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NOVEMBER 13, 2006
The Korean Upstart In MySpace's Face Cyworld could be a social networking sensation in the U.S., if it learns the ropes well enough
Breaking through will be no small feat. MySpace.com (NWS ) dominates U.S. social networking, with about 123 million users. But the behemoth's appeal may be peaking, and established U.S. rivals are nipping at its heels. Cyworld, which is backed by the deep pockets of South Korea's SK Telecom Co., thinks it can carve out a lucrative spot. And it spent 13 months doing research before its August launch to bolster its prospects. "Some people might consider this a saturated market," says Henry Chon, CEO of Cyworld USA. "But we think we're a nice alternative to these other sites." Emphasis on the word "nice." If MySpace is like a hip party, where users vie for popularity and attention, Cyworld USA is a relaxed hangout that stresses existing friendships and hosts 2,650 clubs, such as "Interns Unite!" Cyworld gives social networking a twist, combining photo sharing and blogging with digital avatars. An avatar (a little cartoon character called a Mini-Me, à la Austin Powers) can be programmed to dance, play, and even sulk in a customizable online mini-room. Koreans often spend hours rearranging their avatars' moods, outfits, and rooms. Cyworld has cashed in on this addiction, selling digital accessories to users to the tune of $120 million in Korea alone last year. (Nearly one South Korean in three is a registered user.) Still, it's a mélange that may not suit every country. "A lot of this cutesy stuff doesn't cut it over here," says David Card, a senior analyst at JupiterResearch (JUPM ). CUTE AND COOL That's one reason Cyworld embarked on its pre-launch odyssey, guided by a host of consultants. Look-Look, a youth research agency, helped it learn about American teen culture. Native Instinct, a digital design firm, scrutinized the site's look and feel. Arlene Atherton, a visual linguistics consultant, analyzed cultural values to translate the site's brand. Some changes were simple. Pages had to be reorganized to read left to right. The fate of the avatars wasn't as clear. The Japanese nixed them. But after some initial skepticism, American focus groups gave them a thumbs-up. The U.S. team made the Mini-Me's older, larger, and more ethnically diverse than their Korean counterparts, which have a more cherubic look. By retaining the Mini-Me's, the site found its niche: teens who equate cute with cool. While Cyworld's core audience in Korea is twentysomething college kids, the typical U.S. user is 13 to 24, female, creative, and active in her community. Cyworld USA sees its focus on wholesomeness as its best chance for trumping MySpace's free-for-all appeal. So far, it has led to steady growth. The company is adding one new member every two to three minutes and expects to have 500,000 by February. So while a year's worth of research can't guarantee success, the company at least has the satisfaction of having done its homework.  By Elizabeth Woyke
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