Cyworld, the massive Korean based virtual world, is shutting down its U.S. site, which draws all of 112,000 monthly visitors according to Comscore. And while the shutdown is sort of sad, the message they sent to users more than makes up for it. The translation is bad. Not Matrix DVD cover in Korean bad, but bad.

Yes, I know Americans and others butcher other languages in reverse all the time. But that doesn’t mean I can’t laugh a little at this, too.

CyWorld first launched in the U.S. in 2006, and we estimate that they are the twelfth most valuable social network in the world overall. Email is below. Thanks for the tip, David.

Subject: Cyworld shuts down US cyworld service

Thank you to all members with Cyworld.

Due to Cyworld shuts down US service, US Cyworld will no longer be able to service.
We sincerely apologize for shutting down the service with unavoidable reason.
Before US cyworld close the service, you will continue to access to US cyworld contents but not
purchase items. Also, you will not use your acorns.
If you have unused acorns, you will be given a full refund for paid acorns only.

Refunds and data backup service is in progress, using the acorn will no longer be able to purchase for miniroom items, skins, etc.

@ Schedule for closing US Cyworld service
Due to Data Back-up and closing service issues, the service will be unavailable.

* Shop service will be unavailable since Nov 03, 2009
o Club service, Profile photo/data upload serivce will be unavailable since Nov 23, 2009

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We’ve now remodeled social network valuations based on current user numbers and Facebook’s most recent $10 billion valuation. The results are dramatically different.

Based on the original year-old model, if Facebook was worth $15 billion (their then-current valuation), MySpace, with far more U.S. users, was worth nearly $20 billion:

Our model takes Comscore data for available countries and regions. We’ve graphed each of 26 well known social networks with the data we have been able to collect. We’ve then calculated the average advertising spend (estimated by PriceWaterhouseCoopers in a recent report) for each person online in each of those countries. For example, in the U.S., the total 2008 estimated Internet advertising spend is $25.2 billion. We’ve divided that by the number of people online in the U.S. according to Comscore (191 million), to get an average Internet spend per person of $132. View the raw data and calculations here.

The U.S., by the way, is only the 4th most valuable market per Internet user, trailing The UK ($213), Australia ($148) and Denmark ($144).

We’ve then multiplied the average Internet spend per user in each market with the number of unique users each social network has in that market, essentially creating a “weighted average” based on the advertising dollars chasing users. If a social network has more users in the U.S., Japan, the UK, Germany, Australia, and other bigger advertising networks, they will have a higher weighted average valuation.

We believe this model is an effective way to rank various competing social networks. It bumps down networks like Orkut and Friendster who have tens of millions of users in markets with very little advertising spend, and bumps up networks with lots of users in higher value markets.

Based on this model, MySpace is by far the most valuable social network. Second place Facebook has just 75% of the value of MySpace (even though it now has more users), followed by Bebo (26% of MySpace value), Hi5 and Amebio. LinkedIn comes in at no. 11, at 6% of MySpace’s value.

The new model takes into account the dramatic rise of Facebook usage over the last year, the massive recent decline in MySpace usage, and less dramatic changes in the other social networks. We’ve also modeled out the various valuations with the old Bebo ($850 million) and LinkedIn ($1 billion) valuations as pivot points. We’ve also added Twitter to the list just for kicks.

The bottom line: If Facebook is worth $10 billion today, MySpace is worth just $6.5 billion. Bebo is worth $1.8 billion, Twitter is worth $1.7 billion and LinkedIn is worth $0.8 billion. Facebook also accounts for 37% of all social networking value points in our model. Another way of saying this: If Facebook is worth $10 billion, the value of the entire social networking industry is $27.1 billion.

Lots of charts and graphs below. The full model is here if you want to look at all the data (I recommend zooming unless you have super vision). Thanks to TechCrunch intern Dan Romero for running the new model.

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Virtual hangouts are where people can engage each other using imaginary characters in imaginary environments. They have been around and popular in Europe and Asia for years. However, they appear to be gaining traction in the United States as of late. Some commentators even believe that the type of experience provided by these destinations could very well become integral to the forthcoming Web 3.0 era.

The newly released MultiVerse platform, which is designed for the creation of online 3D worlds, certainly anticipates a future in which developers demand the tools necessary to build niche virtual communities because such communities have gone mainstream.

