In the early 2000s, Korea seemed to be a leading country in the internet industry. Its businesses were creative and they were taking full advantage of newly developed technologies. However, it is losing its leading position in the world since the mid-2000s. For example, Cyworld.com was one of the most successful business stories in the internet, but it is not any more. While the US launched new stars like Facebook, Myspace, Youtube, and Google, Korea failed to show its potential. Korea may have lost its competency, or it doesn’t work in the new phases of this ever-changing industry.
Many experts point out that the crisis of Korean internet industry is caused by its old-style strategies applied in the brand-new industry. The big portals wanted to take all of its profits exclusively and didn’t allow other players to grow the pie. They didn’t open the interface of their services, making them closed-architecture. Furthermore, big conglomerates acquired small ventures and made them “efficient” with their proven hierarchy structures. Also, these big portals focus on localizing their services to maximize their page view in the short term. As a result, Korea is left behind in the context of web 2.0, where the globalization is a key to success, despite its decent profitability.
Dr. Ahn Chulsoo, one of the most famous entrepreneur points out that the biggest problem with the Korean internet industry is the decline of entrepreneurship. With deepening oligopoly by the big portals, many small ventures are losing the morale. There are hundreds of companies developing widgets for Facebook in the US, and some of them would grow next stars. However, this may not be the case in Korea.
