1forME is Korea's Etsy

Web 2.0 | 2010/02/23 14:54 | Web 2.0 Asia

1forME is a newly launched Korean e-commerce site that sells hand-made, artists-produced goods. That's quite a mouthful, but long story short: 1forME is Etsy of Korea.

Etsy saw a gross merchandise sales of about US$ 180M last year, showing some 105% year-over-year growth. This shows that the handmade goods e-commerce is a proven business model, and for every proven business model there's always an Asia opportunity, especially if the model is culture-neutral. Well, both e-commerce and the love for handmade goods seem to be pretty universal concept, I guess.

But according to the company's heatmap, Etsy doesn't seem to have a big Asia presence. This leaves plenty of room for Asian startups to grab the opportunity. 1forME has just thrown hat in the ring, a move that's expected to be followed by many others in the region.

TAG 1forME, etsy

fanatic.fm Allows Fans To Sponsor Musicians

Web 2.0 | 2010/02/09 01:14 | Web 2.0 Asia

With the rise of internet advertising, there were lots of promises for free music, supported entirely by advertisement. (Remember Spiral Frog, anyone?) But the problem of such free, ads-supported music service was that the ads revenue was never enough to cover the licensing and other costs. Meanwhile, paid streaming services like (or Korea's Melon et al) seem to be gaining ground fast.

A new service called fanatic.fm tries to rethink ads-supported free music streaming service. Taking the same old text ads or banner ads and slapping them onto music streaming service is like trying to put a round peg into a square hole, fanatic.fm says. It's just not the best way to combine the ads and music consuming experience, they say.

Instead, fanatic.fm built a better ads system for music streaming service. It's more like a sponsorship system, where individuals or brands can "sponsor" artists so that the sponsors' brands or messages can be presented to their visitors in a more powerful way, fully blended with the right music. For example, Red Bull could strategically sponsor certain rockbands popular among X-gamers. Then people can enjoy the rockbands' songs for free, with "sponsored by Red Bull" messages. This would potentially be a better way to present Red Bull brand than simply placing textual ads next to the rock bands' music videos. Also, the sponsor doesn't have to be a corporate brand -- it could be a group of dedicated fans who would do anything that might help the artists they love, certainly including some sponsorship and donation.

Looking at the website, fanatic.fm doesn't seem to be fully launched yet, but they had already been mentioned in the MIDEM, the big music industry event held in Cannes, France, as "a company to pay attention to". fanatic.fm is the brain child of a Korean team (the same folks who did QBox), but as hinted on their website, the service is very much eyeing for the global audience.

NHN, the company behind Naver.com, recently announced 2009 financial results. The company posted annual profit of KRW 540 billion (roughly US$ 540mm) on the revenue of KRW 1.3 trillion (about US$ 1.3 billion). Both figures are all-time high, according to NHN.

NHN's profit rates, about 40% of the revenue, again proves that NHN is one giant cash generating machine. NHN is actually one of the most profitable companies in the whole Korean stock market, across all industries. The biggest contributor of this financial success is of course Naver's dominating market share in the web ads. Fueled by Naver's 60-70% search market share, Naver also sees a healthy market share of 65-70% in the nation's internet ads market.

However, apparently there are some concerns over the company's long term growth potential too. About 1/3 of NHN's profit comes from Hangame's gaming business (Hangame is the online gaming arm of NHN corporation). This is a pretty unique revenue mix; Imagine 1/3 of Google's profits are being generated by games, though clearly Google and NHN are different companies as apples and oranges are. In and of itself, generating huge profits from a gaming business would be perfectly fine; However, the problem is that much of Hangame's profit gets generated from what's called "web board games", or things like Korean poker ("Go-stop"). There are increased social concerns towards these games: As people can exchange virtual currency into real money, these games can become too addictive and potentially become borderline gamling.

Also generating investors' concerns is the under-performance of Naver's overseas operations. Naver has always been criticized as a service that achieved its greatness by monopolizing the Korean market, not by building technological unfair advantage that can also work in other countries. To overcome these concerns, Naver has been trying hard to venture into new markets and move the needles there; However, Naver's current progress in other markets can best be described as "still trying".

Naver is a great company: after all, it's the world's 7th largest internet search provider, a remarkable position given that the majority of its users are only Koreans. But without meaningful signals coming from overseas market, and less dependency of its gaming business on the poker-like games, at least Naver's stock price could stall for a while.

TAG Hangame, Naver, NHN