Cyworld Case

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Cyworld Case
1. Which is most valuable for Cyworld – an active user, a user who spends a lot of money with Cyworld, or a user with lot of connections? The most valuable user for Cyworld is the active user that invests a lot of real world money into virtual products. This type of user will be the most engaged and in turn will make their connections more engaged. Think snowball effect. Cyworld will be able to gain the most from these users both from a revenue and marketing/network position.

2. How is Cyworld different from 1. Facebook 2. Big sites such as Amazon.com or Youtube? Facebook has obtained about three times as many users Cyworld in the Asia markets. Facebook’s main model for users is to share information such as text and pictures; while Cyworld is more like a virtual reality based platform. Cywrold users spend money aka acorns on virtual products for their world. Facebook generates revenue from advertisements which Cyworld doesn’t do advertisements. Cyworld is a social media service that main audience is Asian countries. Other websites such as Amazon and You Tube are not focused on social media. Amazon is a web retailer who connects users to goods not users to each other. You Tube has been able to grow in multiple countries across the world because the parameters of video content are virtually nonexistent. Amazon does use user review but no two users are connected.

3. What should be Cyworld's business model – paid items, mobile networking or advertising? Cyworld should transition into a combined business model or mobile networking and advertisements. By focusing on a more mobile market Cyworld will be able to see a positive trend in the amount of time spent in Cyworld. Each user will become more engaged therefore buying more acorns. Also, if Cyworld expanded to offering advertising space then it will be able to acquire some of the business that has been growing in other virtual markets such as Facebook.
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