Thursday, November 15, 2007

Critics Decry Naver's Domination of Korean Internet

Korea's Internet empire NHN is dominating internet at an alarming rate. Known best for its portal Naver, the company is sweeping core online concern countries like gaming, community services and advertisement armed with a near-monopoly share (70 percent) of the Internet hunt market. It have seen its gross sales turn 70-fold over the past six old age since it began concern as a start-up inch 2000. It's expected to post W900 billion (US$1=W916) in gross sales and W270 billion in nett net income this year. At one point its marketplace capitalisation even surpassed that of Korean Peninsula Telecom, whose gross sales are more than than W10 trillion.

But NHN's explosive growing have the Korean Internet industry shaking at its roots. As NHN tightens its clasp on the market, little Internet companies either go low-level to the giant or are eventually run out of business. "Small Internet start-ups are being undermined at their foundations as NHN lookouts and hires talented workers," said Ahn Chul-soo, president of the board of AhnLab.

NHN's two pillars are hunt portal Naver ( and game portal Hangame ( Naver have near unbeatable power. According to KoreanClick, an Internet marketplace research worker and consulting company, Korean Peninsula norms about 4.7 billion Internet hunts per month. Naver business relationships for 70 percentage of those, with 3.3 billion, far ahead of second-ranking Daum (16 percent) and third-ranking Empas (5 percent). This monopolistic Pb is unprecedented in the world.

What put Naver apart from other hunt engines is its exclusivity -- it doesn't let users to travel to other sites. Unlike Google, which indicates its users to all different countries of the web, Naver is designed so that users can make all they necessitate without leaving the site, offering everything from an encyclopaedia to news to a cognition database and blogs.

Naver's policy of confining users to its land site have destroyed diverseness within Korea's Internet. "The recent concern tendency is to happen a new concern thought that NHN is improbable to desire to pursue," said the president of an Internet company. But NHN reasons that its success is the consequence of superior service, not monopoly power.

"We put over 10 percentage of our gross sales into research and development every year, and seek to develop new services to fulfill users," a Naver interpreter said. "We're working closely with content developers to develop service theoretical accounts that volition benefit both us and them. It's separate of our attempts to protect the digital ecosystem.¡±

But Naver's domination of the hunt marketplace is a Delaware facto monopolistic wall that littler houses cannot overcome. The Carnival Trade Committee and Korean Peninsula Communications Committee are investigating the issue. Their consequences are expected as early as late this year.

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