Cyworld is threatening to swallow South Korea. Less than four years after its launch, 15 million people, or almost a third of the country's population, are members. Among those in their late teens and early twenties, 90% are hooked. It's a Web phenomenon particular to Korea but indicative of a more general blurring between the digital and physical realms.
What is Cyworld, exactly? It's an Internet service that lets people create their own home pages -- pages that can accommodate an unlimited numbers of photos, documents, and other goodies. It's similar to U.S. social networking sites such as MySpace or The Facebook, but with extra twists that make it more realistic and alluring. Home pages, for example, appear three-dimensional. Users decorate their "rooms" with digital furniture, art, TVs, even music. Since avatars stop by, the idea is to make your space as cool as possible. Instant messaging is included in the service, so you can chat with visitors. You can even enter Cyworld from a mobile phone.
Cyworld took off after it was acquired in 2003 by SK Telecom Co. (SKU
), Korea's largest wireless service provider. The idea, of course, was to generate revenues. Although the service itself is free, when people add digital couches or TVs to their home pages, they spend real money. They swap cash for a digital currency called dotori (Korean for "acorns"), which cost 10 cents each. For instance, a digital couch costs six dotori. SK Communications, the subsidiary that runs Cyworld, chalked up a profit of $12.5 million on sales of $110.4 million, nearly half by selling dotori. The company expects sales to double this year.
One feature that has helped Cyworld take off is "wave riding." It works like this: When you're reading posts on bulletin boards or looking at photo files, you can click on the name of someone who has added a remark or photo you find interesting and you'll be transported to that person's digital room. If you like the art or music, you can introduce yourself and put in a request to become a "cybuddy." If accepted, you can use your buddy's goodies -- from art to photos -- on your own page. The chain of wave-riding visits creates communities on the Net, which often develop into clubs of common interest in the real world: clubs for fishing, bike riding, and going to jazz performances, among others.
Letting users post as many photos as they want is another big draw. The growing popularity of digital cameras and camera phones means youngsters increasingly use digital images to share experiences or express themselves. An average of 6.2 million photos are uploaded to Cyworld each day, many of them directly from cell phones. "I use Cyworld as the photo archive for my family," says Kim Joon, a 31-year-old software engineer who met his wife through a Cyworld club for virtual "families" in which he first played her husband. "My 1-year-old son will have a photo log of his life in Cyworld 20 years later."
That's exactly what SK intends. The more personal information people store on the service, the stronger their loyalty. The company stores users' birthdays and then reminds their cybuddies when the date is approaching. You can send a virtual card or music, for anywhere from 50 cents to $9. "Our goal is making users' online activities entwined with their offline life," says Shin Byung Hwi, senior manager at SK Communications.
The service's popularity has meant opportunity for some members. Kim Hyoung Gon, 25, won Cyworld fame by posting recipes with photographs of dishes on his home page -- and then won a deal to write a cookbook. Kang Hee Jae, 31, quit her job and opened her own online shopping site after the collection of dolls and clothes she showed on her page drew 2.7 million visitors.
So is Cyworld a sign of things to come in other countries? Companies such as MySpace, which was recently bought by Rupert Murdoch's News Corp. (NWS
), are busily trying to create similar virtual societies in the U. S. and elsewhere. And SK execs are hoping to repeat their success in other parts of the world. They plan to launch customized versions in Japan, China, Taiwan, and the U.S. by yearend. Is your avatar ready? By Moon Ihlwan in Seoul