Korean Web Portals
Last year, Korea’s portal and online gaming industries narrowly beat overseas IT companies in market share through downsizing and structural reforms. However, the situation is different this year. The global IT companies’ offensive is going to be more intense, and thus the outcome is unpredictable.
Currently, the local portal industry is waging an all-out war to dominate the Korean mobile search market. The country’s portal sites such as Naver, Daum, and SK communications are trying very hard to heighten their position in the market. Nevertheless, they have been declining in importance with the advent of a mobile era.
One of the reasons for the local portal sites’ decline is Google’s growing importance in the mobile search market thanks to Android smartphones. According to market research firm Nielsen Korean Click, Google recorded 11.4% market share in November 2013, following Daum closely (13.4%). Naver maintained its market share in the range of 70%, but it has been losing ground.
On the other hand, the social networking market is already dominated by global companies. With the fast market growth of Facebook and Twitter, some of the local companies were pushed out of the market, and others are being threatened. For example, Naver’s Me Today, Daum’s yozm, and SK Communications’ C-Log announced their withdrawal. The reason lies in their failure to properly respond to a market change toward mobile search.
To address the problem, SK Communications implemented a major restructuring of the business, and separated Cyworld from the company. Currently, Naver, Daum, and SK Communications are making an effort to reverse the situation with the help of second-gen SNS such as Band, Camp, and Daybe. Nonetheless, their success is unclear.