Web 2.0 Asia

Korea's leading internet portal Naver is undertaking a great non-profit project, in partnership with local Starbucks.

The program is called Knowledge iN's Bookshelf (link in Korean). "Knowledge iN", which also happens to be the name for the hugely successful Q&A service, means "guru" in Korean. ("지식인", "知識人")

Under this program, Naver asks gurus from various fields to pick up the best books off their own personal bookshelves. We all know great people are great readers, and peeking into their favorite book collections would certainly be intellectually intriguing.

Then, those books hand-picked by the gurus appear physically in select Starbucks coffeeshops for free reading. (See the top left picture.) The Knowledge iN's Bookshelf website provides links to let the users know which Starbucks coffeeshops have those books.

Despite its huge success and obvious contribution to the Korean web industry in many ways, Naver has been called "an evil company" on, well, more than one occasion - probably due to the company's alledged closedness. But a project like this is something even Amazon isn't known to be doing (Come on, you guys even have Starbucks HQ in town!) and can help enhance Naver's corporate image. Below is a screen shot of Knowledge iN's Bookshelf - these are the books hand-picked by Chan-Wook Park, a prominent Korean movie director. (Seen the Oldboy?)

Over the past couple of weeks, online Q&A services in Asia made some announcements, suggesting Q&A services are pretty active in Asia.

Tangos writes that Qihoo.com of China is set to focus more on the Q&A service (China already has a prominent Q&A service in Baidu Zhidao); Japan's top Q&A service, OKWave, announced they will start contextual ads ("content-matching ads") alongside their Q&A content.

It's to be seen if Qihoo and OKWave will generate huge ad revenue, as seems to be the case with Naver Q&A service ("Knowledge iN") and Baidu Zhidao.

Naver Knowledge iN

Here are some recent news on NHN, the 800-lb giant Korean company behind the Naver portal.

A new Japan office

(Via NmindPlus blog) NHN Japan recently moved into a new office - obviously a super hip/cool place. Here are some pics. (Note the Tatami conference room - something you won't see in the Googleplex).


There's been many talks that NHN currently regards Japan as the "next holy grail" and the company will launch its ever-famous Knowledge iN Q&A service in Japan soon. (It's no secret that Naver's Q&A service was copied by and ). Of course, the whole purpose of the Q&A service is to get users produce highly relevant content for search queries, by introducing the concept of question and answer. Which means it's likely that the Japanese market will soon see an improved Naver search service, tied closely with the Q&A service. Watch out, Yahoo Japan.

... Meanwhile, domination in the Korean market continues...

(Via Read&Lead blog) While Daum and other players seem to have gained some turf in terms of search page traffic (i.e. the # of visitors to each portal's search page):

(Sorry the graph is in Korean, but the top, green one is Naver)


... But in terms of search page views and visit duration (staying time), Naver still dominates other portals.


So this roughly means that when people use Naver search, they tend to stay longer and visit more pages than when they were on other portal's search sites. This might suggest that Naver is providing better search results on a given query.

... But not everyone is welcome

The phrase "Not in another hundred years" apparently isn't only being used by girls who dump guys - Naver recently banned someone who posted commercial content 20 times in a row on Naver's Q&A service from using the service for 100 years.

A user, who sells health supplements online, uploaded content of commercial nature that is guised as an "answer" for the Naver Knowledge iN Q&A service. Noticing this for 13 times, Naver prohibited this user from logging in Naver for a week. After a week's probation, the user started posting commercial content again - hence the ban for 100 years.

It's quite important for Naver to make sure all commercial content gets published only through their advertising program. Naver's search result page, meanwhile, is being increasingly criticized for having too many ads.

(Via Chosun Ilbo) One of the current trends of the web is what's called "de-portalization", with widgets and other technologies enabling "edge" activities. But recently, Korean web is becoming more "portalized", meaning internet services are fast becoming commoditized with very clear top 3 players and few breakthrough new services aiming to upend the incumbents.

Mr Yoo, the CEO of Korean Click (a leading web stats company in Korea), recently gave a presentation about this trend. Mr Yoo said that the emergence of game-changing new web services have more or less ceased over the last three years. After Daum email (1997), Daum cafe (a web BBS) (1999), Cyworld (2001), Naver Knowledge iN (Q&A service) (2002), Naver Blog (2003), there have not been other "smash-hit" services with over 50% reach.

So this means that three years ago most Koreans used Daum cafe, Cyworld, Naver Knowledge iN, etc. ; Today most Koreans still use Daum cafe, Cyworld, Naver Knowledge iN, etc.

So which service will be the rainmaker to end this 3-year drought of massive web innovation in Korea? Naver-ization leads to monoculture, which isn't necessarily good. Whichever service the rainmaker might be, I'm sure it will rise on the fertile ground of entrepreneurship.

(Via inews24) Yahoo's president Susan Decker visited Korea yesterday, in time for Yahoo Korea's 10-year anniversary.

Unlike in Japan, where Yahoo is maintaining a dominant market position, Yahoo Korea is trailing local leaders such as Naver, Daum, and Nate+Cyworld. (As a side note, it would perhaps be more appropriate to call Yahoo Japan a Softbank-owned local entity rather than a subsidiary of the Sunnyvale company.)

Susan said Yahoo is regarding Korean market very importantly and some of Yahoo's services came from best-practice Korean services. Most notable is Yahoo! Answers which Yahoo openly admits it had benchmarked Naver Knowledge iN Q&A service.

So what's the strategy to win back Korean users from Naver? According to Susan, the key strategies will be personalization, open API, and more efficient search ads. Yahoo claims Overture still controls 80%+ online ads network market in Korea, and the new acqusitions such as Right Media will also help strengthen Yahoo's position in Korean online ads market.

I get this question so frequnetly that I consider replacing my personal profile on this blog with the answers for it: Why is Korea so dominated by Naver? Lucas, a terrific guy who recently joined SEOmoz.org and pays regular visits to this humble blog, is the latest person to ask the question.

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.

I agree with the recent article "" (via ): Google Korea may not exactly be a flop, but Google is not gaining ground and thereby living up to its global brand here in Korea. It's an open secret.

As the article suggests, Naver Knowledge iN (as well as other Naver Search components) rocks. I use it all the time, including last night when I was trying to figure out the part of the movie "M:I 3" that was unclear to me.

The movie premiered only last night, yet all the answers to any possible unclear plots of the movie were already there at Knowledge iN. You get the picture, right?

I think the success of Naver search has been largely helped by the fact that Korea is a very homogeneous society where people often have very common and shared interests. I mean, every society has its memes and zeitgeist, but I think Korea is a little more special. 48+ million people packed in a small country that's equipped with dead efficient broadband and mobile networks. That's an interesting (and even a bit dangerous) combination.

This means, chances are Naver knows what you want to ask it about. For instance, if Park Ji-Sung (the footballer of Mancester United) scored a goal, then when you type "P" in Naver search, Park Ji-Sung's name comes to the top of automatically suggested keywords list.

People criticize Naver doesn't depend on superb technology as much as it does on human intervention and therefore the service is not highly scalable and can only be thriving in some small, homogenous societies like Korea.

But anyway, when it comes to the Korean market, Naver is here to stay and rule. This leads to an interesting question: Google Korea's next move. Back off? or