Why the future is in South Korea

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dewayne Hendricks <dewayne () warpspeed com>
Date: June 10, 2006 10:32:33 AM EDT
To: Dewayne-Net Technology List <dewayne-net () warpspeed com>
Subject: [Dewayne-Net] Why the future is in South Korea
Reply-To: dewayne () warpspeed com

Why the future is in South Korea

Smart investments in broadband there have paid off in the form of a  
hyperconnected society --and now we can start reaping the benefits of  
the Korean experiment.

By Chris Taylor, Business 2.0 Magazine senior editor
June 8, 2006: 3:43 PM EDT
<http://money.cnn.com/2006/06/08/technology/business2_futureboy0608/ 
index.htm>
SAN FRANCISCO (Business 2.0 Magazine) - I, for one, welcome our South  
Korean overlords.

Ninety percent of the country has blazingly fast, 3-megabits-per- 
second broadband at home, and similarly high-speed wireless  
connections on the road. The telecom market is fiercely competitive,  
and broadband service costs the consumer less than $20 a month.

There are 20,000 PC baangs, or Internet cafes, where you can rent a  
superfast machine for $1 an hour. Online gaming has become a way of  
life, with nearly 3,000 South Korean videogame companies boasting  
combined revenues of up to $4 billion.

As a result, South Korea has become the world's best laboratory for  
broadband services - and a place to look to for answers on how the  
Internet business may evolve.

Smart bet on broadband
How did this come about? In 1995, the South Korean government made  
what must rank as one of the most shrewd and far-sighted investments  
in business history. It spent big on a nationwide high-capacity  
broadband network that any telecom operator could offer service on,  
and offered subsidies so that 45 million Koreans could buy cheap  
PC's. Cost: a mere $1.5 billion.

Fast-forward 11 years: Korea is now the most connected and Net- 
addicted country on Earth. There are a few American companies who  
have benefited from the South Korean broadband boom: Blizzard, for  
example, makes a popular online game called Starcraft which is so  
widely played in South Korea that two TV channels broadcast Starcraft  
matches between professional players.

But the most popular services are homegrown.

Cyworld, for example, is a social network owned by a subsidiary of SK  
Telecom, the country's largest wireless provider. To an American eye,  
the Cyworld service looks like a mixture of some of the hottest US  
properties: it's MySpace meets Flickr and Blogger and AIM and Second  
Life.

Users have avatars that visit and can link to each other's  
"minihompy" - a miniature homepage that's actually a 3-D room  
containing a users' blog, photos, and virtual items for sale.  
Cyworld's digital garage sales include music, ringtones, clothes for  
your avatar and furnishings for your own minihompy.

Cyworld has penetration rates that would make Rupert Murdoch, CEO of  
MySpace parent News Corp. (Research), green with envy: An astonishing  
90 percent of South Koreans in their 20s use the service. Celebrities  
and politicians set up their own minihompies, and the way to get  
ahead in twentysomething Korean society is to found a popular Cyworld  
club, or chat room.

Printing money
Most importantly, Cyworld is a license to print money. The service  
itself is free (and available on cellphones as well as online), but  
to buy all the extras - like ringtones and virtual furnishings - will  
cost you "acorns," the service's virtual currency. Cyworld sells its  
users $300,000 in acorns every single day.

[snip]

Weblog at: <http://weblog.warpspeed.com>



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