Social Networking Sites Keep Their Local Flavor as They Go Global

HONG KONG Danny Kim, a resident of Hawaii, has 750 friends on MySpace. On his main page, he has accumulated more than a thousand messages from old and new friends. He has decorated his personal space with wallpaper and background music, and kept it updated with pictures, YouTube videos and diary entries.

But when a new social networking Web site - a South Korean import called Cyworld - got started in the United States last month, Kim jumped on it just as eagerly, making still more friends in the new community, writing more messages and decorating his new Internet home for hours on end.

"After Cyworld opened, I hardly touched MySpace," said Kim, a Korean-American who grew up in New Mexico. Having long known about Cyworld from his Korean friends, he became one of the first members of the U.S. version.

While companies like MySpace and Facebook have dominated the American social networking scene, several homegrown sites in Asia have been independently experiencing the same kind of success. Now, East and West are trading places.

Cyworld, a South Korean phenomenon since its inception seven years ago, is not only wooing the tech-savvy youth in the United States but also has spread out in China, Japan and Taiwan and is negotiating with potential partners elsewhere, according to Henry Chon, chief executive of the U.S. branch of Cyworld, which is owned by SK Communications in Seoul.

Kwon Chang Hyun, spokesman of SK Communications, said a German version will open by the end of the year. "We have proposals from Southeast Asia and South America, and we are discussing joint ventures there," Kwon said.

Likewise, MySpace, owned by News Corp., is making its move into Cyworld territory, in addition to its presence in Western Europe and Australia.

Chris DeWolfe, chief executive of MySpace, said the company was on the verge of announcing its entry into "two large Asian markets." Last week, Rupert Murdoch, the chairman of News Corp., told a conference in New York that his wife was in China to explore the possibility of opening a local MySpace branch there.

"Even as we broaden our demographics in the States, eventually we're going to run out of people," DeWolfe said. "The majority of large Internet companies in the United States get 30 to 40 percent of their revenues and profits from their global operations.

"There's still time for us, as we move into Asia, to become a leader in some of the major markets there."

In Japan, MySpace would have to take on Mixi, a two-and- a-half-year-old social networking site with more than five million members. Mixi had a spectacular stock market debut this month, with the company's valuation hitting nearly ¥220 billion, or $1.8 billion, on Sept. 15. Cyworld also broadens its trial Japanese version to a full-fledged offering next month.

In Taiwan, a site called Wretch stakes its fame on its list of celebrities - politicians, writers, athletes, top models and artists - who keep member profiles on the site. It has almost two million members.

Though Cyworld has fewer members than MySpace, which now claims more than 100 million profiles and is adding almost a quarter-million a day, the Korean network represents a larger share of its home base.

Cyworld now has almost 19 million members in South Korea, which means that in a nation of almost 50 million, more than one-third of all South Koreans have Cyworld profiles. The company also has more than two million members in China, according to the company, although various foreign and local competitors like MSN Space, Xanga and QQ Space are also in the fray, with no clear leader.

The biggest obstacle to growth for a newcomer like MySpace may be that these sites are fine- tuned to local cultures and sensibilities.

MySpace, for example, has often been described as a "free-for-all" in which members can easily create multiple profiles, add their own programming and post other kinds of media, like pictures, music and videos.

Mixi of Japan, however, has a much more structured approach. A person can join only if invited by current members. Personal profiles are based only on text, except for three photos (premium service allows more). Surprisingly, users do not seem to mind. In fact, most members do not post pictures of themselves, opting instead for photos of celebrities, scenery or pets.

Cyworld is yet another story. Personal profiles are dominated by the Miniroom, a 400- pixel-by-200-pixel space that users can decorate with digital furniture, wallpaper and other objects, much as they would decorate real rooms. An avatar, or a character representation referred to as Minime, is also in the room, and the user can change Minime's clothes, hair and facial expression. In fact, users pay real money to buy the various virtual objects to spice up the lives of their Minimes.

"My younger sister was the one who used it first, and I could not understand why she was going so crazy about it," said Mimi Lee, a 24-year- old from South Korea who is studying in the United States. "But once I got into it and saw all the cute things on everyone's except mine, it made me do it too."

Lee spends the equivalent of $20 to $30 a year on acorns, the Cyworld currency that costs 10 U.S. cents per "nut," she said during an online conversation.

In a market where social networking is a structured channel of self-expression and communication, and every piece of information seems to fall neatly into its given space, the freedom of MySpace may be hard for Asians to get used to.

"I have several friends abroad who use MySpace, but I don't really have a good impression of it," said a Mixi member who would reveal only his last name, Okumura.

Similarly, as Cyworld expands westward, it remains to be seen whether Americans will embrace and shell out money on Minirooms.

"Fixing up the Miniroom - it's kind of fun; it kind of reminds me of the Sims," said Kim, who is working as a professional dancer in Hawaii. In his Miniroom, a break dancer perpetually shows off his moves next to a lawn chair at the beach.

"But I definitely do think in Asian culture they're more 'cute,'" he said. "I can't picture a lot of my Western friends joining Cyworld, because it's just not really them."

While the chief executives of both MySpace and Cyworld emphasized the importance of rigorous market research and localization of their sites to succeed in new territories, they also saw value in retaining their respective philosophies.

"The great thing about MySpace is it's not particularly editorially driven - it's mainly user-expression driven," DeWolfe said. "And because of that, we don't have to make huge changes in each separate region."

About whether Americans would adopt the acorn system, Chon said: "Everybody wants to express themselves. We provide that means on Cyworld, and there are costs associated with it."

Kwon believes Cyworld is more advanced than other social-networking services, calling the two-year-old MySpace "an early version of Cyworld." The response to Cyworld in the United States so far, he said, "is very hot and we are very encouraged."

Where some might see Cyworld's requirement that real names be used as a drawback for MySpace users, who can open multiple spaces under multiple names, others like Kwon see advantages. A lack of anonymity, he said, can counteract concerns over Internet fraud and crime.

SK Communications has no immediate plans to take Cyworld public. This year, it acquired a blogging service and an online education service, and according to local regulation, Cyworld cannot go public within a year of such moves.

"After that? Perhaps we can think about it," Kwon said.

As for a sale or spin-off of Cyworld, Kwon dismissed the notion. "Why should we?" he said. Cyworld has been profitable the past three years, and its focus now is making investments and expanding overseas, he said.

The constant scramble for new members is crucial in the social networking business model.

More members means more acorns bought, more premium services subscribed to and more clicks on advertising banners splashed across every page.

Cyworld brings in as much as $300,000 a day on acorns alone, and MySpace advertising revenue is estimated at $200 million this year.

But like Kim, some people may not choose between the approaches - they might take both, using their Cyworld membership to express their sensitive side with sketch pads and Minimes and then let loose on the free-wheeling MySpace.

"See, that's the genius of Cyworld and MySpace - that you take ownership of the space that they give you," Kim said. "You take ownership of it, and you make it your own, and so it really expresses who you are."