MySpace will be closing its Korean satellite office by end of the month, we’ve learned, though its Korean portal will continue to operate and will be maintained by staff in the company’s other Asian offices. Sources close to the company say that the layoffs will affect fewer than ten people, but that unlike MySpace’s recent shutdown of its Netherlands office where some employees were offered reassignment, the Korean employees will not be consolidated into other regional offices.
While MySpace wouldn’t comment on its usage statistics in Korea, it’s likely that the company was underwhelmed by its growth since launching a localized portal last April. Korea is a notoriously difficult market to crack, primary because it is dominated by Cyworld – a social network founded back in 1999, long before MySpace was even in beta stages. Reports have pegged Cyworld’s membership to include up to 90% of Koreans in their 20’s – a staggering figure that leaves little room for newcomers. Add that to substantial cultural differences and it’s little surprise that MySpace is struggling get a foothold in the market.
We should note that despite Cyworld’s Korean dominance, that company has had a hard time expanding its presence abroad. Cyworld’s US site, launched in 2006, has largely failed to catch on, after months of research spent trying to tailor the network to an American audience.
Outside of Korea, MySpace has generally been more successful at expanding abroad. The company reports that international revenue is up 35% year over year, with engagement up 38%. But Facebook is growing even more quickly internationally, and is now nearly twice the size of MySpace worldwide.
MySpace issued the following statement regarding its Korean office shutdown:
On Thursday 22nd January 2009, employees in our Seoul office were informed of our decision to close our Korean facility and MySpace/FIM legal entity Fox Interactive Media Korea.
Since opening MySpace in Korea we have realized many successes and gained invaluable insight into the local market. Our team created a locally relevant and unique experience for the Korean community and built awareness for the value of open platforms across the market for developers. We have also advocated cultural diversity and enabled our users to harness the power of our platform to creatively express themselves locally and globally.
We are incredibly proud of our accomplishments and of the team that built MySpace Korea.
We are laser focused on profitable growth and rapid monetization. We are very pleased with how this strategy is gaining traction around the world and we believe this decision will enable us to continue to prioritise our investments in the markets that will achieve this for the brand most rapidly.
Korean MySpacers will continue to enjoy access to MySpace at http://kr.myspace.com/
It is expected this change will take effect from 28th February 2009.
Koreans are always ahead of us.
Yep it sounds like Cyworld already has a foothold in that region. Smart move to get out.
90% market share is a foothold? Some sleuth.
Like people say, if you want to see what COULD work elsewhere online, check out what Korea is up to first and then adapt it to the local market. The Koreans (CyWorld) were ahead of us years before social networking sites like Friendster caught on here, and Korea’s Naver.com portal was one of the early adopters, if not the first to corporately launch its “collective wisdom” platform; done years before we had the web 2.0 movement here in the states and elsewhere. Check out how they were leveraging mobile phones a few years ago and we are finally getting on track home here in the U.S.
Note that Koreans have totally different and distinct cultural preference from US users. Just translating US website including facebook, myspace and google won’t bring any Korean users. Also, it is interesting that Koreans, who are notorious for copyright infringement for music, games and other softwares, have been very willing to pay for background music for their profile page on Cyworld. Cyworld took advantage of its adeptness in Korean market and created its original way to create revenue.
Have to admit we are a hard market to crack. But people who stick will learn a lot. -I’m korean.
more layoffs disquised as a shut down?
my god, i dont think we need a website to find out where korea is
I wonder if Facebook will take a hit
MySpace is dying. They are laying off people nonstop.
They clearly forgot to integrate starcraft into myspace
Another thought.. Korea has a huge population of yong people studying abroad and when they come back they’re more likely to come back with a Facebook account than a MySpace page. And while CyWorld had a huge following, their usage seems to be dropping so it’s hard to see that as a reason for their failure. Too niche and not enough money to market.
Google shows signs they’ll gain share in Korea… two signs: they bought a Korean blogging platform and have a free WiFi promotion with Starbucks locations.
everybody is ahead of us economical wise
Now that they have tried expanding and it hasn’t panned out. I think that MySpace/News Corp should think about buying social networking sites in this down turn. They can really get economies of scale and take over share from Yahoo as the portal of choice of the world…
MySpace’s closure in Korea clearly reveales that foreign players should have strong local strategy. Unlike MySpace, YouTube is perfoming very well.
So just forget Korea? It’s a too good market to get many intersting ideas creating new opportunites.