Distorted IT Environment in South Korea

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Internet itself has a philosophy as “the open”. Various of services have been launched based on this open platform and infrastructure. Starting from Altavista, Yahoo, Google, Myspace and etc to Facebook, Twitter and Pinterest have been shipped to the market. Even this moment, startups in the garage or in the valley are preparing a new revolution this point.

Similar things happened in S.Korea on the early 2000s. One of the pioneers in VoIP launched as Dialpad. “I love school.com” was first social network service based on the school that users graduated. Before the dinosaur Naver launched to the Korean market, the market itself was similar as what was happening right now in the valley.

Naver was launched in 1999. It is the fifth largest search portal web site in the world, No.1 market share in Korea. Their major services are Cafe, Q&A, blogs and newscast. It is a good thing for Korean users may enjoy their own search engine with various services. But the problem is that the Naver provides services as a strong walled garden. They try to show the most of the contents which is inside the Naver world.

If the queries of Naver occupy only 10% of Korean internet queries, the problem might be not that much serious. But the issue is that Naver has 70% of search queries inside Korea. As you want to let people know your contents to other people, the fastest way is to get into the Naver’s walled garden. In that way information oligopoly happens in the websites in Korean.

Same thing happens to the press. The fastest way to get higher web traffic for the news websites is to get more users come from the Naver’s news platform. The press supplies the articles with the sensational titles.

For example, let’s say Brad Pitt took a film. In that film, Brad Pitt’s character was killed. If the press introduces that film as an article, they supply the article as ‘Brad Pitt was killed’. Then people click the article and get fooled by the title. Koreans say that thing as hooked like a fish. Articles with sensational head title are usually shown on the front page. The online media distortion occurs from the Naver’s oligopoly.

The real problem is that Naver sells the advertisement with its oligopoly status in Korean market. Compared with Google, Google expose its Adwords with the local information and search queries inquiry based on the algorithm. But in Naver, the search result outcome has showed by the size of advertisement price. To change the order to the top, the advertiser have to pay more money to raise the search orders. In that situation, internet becomes the money game and the stadium for big players.

Last thing is that Naver copies the startup’s fascinating service if the service becomes popular.

Jisik-in(which means knowledge man in Korea) is one of the favorite service in Naver. But actually it copied the service feature of DBdic, the first Korean Wikipedia. The DBDIC is closed right now. For Naver didn’t exposed the DBDIC in their search result. Many service based on web based internet has gone away, because of this policy. If Naver exposed the 3rd parties’ website, it was hard for them to raise their revenue. For if they exposed the result with Jisik-in and 3rd Party, the share might have gone down.

Google’s motto is “Don’t be evil”. If you look at the internet eco-system of Korea, you would say “Don’t be evil, Naver”

But things have changed in mobile internet. In Korean market, mobile messenger service ‘Kakao Talk’ is one of the main service for smartphone users. Naver launched similar application called LINE.But ‘Kakao Talk’ has more market share than LINE at this point.

Google has default search engine in Android OS device. Also iPhone’s Safari does. Recently Naver raised the Google as ‘Monopoly Service Provider” to Korean Fair Trade Commission. The judgement has not came out.

I can criticize that Naver focused on the short term revenue. They copied the service of small players. They sold the contrived advertisement. While Google was selling advertisement based on logical algorithm, they didn’t do nothing. No platform like Android or Chrome.

Not only Google but Facebook and Twitter is expanding their business in Korean market. The thing is that the market is shifting from internet to mobile. How shall the story comes to an end?

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