Cyworld Case Study
Cyworld
Introduction
The U.S. social networking market is a huge technology sector that has been booming for many years. In 2006, a South Korean company called Cyworld decided they wanted to try to enter this industry that at the time, was dominated by MySpace and Facebook. According to the case study, “Cyworld is no small fry. It is the number one social network site in the Internet-savvy South Korea, where 90% of the population under the age of 20 and 25% of the total population are reportedly Cyworld’s registered users” (Peng, 2011, p. 147). There is no doubt that Cyworld was popular and successful in South Korea, however, for the company to break into the U.S. market they somehow needed to overcome the challenge of translating their home country success overseas. Because the U.S. and South Korea are so culturally different, this would not be an easy task. “Literally translated, “Cy” can mean “cyber,” but it is also a play on the Korean word for relationship, so “Cyworld” can also mean “relationship world.” (Peng, 2011, p.147). Cyworld started their concept in 1999, and allows for users to form on- and off-line relationships by forming buddy relationships through users homepages. In the U.S. version, this included a photo gallery, a message board, a guest book, and a personal bulletin board. Users then link their homepage to another users to form the relationship.
Social Network Competition The social network industry is an oligopoly meaning there are a few firms that dominate the market. When Cyworld was trying to enter the market, these were MySpace and Facebook. MySpace is now almost non-existent, and Facebook, Instagram, Vine, and Pinterest have all taken over. This particular market also has lots of product proliferation, which means that current firms have left little to no unmet demands for a new entrant to fulfill. This part of the technology sector has extremely loyal customers, and is full of network externalities. There are network
Introduction
The U.S. social networking market is a huge technology sector that has been booming for many years. In 2006, a South Korean company called Cyworld decided they wanted to try to enter this industry that at the time, was dominated by MySpace and Facebook. According to the case study, “Cyworld is no small fry. It is the number one social network site in the Internet-savvy South Korea, where 90% of the population under the age of 20 and 25% of the total population are reportedly Cyworld’s registered users” (Peng, 2011, p. 147). There is no doubt that Cyworld was popular and successful in South Korea, however, for the company to break into the U.S. market they somehow needed to overcome the challenge of translating their home country success overseas. Because the U.S. and South Korea are so culturally different, this would not be an easy task. “Literally translated, “Cy” can mean “cyber,” but it is also a play on the Korean word for relationship, so “Cyworld” can also mean “relationship world.” (Peng, 2011, p.147). Cyworld started their concept in 1999, and allows for users to form on- and off-line relationships by forming buddy relationships through users homepages. In the U.S. version, this included a photo gallery, a message board, a guest book, and a personal bulletin board. Users then link their homepage to another users to form the relationship.
Social Network Competition The social network industry is an oligopoly meaning there are a few firms that dominate the market. When Cyworld was trying to enter the market, these were MySpace and Facebook. MySpace is now almost non-existent, and Facebook, Instagram, Vine, and Pinterest have all taken over. This particular market also has lots of product proliferation, which means that current firms have left little to no unmet demands for a new entrant to fulfill. This part of the technology sector has extremely loyal customers, and is full of network externalities. There are network
References: Cyworld website. (2013). Retrieved from http://global.cyworld.com/ Kim, J. (2010, October 12). Lesson from us cyworld: Do not ignore user community . Retrieved from http://www.futureofsocialnetwork.com/2010/10/lesson-from-us-cyworld-do-not-ignore.html Peng, M. (2009). Global strategy, (2nded.). Mason, OH: South-Western Cengage Learning.