t have virtual currency.

    Hoju – Are you saying then that Cyworld wasn’t laughed off the internet when they launched it in the US? It wouldn’t have taken a great deal of research to reveal that restricting a social networking site to one nation was indescribably short-sighted. Hardly the action of a world-beating developer, is it?

  • http://www.chiamattt.com chiamattt

    With regard to privacy and the manner with which individual users can tailor who see’s what, Cyworld wins. But Cyworld is a different kind of social networking site, and it’s a little sad that Korean’s (and foreigners) don’t see the difference and focus on the pro’s and con’s of each site.

    As an exportable product, Cyworld is simply not going to be popular, but as site focused on the domestic market, it’s still popular and people still use it. Calling Cyworld a failure is simply not true. For a long time, Cyworld’s ability to make money directly from its user base was the envy of the internet.

    Most internet users use a variety of platforms. People with a Facebook also may have and use Bebo, Cyworld, Tumblr, WordPress, last.fm, etc. There certainly is no one-stop site that kills all the rest.

    I’m no fan of Cyworld, but I’m no fan of Facebook either.

    Here is an interesting article about Facebook in Japan, and how it’s having a hard time there. Japan has it’s own social networking sites, and they’re popular. Is the expat community in Japan also chiming in that Mixi, and Mobage-town are failures? Probably.

    http://www.nytimes.com/2011/01/10/technology/10facebook.html?_r=1

  • http://kwillets.typepad.com/kwillets/ KWillets
  • http://vmphotography.com.au hoju_saram

    Hoju – Are you saying then that Cyworld wasn’t laughed off the internet when they launched it in the US? It wouldn’t have taken a great deal of research to reveal that restricting a social networking site to one nation was indescribably short-sighted.

    So why didn’t you figure it out? Why didn’t anyone else, except Zuckerberg?

    Hindsight is 20/20. Cyworld made a fortune for its developers while it lasted – much like Myspace did. The guys are pioneers and probably billionaires. That’s hardly laughing material in my book.

  • http://vmphotography.com.au hoju_saram

    Rather than focus on the negatives, let’s look at the positives: Cyworld developed the virtual currency model. It was the first company to generate revenue (80%, actually), from the sale of virtual goods. Facebook can still learn some things from it.

  • WeikuBoy

    While living in Korea I was encouraged to join CyWorld, as well as NateOn, but was unable to do so. Even with my colleagues’ help, I as a foreigner was not allowed into NateOn; and on CyWorld I couldn’t even get THAT far.

    It’s funny how Westerners instinctively see the internet as a tool to unite the world; whereas Koreans shut out the world — even when their stated goal is to expand around the world (albeit on a nation by nation basis). It’s the same nation-based (and as they would see it race-based thinking) that guides their series of bilateral managed (so-called “free”) trade agreements.

  • http://vmphotography.com.au hoju_saram

    Another point ot consider is that had Cyworld developed a model that was suitable for the global market at its inception, it might have failed to take off at all.

    And they were disadvantaged, considerably, by Korea’s relative isolation. Facebook was spawed at the very hub of the global social and IT spheres. People wanted to be a part of the Harvard social network – not just in Harvard, but all throughout the states. Because America, and American culture is so influential and ubiquitous, facebook was easily propogated.

    It’s like pouring ink into a spring and watching it spread. It’s almost inevitable. Trying to make ink spread from a backwater though – you’re going to have trouble getting it to go anywhere.

    I don’t Zuckerberg – or anyone for that matter – could have spawned a successful global social networking site from Seoul.

    Perhaps they should have used their (excellent) platform to launch a newly-branded US-centric site. But again, hindsight is 20/20.

  • WeikuBoy

    If my experience is an indication (and I’ve found it usually is), the numbers of Koreans joining Facebook is starting to explode. However, after the novelty wears off, few use it much; and those who do typically post and comment in Korean for their Korean friends. My guess is that CyWorld is not going to go the way of Friendster and MySpace. (Or, if it does, it won’t be for the same reasons).

