Web 2.0 Asia

Disclaimer: The contents in this post may pertain to the author's personal interests.

They say "All good things come in threes" - well, the year 2008 was the living proof of that phrase for me. Firstly, Sara and I had our first baby son, Issac, who is our biggest blessing. Secondly, Open Web Asia '08, the premier web conference that I started as a personal project but has since been a great community effort of more than a dozen web professionals, is looking more and more like a hit conference with about 20 top-notch speakers. (Register away!)

And, to borrow Steve Jobs's patent line from his keynote, there's "one last thing" - our company was acquired by Google.

Who we are and why (I think) Google bought us

TNC (full name Tatter and Company), Korea's blog specialty company which I've been running as a CEO with my partner Chester (who is the original founder of the company), was acquired by Google Korea on 9/12/2008. For those who are not familiar with us, think of TNC as Korea's Automattic - a company that develops a cool blogging platform that's favorited by the nation's A-list bloggers, and also works closely with the open source community.

Despite the danger of sounding too self-important, I would say our company was a fairly good acquisition target for Google. First, we had a killer product: Our previous work, Tistory blog service (now property of Daum as we sold the service to the Korea's #2 portal), made to the top 10 Korean web destination in less than a year from launch, showing some 30,000% growth over the initial 8 months. While other blog services seem to be exploring the idea of integrating social networks with blogs only lately, our new blog service Textcube (link in Korean) had already implemented the feature much earlier. Secondly, we have great engineering talents. Many of our software engineers hail from the nation's leading comp sci programs, such as KAIST.

Significance: Google takes Korean market seriously

Some might say what's the big deal here, as Google seems to acquire companies almost daily. Well, if I may put some meaning to this deal, the notable fact here is that we are a company based out of Korea. To my knowledge, we are being one of the first major acquisitions done by Google in the entire Asia let alone Korea, if we don't count Austrailia and also exclude share-taking activities in China for licensing purposes. Of course I could be totally wrong, as Google doesn't annnounce all its acquisitions.

Speaking of Google in Asia, one piece of fact that my American friends have really hard time perceiving is that Google is an underdog in this part of the globe. Korea is the world's sixth largest market in terms of internet users, and yet Google has a market share that can only be described as "minor" in Korea.

Why? Korean web users mostly use Yahoo-like "portal" services and never really venture out. Part of the reason for that is, Korean portals are so good. But portals have built too thick of a comfort zone for Korean web users, leaving little room for startup innovations. Hence less motivation for startups, hence less diversity and more portal domination (in this age of de-portalization, that is), and so on and so forth - the cycle goes on.

What we will do

Now as a part of Google, TNC will try to better the situation. We will commit ourselves to increasing Google's market share in Korea. Of course, Google isn't entitled with God-given right to become #1 in every region it operates in, just because it's Google. It's actually more about the Korean web industry than about Google. I think the Korean web industry needs a player that can, as a balancing force, provide more options to the users and help create a more open web. Well, who can be that player? How about giving a chance to a company that sincerely strives to be "not evil" despite its sheer bigness?

Perhaps fitting with my personal vision (which is also a motivation behind the Open Web Asia conference and this very blog), we will also try to introduce Textcube to outside of Korea. Textcube was so good that it was called "better than the services in the US in many ways" by some international media like Giga Om, but we were hopelessly behind in terms of globalizing our product, with my perennial excuse that I'm too busy with the Korean market alone. Hopefully Google's global presence will be of tremendous help in globalizing Textcube and other interesting web services coming from Korea.
 
PS.

1) For the deal specifics, as many of you should know well, by confidentiality agreement I am not supposed to talk anything about the deal, so you don't have to bother asking. :)

2) I would like to take this opportunity to thank my partner, Chester Roh. He's been extremely good to work with. If I hadn't met him back in 2004, I would still be pushing papers at a cubicle nation. Of course I owe the same thanks to all the rest of the crew at TNC, and to our investor Softbank.

"Naver Japan is building a new web search service", its changed homepage now says - duh, no surprise whatsoever there, but some take it as a sign that Naver may have finally become ready to roll out its new search service in Japan. Naver has kept its website closed for some years. 


Naver search had actually launched in the Japanese market earlier (circa 2005), but the service didn't make any splashes - it even saw some backlashes, as Naver search engine's crawler ("Naverbot") was found to make too frequent attempts to index websites and the Japanese web admins didn't like that, leading to their blocking of Naverbot.

Since, Naver has been investing wholeheartedly in the new search service for the Japanese market. Along with Baidu, Naver is trying hard to crack into the lucrative Japanese market, but it remains to be seen if Naver (or Baidu) will win enough users away from the dominating Yahoo Japan or the growing Google Japan. And there are also other local players like Goo, who understand the local market much better. Unless the service delivers a significantly better performance, it will be very difficult for Naver, a service that clearly carries a Korean image, to lure users away from Yahoo Japan.

reports that Kai-Fu Lee, Google China's president, said Google aspires to become China's search market leader within five years. Lee's comments back up Eric Schmidt's audacious statement.

"Certainly, we would like to aspire to be a market leader in five years," Mr. Lee said Monday on the sidelines of the Boao Forum for Asia.

Google accounted for 26% of China's Internet-search revenue in the fourth quarter, up from 17% a year earlier, according to Beijing research firm Analysys International. Market leader Baidu.com's share of the market rose to 60% from 58%.

Many Internet users in China are more familiar with Baidu, which started earlier in the country and which attracts users in significant part by facilitating easy access to free music.

If Google China does succeed in becoming the top dog in China, it will certainly be a sweet revenge against Baidu, which practically mocked Google with its infamous "I know you don't know" commercial (ironical this is hosted on Google's own Youtube):



Going back to the quote again, Google China's market share jumped from 17% to 26% in over a year. That's pretty remarkable growth, isn't it? Especially so, contrasting those figures against Google Korea's current market share, which is 2.16% as of March 2008 (according to Korean Click, a Korean web analytics company.)

Why is Google struggling to break into the Korean market? It might be because Korea is a unique market where "monoculture" dominates, or it might be because Korean local incumbents, most notably Naver, are so good. Or it might be the combination of both.

Wizard, a Korean widget and startpage company (Korea's Netvibes?), posted April Fool's joke on its company blog. The company made a (fake) announcement that they've been acquired by Google, and that their product is being integrated with iGoogle.

The funny part is, they also put up what they claimed was "a copy of M&A contract with Google", which is titled as "Slavery Contract".

(Via Hatena) Nielsen/NetRatings Japan announced Google is now #2 in Japanese market, surpassing Rakuten, in terms of number of users. These are cross-property figures, meaning the # of Google users include Youtube users as well.

When I was in Japan, I saw quite a few Japanese people using Google search. (Google search market share in Japan is estimated around 35%). And also Youtube is very strong in Japan, partly thanks to the service's foreign basis which helps Japanese users go around the tricky Japanese IP/legal issues. Google seem to be doing fairly well in Japan, as IBM and Apple does.

In contrast, Google is not gaining much turf in the neighboring Korean market - although Korea is the world's 6th largest web market, Google has only around 1.5% market share versus local Naver's 70+%.

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