90% of the country has blazingly fast, 3-megabits-per-second broadband at home, and similarly high-speed wireless connections on the road. The telecom market is fiercely competitive,
Online gaming has become a way of life, with nearly 3,000 South Korean videogame companies boasting combined revenues of up to $4 billion.
Fast-forward 11 years: Korea is now the most connected and Net-addicted country on Earth. There are a few American companies who have benefited from the South Korean broadband boom: Blizzard, for example,
Cyworld has penetration rates that would make Rupert Murdoch, CEO of MySpace parent News Corp. (Research), green with envy: An astonishing 90 percent of South Koreans in their 20s use the service. Celebrities and politicians set up their own minihompies, and the way to get ahead in twentysomething Korean society is to found a popular Cyworld club, or chat room.
"Every social network is going to have to have a mobile component over the next year," predicts Jill Aldort, an analyst at Yankee Group. "It gives more stickiness to the service. There's going to be a social networking fatigue factor - users need novelty. And Cyworld clearly has more functionality than MySpace."
Whether or not Cyworld succeeds in the U.S., South Korea is going to continue aggressively targeting American Internet users. Its government has set a target of $1 billion a year in online game exports by 2007.
With such a proven revenue stream, Cyworld is expanding fast. It launched in China and Japan last year, and a US launch is slated for later this year.
NCSoft, the company that runs Korea's most popular multiplayer online role-playing game, Lineage, has found a string of successes in the U.S. by learning quickly what Americans love: its City of Heroes and City of Villains online games were both number one hits here. Continues...