Without further ado, I'll jump right to the point.
1. So how dominant is Naver in Korean market?
According to a recent study, Naver has 78%+ search market share in Korea, so it's pretty dominating. Naver's Q&A service has 70 million+ entries. I recently saw a news that Wikipedia (English ver.) recently reached 2 million entries. With Naver Q&A being in much shorter form than Wikipedia, no direct match is possible here, but still it's a remarkable feat for Naver.
2. What's their strategy?
These days everyone talks about platform strategy, but another good ol' success strategy in a business is to build a "benevolent cycle". Naver did just that, with the Korean web content - they built a self-reinforcing cycle around Korean web content, all within their walled garden. It's like a giant flywheel now - with so much of momentum built up, even Naver itself seemingly can't stop its growth.
What the heck does that mean?
1) Naver successfully collected virtually all the web content written in Korean out there, and stuffed that content onto its giant DB.
How? Two ways. First, by commercial contracts with various media. A little known secret is that Naver's aggregated news service (since circa 2000) played a critical role in its ascent to a household name from a tiny internet venture. Young people, when they came home from work or school, didn't flip through newspapers as their fathers did - they turned on the computer and browsed through Naver News, which conveniently collected all the news from various news media. Even to day, the #1 time killer on the net in Korea is Cyworld and Naver News. Naver still continues the practice of signing good content prodviders. (a Yahoo strategy, maybe?)
As well as this "B2B aggregation of content", perhaps more importantly, Naver collected content from general users ("B2C aggregation of content") by providing them free, dead-easy content entry systems in Naver blog and Naver Knowledge-iN (Q&A). But often the content wasn't only produced: It was also copied.
2) Content multiplication through copies
Naver didn't actively discourage people from copying others' content. For example, Naver blog UI has a "scrap" button, which allows one-click scrap of someone else's content onto one's own blog. This led to a culture where people think copying someone else's content is a normal thing to do.
As a result of this massive copying, the already humungous Naver DB have swelled even more. But what's the use of massive DB without an effective search?
3) Search, aided by human effort
It's well known that Naver uses human resource to hand-pick good content and provide those content as search results. For example, let's say a national soccer match between Korea and Japan just ended. Naver's part timers quickly collect all the information, such as the video footage of the game, pics, blog entries, relevant newspaper articles, etc, and put them onto Naver DB. When a user enters a query "Korea-Japan soccer game", which is even often given on Naver's front page as the suggested search query to guide the users to their pages, the human-picked content comes out as the top search result, along with other machine-found results. (Both hand-picked content and machine-found content usually come from within the Naver DB; little content indexed from open web is presented.) People say "Wow, Naver does have all information of the world!", and their trust in Naver search becomes more solid.
But the problem of this human-aided search is scalability. Try any "long-tail" search queries, such as Ruby on Rails, and see what results come out on Naver. So Naver apparently focuses on the "head" not "long tail", but it pays off, as most people are interested with the head anyway. I mean, who cares about Ruby on Rails? :)
Anyways, through the cycle 1)-3), namely a "content cycle" that spans content production - content multiplication - content search and consumption, Naver successfully built a "content kingdom" - at least for most popular topics for Koreans.
All this is within Naver's closed walled garden, but when the walled garden is big enough, people are generally content with it. Think the world in the Truman show.
3. Naver Knowledge iN (the Q&A service) - what's the success factor?
One of the most well-known success cases of Naver is its Q&A service called Naver Knowledge-iN. So what's the success factor?
On Naver Q&A service, if you post a question, chances are you will get fairly good answers within a day, or even within hours/minutes. The person who asked the question provides "Knowledge Point" to the person who gave a good anser. (This point system was benchmarked by ).
But the way I see it is this. Naver Knowledge iN was a very smart act. Typical search engines, Google and Yahoo and all, tried so hard to collect all the information residing on the web pages, and analyzed the web pages to give good search results. But then, does all knowledge in the world reside on web pages? Perhaps not. Much of knowledge is still in the people's heads.
How can we take those knowledge out of people's heads? By getting the people with the knowledge to talk about it. And what's the best way to get them to talk? By asking them a question about a topic they are very familiar with. I mean, who would turn back to someone who is asking directions around a place he's familiar with?
4. Any cultural difference behind all this?
Yes and no. Korea is a highly homogenous country where there's a certain dose of what Gen Kanai of Mozilla calls "monoculture". But Naver's success is the result of smart planning and brilliant exeution, and it's not something one can simply call "a Korean thing" and forget about. Put more simply, Naver could have succeeded in other countries, too.
Orkut can be called a Brazillian thing and forgotten about (no offense to Brazil - I think Brazil has a huge potential and perhaps it's already a big market, I'm just talking about what Google is doing with Orkut), but Korea has the world's 6th largest internet user base, and is the perennial early-adopting market.
Up to some years ago, Yahoo was the number one search service even in Korea. And then it was Daum. How Naver dethroned Yahoo and Daum to become the uncontested leader in the vibrant Korean market is well worth studying.
TAG Naver
