Korea Cyworld users exodus to Facebook

With all the Facebook IPO bashing going around, I thought I’d contrast it with a graph that highlights Facebook’s impressive milestone in Korea, and note what it represents. 

So, Cyworld, Korea’s incumbent, long-running largest social network, has been been seeing massive user migration to Facebook (on PC).   

As of today, Javier Olivan announced at the Seoul Digital Forum that 1 out of every 5 Koreans are on Facebook.  That is, Facebook Korea has hit about 10 million users.  A huge feat. 

While everyone in the non-Korea market world may be used to seeing this happen with Facebook, this is actually quite a milestone and very important barometer of many changes in the entire Korea internet/mobile tech industry.  

Let’s put this in perspective:

Cyworld:

• has been around for 10 plus years (ten!), 
• owned by SK Telecom, the number one Korean mobile carrier with 52% of the market share (ie: it can leverage all of SK and its mobile payment systems), 
• pretty much invented the Virtual Good market (not kidding), and 
• has over 90% of the entire Korea population as active, unique users (not exaggerating).  

So what changed?  

Is Facebook THAT cool?  The answer is:  ”no”.   Thankfully (lol).  

Facebook’s taking over as Korea number one social network took a multitude of factors, local and worldwide, to come together to create the perfect storm — a perfect storm of opportunities —  for Facebook to be … Facebook in Korea.  To give credit where credit is due, the arrival of the iPhone in Korea was the turning point, and the subsequent “smartphone era” that arose from it was one of the important cornerstones.   

I will post more in depth about these factors –particularly related to the Korean market–in posts to come.  For now, it is easiest to just recognize that Facebook’s rise in Korea  would not have been possible, say, even 2 years ago (pre-iPhone) even with a gagillion dollar valuation.  More importantly, it is one of many indicators of very important paradigm shifts — Supply to Demand, Closed to Open (well, more open than before), Manufacturing to Knowledge-based and now towards Innovation. 

The whole startup crazy is at the heart of it (or at least a very good indicator of what’s going on).   Although the entire startup ecosystem is at its early stages of formation in Korea, like with smartphones, expect an insane rise in all aspects related to supporting that ecosystem (again, “perfect storm”).  

We are moving past a simple Renaissance period of Korea tech and content, where Korean stuff is cool and trendy (eg: Korean popular music “Kpop Korea Wave’), and into a what I see as a “pre-Cambrian Period” for startups, apps, and hopefully, innovation.

That is certainly what we are betting on from our side of it… and mark my words, the rest of Asia, Silicon Valley, and the world will either catch on quick, or get caught wondering “Where did all these Korean (apps/startups/techs) come from????!!”  

[Think World of WarCraft and Korean gamers, only in this case, App Stores are WoW, and Korean based startups/apps are gamers.  If you understood that analogy, then fear not, you are way ahead of the curve on this market compared to most in the industry.  lol]