Korea’s SNS pioneer plans to regain lost glory with mobile apps, acorns


Cyworld, in many ways a Korean pioneer in social networking services, is back with a vengeance this year on the back of robust “acorn” sales and closer collaboration with up-and-coming technology.

Acorn ― “dotori” in Korean ― is the unit of virtual money that Cyworld users spend on all sorts of items for decorating and personalizing their homepage ― “minihompy” ― that keeps them happy and makes Cyworld richer.

Last year, SK Communications, the operator of the SNS site, achieved record-high sales of 242.3 billion won ($223 million). It also succeeded in turning operating profit around into the black for the first time in four years.

“There were a lot of worries, but I think we have proven that Cyworld is back for good and we will be setting new records in the social networking services industry,” said Koo Ki-hyang, a spokeswoman for SK Communications, which runs Cyworld.

Cyworld had for some time aroused concerns after its failed ventures into several overseas markets; the company eventually shuttered its business in the U.S., Germany and Japan.

The number of users also had begun to taper off even at home, declining to around 18 million at one point in 2008.

Critics believed Cyworld’s heyday, which started almost immediately after its launch in 1999, was officially over.

Today, half the Korean population is once again a Cyworld customer, according to SK Communications.

The number of Korean visitors at Cyworld surpassed that of those to Facebook and Twitter in March.

The acorns, or dotori have helped write this success story, showing that social networking services can and do have profit-making business models. 

Collaboration with savvy new technology, such as smart TVs, is another technique Cyworld has been using in order to differentiate its services.

SK Communications now has a contract with both Samsung and LG to offer its photo albums and search functions.

This means that consumers who have a smart TV can browse through their albums and place search commands on the Internet while they watch their favorite shows.

One catch is that application success depends on the popularity of smart TVs.

Samsung, the world’s top flat-screen TV maker, hopes to sell up to 10 million smart TVs this year, while first-runner up LG is targeting a 20 percent stake in the global market.

On top of that, Cyworld wants to compensate for its past defeat in the U.S. and Germany by successfully breaking into overseas markets.

SK Communications said in January that Cyworld will definitely be going global again this year, although it has yet to indicate exactly where.

So far, China and Vietnam are Cyworld’s only two overseas markets.

Cyworld definitely has a lot on its plate, but SK Communications is not worried.

“We offer a different kind of social networking service, especially in terms of privacy because there are so many ways you can protect your information,” Koo said.

Unlike Facebook, which recently did put in place privacy-protection functions, Cyworld minihompies disclose only the information the users choose to reveal and to only a selected bunch of people called “1-chon,” roughly meaning very close friends or relatives in Korean.

These functions are why celebrities and public figures go to Cyworld when they want to vent their feelings or become vocal on controversial issues, Koo said.

When disgraced songwriter Choi Hee-jin decided to vent about her much-discussed affair with a younger male singer, she chose her Cyworld “minihompy” to sob and fume.

Other public figures have chosen Cyworld to “come out of the closet,” while some celebrities such as singer BoA argued about her well-being and status as a part of the S.M. Entertainment family.

A survey by SK Communications and Embrain, a research firm showed in February that almost 70 percent of 1,500 individuals using social networking services said they used Cyworld the most, followed by Twitter with 14 percent and Facebook with 12.6 percent.

By Kim Ji-hyun (jemmie@heraldcorp.com)