Social Networking Sites Losing Energy

          What Cyworld does best is that it connects people all across the contry (now, all over the world) and allows people to share their personal photos, post journal, play videos and more. Since its capacity to search and pupularity among younger generation, it became Korea's number one social networking site very quickly.
          Although it's almost like a daily routine for cyworld users to check their so called "minihomepy" and post and scrap pictures, the popularity is now losing its power as people are now so used to it and have a full connection between people. This is not only Cyworld's problem, as MySpace launched its first service in Korea end of last month, it hasn't influenced many Korean users yet, having only 29,000 people had visited for the first week of its launch.
          SK Communication who owns Cyworld, reported "its revenue from the service decreased by 6 percent in the first quarter of the year, compared to the same period last year. Its sales were 19.3 billion won in the first three months of the year, down from 19.8 billion won in the previous quarter" (KoreaTimes).
          However, SK Communication stated that they will open up a new service in June which would have a 3D graphic interface allowing people to interact realistically in third-dimension world. Some experts are doubting that since few companies had already introduced such services but did not do well, Cyworld's new business plan has to be considered seriously to satisfy users' demand.
          I noticed that Cyworld recently has lowered its virtual currency called "dotori" so that people now can purchase songs and decorating items for their homepies. Affordability is an important purchase driving force in the business and lowering dotori might help SK Telecommunication. However, I really expect Cyworld to differentiate their services because these days many web-based social-networking sites offer very similar functions and services. Being the first in the market does not always guarantee the success.

Reference;
http://koreatimes.co.kr/www/news/biz/2008/05/123_23547.html

20601008 - 8th Entity