  • wjk, 검은 머리 외국인

    Korean internet is overly restrictive. In America, all you need is a credit card. That really ought to be it.

    In Korea, they ask for National id.

    How will they SELL anything on-line with that approach? I tried to buy music from a Korean mp3 site. Some nostalgia stuff of the 1980s. You need a national id. It’s mind bogglingly stupid.

    I believe the national id originated when some Korean posted photos of a chop-up murder on-line. Yahoo, Korea, for example allowed foreign yahoo account holders to post whatever they want on yahoo.co.kr sites. That all changed. It’s a net loss strategy. Ak-peul still goes on. People still commit suicide. All it did was lose out on all foreign commerce.

    and very valid point on Japan’s own social networking site.

    facebook sells your information without remorse. They operate like Microsoft and Apple. You should not put anything there before thinking about it 3 times. Someday it will get you fired. I truly believe that. Plus, the news agencies seem to have a free pass to all the facebook content when someone does something wrong. I think it’s the dumbest thing ever to post yourself drunk or high on drugs on facebook. Everyone will check it. Potential employers, school admissions, etc. Every privacy guard facebook enacted was a response to public outrage. That says everything. It did connect lost friends and lost parents and children, I’ll give them that.

  • Demo

    ~ Discussing Korea’s infrastructure is much like discussing its’ having 4 seasons. A small country can easily string itself together. The choices they made regarding what to send across those strings however, is part of the problem with Korea going global. Cyworld has the same Achilles heel as the Korean internet structure in general; built on short-sighted standards that have become antiquated and so deeply rooted, it is almost impossible to turn it around in a timely manner.

    ~ While those boys may have made Cyworld in ’99, so what? What came of it? Nothing outside Korea and that is the point. The greatest inventions mean nothing sitting in a basement. There is an interesting line in the movie “The Social Network” (yes, I know it is fiction) said by Zuckerberg’s character: “…my colleagues and I are doing things that no one in this room, including and especially your clients, are intellectually or creatively capable of doing.” Pretty much sums it up.

    ~ In Korea, Cyworld needs your national ID. How many people would feel fine about giving their social security number to Facebook? Please. With Facebook, you are free to lie about who you are. The problem will be that you will lose the actual value of the site in that nobody can find a ghost. This says a lot about the whole story actually…why Facebook made it and Cyworld remains an international Johnny-come-lately. Honestly, Korea just isn’t up to the task of making an internationally successful social network. This place is more than awkward socially with all of it’s restrictions and requisites for two people to actually call each other “friend”.

    ~ Facebook didn’t generate currency because the founder didn’t want it to. For all of his flaws, that was one good thing that Zuckerberg did; he kept it about people.

  • http://adamsawry.wordpress.com Adams-awry

    Wankon said “…and for online games. None of this has translated into meaningful economic value creation.”

    I believe NCsoft, WeMade Entertainment, NHN, Neowiz Games, and Gamevil would have to disagree.

  • belair716_

    @14 wjk, 검은 머리 외국인,

    If you want still to buy some Korean music at mp3 sites, try Naver:
    http://www.naver.com – I’m not sure you won’t have any problem… but I remember having bought some music there before without using my Korean national ID (주민등록번호).

    Yeah, I am a South Korean citizen and so I have my own ID. Yet, it’s practically useless due to complicated South Korean internet systems (such as Active X). (…) *sigh*

    p.s. I sometimes wonder if English speakers can read your comments because you use Korean words such as “악플” (malicious comments) without explaining the meaning – you just insert them as if they were English terms. LOL ~

  • Anathema

    Just one note re: myspace having gone the way of the quagga; myspace is still in active use by many, many, many underground bands in the metal genre. Sure, they will have songs posted on youtube, but for band info, getting the latest tracks as they are released, it’s essentially a combination of metal-archives.com + myspace.