Currently, virtual hangouts differentiate themselves by targeting particular audiences and providing certain types of immersive experiences.

Destinations such as Club Penguin and Barbie Girls cater to children and pre-teenagers with their simple user interfaces, basic games, and cartoon graphics. Other immersive worlds such as Second Life and Habbo Hotel shoot for a broader audience by providing more advanced chat capabilities, more realistic simulations of reality, and tools to design objects and surroundings. Then there is Red Light Center (NSFW), which targets mature adults to give them an altogether more explicit breed of entertainment.

The worlds meant for children are designed with a concern for the safety and security of their users. Webkinz, for example, only lets users chat with a preselected assortment of phrases so no one can say anything inappropriate or share personal information. The services meant for general audiences lack such restrictions and theoretically can be enjoyed by all types of people, although this freedom often translates into behavior that would be utterly inappropriate for children. Second Life, for example, does not explicitly promote adult behavior but has become notorious for it nonetheless. Embracing the more voluptuous side of human behavior, services like Red Light Center are professedly all adult, all the time and encourage users to participate in explicit behavior.

Virtual hangouts range not only in the audiences they target but also in the level of immersion they provide. Some, such as Second Life and Active Worlds, put you in 3D-rendered environments with first person points of view in an attempt to approximate virtual reality. Others, such as Gaia (“the world’s fastest growing online world hangout for teens”) and Barbie Girls, use sprites (two-dimensional pre-rendered figures) to provide a bird’s-eye view of characters moving around in largely static settings. Even further down the immersion scale, the “worlds” of certain services such as Cyworld and Neopets are produced simply using HTML images and Flash animations.

Hangouts intended for younger audiences are generally less immersive than those meant for more mature audiences. Perhaps the only reason for this lies in a child’s inability to navigate more complex simulated worlds. However, children and pre-teenagers may also get something entirely different out of virtual hangouts than adults. While adults are presumably drawn to these services because they provide the opportunity for escapism, younger audiences may treat these products as interactive cartoons and toys. Thus, while all of these services provide a similar opportunity to hang out virtually, they may possess fundamentally distinct appeals for different demographics. The variety in immersion levels will probably continue to reflect these differences.

The chart in this post provides a basic comparison of these services to convey the range of virtual hangouts that currently exists. It should be noted that we tried to draw a distinction between online worlds where people hang out and worlds where people play role playing games, as is the case with World of Warcraft and Entropia Universe.

The following services are included in the chart:

• Active Worlds
• Barbie Girls
• Club Penguin
• Cyworld
• Dubit
• Faketown
• Gaia
• Habbo Hotel
• IMVU
• Kaneva
• Millsberry
• Mokitown
• Neopets
• Red Light Center (NSFW)
• Second Life
• There
• Webkinz
• Zwinktopia

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The new US site is experiencing some technical problems on its first day, account creation is a little messy but you can go in and look around the site.

According to a report by Katie Fehrenbacher, CyWorld parent company SK Communications has set up a 30 person office in San Francisco, spent around $10 million to the US version and pledges to spend whatever it takes to be succesful in the new market. Still to come are a mobile play and music sales through CyWorld. The company already has localized versions in Japan, China and Taiwan. Localization for most of the rest of the world is in the works.

Up to 90% of South Koreans under the age of 20 are reported to be registered on CyWorld, a market share even MySpace must be envious of. Whether CyWorld can translate its success in one country elsewhere is a great test case concerning the challenges of localization in the social networking space.

I’m going to go out on a limb here and guess that the vast majority of US users will prefer the wide open space and clumsy code of MySpace to the minihompies, acorns and silly cartoon avatars of CyWorld. I suppose the employment screening perils of MySpace could be averted if you were able to say “that wasn’t me – that was my MiniMe!” Whatever.

If MySpace and Facebook are struggling to define themselves as places that include young adults with money, how hard is that going to be for CyWorld? Perhaps in other parts of the world very young children make frequent micro-payment online purchases online (see Finland’s Habbo Hotel – $30m in twenty cent transactions), but I don’t think that’s common practice in the US. Perhaps they are targetting the demographic of adults who love HelloKitty, perhaps I’m wrong and will be surprised.

One notable limitation of the system is that US users are not able to make friends with users in other countries and data can’t be ported from one country’s CyWorld to another. But I guess it’s all about the acorns, anyway.