    Point being that myspace is not as dead as some are claiming it to be.

  • seouldout

    Hey! What happened to Second Life?!

    Me… I still have my sweet geocities site, a showcase of kickass “E-mail Me” gifs. And ASCII art.

    (o)(o)
    ).(
    ( Y )

    That one is NSFW.

    ..|.,

  • Jieun K

    ROTFL. (I’m not gonna ask what all that ASCII art signifies.)

  • YangachiBastardo

    Lots of people are agressiving seeking for Facebook shares in various venues, i’d really like to look one of these “investors” buyin a company of dubious profitability at these prices in the face so to remember how pabo looks like.

    Investing in social networks is like investing in a free-of.charge dance club where the owners are desperately scrambling to sell every inch of space to advertisers. Dance clubs tend to have a very short lifespan, Facebook will go the same way of MyWaste, Yahoo, Geocities etc.

  • yuna

    At least the danceclub has some physical square footage. Your comment reminds me of anther old onion article..
    AOL to build three million homepages for the homeless

  • yuna

    At least the danceclub has some physical square footage. Your comment reminds me of another old Onion article ..
    (double posting taking out the name of the company because the other comment stuck in moderation)

  • http://www.chiamattt.com chiamattt

    #19 you lie. Sorry, GeoCities has closed.

  • squeeze

    When facebook was first around, you needed a Harvard email address, then it expanded to other less prestigious schools until finally, any old person could get a facebook account. Because myspace was becoming “ghettoized” (there is an article around where students are interviewed and say some rough things about myspace’s clientele) the prestige insulation was vital to facebook’s spread.

    I saw (mostly over now) a similar thing happen in Korea where the first users of facebook were Koreans who had studied overseas, or had overseas friends or any sort of high-status marker. This gave it an incredible chic appeal for a while.

  • tinyflowers

    Facebook = Myspace 2.0

    Did you notice how quickly the masses abandoned myspace for the next big thing? The same will happen to facebook. It’ll end up a graveyard of sad, old, unmaintained pages gathering dust. All without having ever turned a profit.

    And to the guy who quoted the Social Network, LOL @ you.

  • seouldout

    @22: Ooops – someone forgot to tell Geocities Japan to pull the plug.

    Poor Hiroshi Kitamura, updating his defunct GeoCities homepage on 10 Feb 2011.

    (Sh1+! I missed the Rory Gallagher Tribute Festival. Pity he didn’t cover Pat Travers, it would’ve worked so well here.)

    But GeoCities will be boom boom ba-boom boom out go the lights someday soon.

    ..|.,

  • wjk, 검은 머리 외국인

    yahoo Japan is operated differently from yahoo USA. I think yahoo Japan was more profitable.

    it was in a news article, if I remember right.

  • cm

    So let me understand this. Cyworld is profitable, but Facebook isn’t? Well, if you count the fact that in business, the goal is to make money, then wouldn’t you say Cyworld is the winner here?

    Other then that, this just looks like a piss contest to me. Who cares if Cyworld or Facebook is better?

  • Darth Babaganoosh

    KWillets – Facebook doesn’t have virtual currency.

    Facebook Credits.

  • http://koreabeat.com Korea Beat

    At least Cyworld had a better name than Facebook. Also, I wonder if their failure to integrate their overseas sites with the original Korean site wasn’t due to the national ID/ActiveX requirements mentioned by previous posters. Getting around those requirements might have meant re-incorporating overseas, probably not something they wanted to do.

  • seouldout

    At least Cyworld had a better name than Facebook.

    Ah yes, snatching defeat from the jaws of victory. Hello old friend, I see you haven’t lost your appeal.

  • belair716_

    @29 Korea Beat,

    In my comment 17 above, I wasn’t talking about Cyworld – I have never used Cy either in south Korea or abroad. But you may be right about those site-developers’ intention. (I have no idea… -_-;)

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