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Korean community site aims for U.S. market

/ Source: The Associated Press

Acorns, cartoon alter-egos and bubble-gum kitsch may not seem like the most intimidating weapons for a cultural invasion, but those are the tools Henry Chon is brandishing.

The chief executive of Cyworld Inc. is hoping to translate the hugely popular Korean Web site into a hip destination for American teens and 20-somethings.

"Once Americans see the value of Cyworld, they'll make sure their friends and family use it," said Chon, who keeps photos of his daughter, Chloe, on his Cyworld home page. "We're here to build a meaningful, good community."

But as a U.S. version of the site launched Tuesday, critics question how an Asian company with fewer than 30 U.S. employees can compete with the likes of News Corp.'s MySpace, which has more than 100 million member profiles, and Facebook, popular with high school and college students at thousands of campuses nationwide.

A phenomenon in South Korea, where one in three has an account and nine out of 10 of residents ages 24 to 29 are members, Cyworld has a futuristic look and an unusual business model.

MySpace and other popular networking sites allow users to publish home pages that convey information about the user's real-world hobbies, favorite bands and daily routines. The goal is to put users in touch with other people — friends or strangers — who share similar interests when they're sitting at the computer.

By contrast, Cyworld is a parallel universe unto itself. It combines aspects of "simulated reality" computer games such as Electronic Arts Inc.'s SimCity with massively multiplayer online games that have thousands of players facing off simultaneously in what's known as a "persistent world."

But Cyworld isn't a game; the goal isn't to slay dragons or amass points but to socialize with "cybuddies."

The centerpiece of Cyworld is the avatar — a member's virtual alter-ego, a cartoon character who assumes the clothes, hairstyle and hobbies of the member's choosing. Avatars visit one another in forums dedicated to cooking or rock climbing. They occupy three-dimensional "minihomes," decorated with virtual art, electronics, furniture and stereo systems.

Cyworld's virtual economy centers on the dotori — Korean for "acorn" — with which members purchase furnishings for their minihomes, clothes for their avatars or get-well cards for friends. Members buy dotori with credit cards or cash at convenience stores throughout South Korea, and they spend on average $7 a year.

They can even buy music to play on their minihome's stereo system. Cyworld sells 200 million songs each year for about 50 cents each and is negotiating with music labels to sell songs on its U.S. site.

Unlike U.S. sites, Cyworld doesn't strive to enlarge a user's community of online cohorts or bring together strangers who might never meet in person.

It emphasizes relationships between relatives, neighborhood friends and co-workers — people who have already met in real life but yearn to also hang out online. Cyworld aims to follow these groups from high school and college to the career track, dating, marriage and parenthood.

In translating the site for Americans, Cyworld stripped down the text-heavy Korean model and eliminated some features for cell phones, a popular way of accessing the site in Cyworld's other markets: China, Japan and Taiwan.

But competitors question whether Americans would be as enthusiastic as people in Asia are about the site, which is owned by a subsidiary of SK Telecom Co.

Kristin Torres, a 17-year-old high school senior from Fresno, Calif., said defecting from MySpace, which she checks three or four times a day, would be tantamount to dumping her 196 MySpace friends.

"The likelihood that we'd all switch to another site — well, I don't think that would happen, so I wouldn't have the same group of friends if I went to another site," Torres said.

Of course, Americans can have profiles at multiple sites, and Cyworld's deep-pocketed backers in Seoul are hopeful that Americans will at least check it out.

About 200,000 Americans tested the site this summer.

Although Asian companies prosper in the U.S. markets for automobiles and electronics, U.S. Internet brands such as eBay Inc., Google Inc. and Inc. have few significant foreign rivals.

Yahoo Inc. — the top Internet site in Japan, India and Taiwan — completely retools its sites for each market, said Yahoo Senior Vice President Brad Garlinghouse.

"The Korean market has been very innovative and has created new paradigms — but in some ways they're unique to the Korean market and won't work here," Garlinghouse said of Cyworld.

But Cyworld, founded in 1999, isn't merely gunning to be America's favorite online hub. It wants to be no less than a global networking powerhouse, said Michael Streefland, vice president of marketing for Cyworld's U.S. operations.

"If we tried to create a Yankee-Doodle-and-NASCAR site, it would be a big mistake," Streefland said. "Our marching orders are to create a global site. The United States is so cross-cultural that if we can make it here we would have a scalable model that could be embraced in Europe and elsewhere."

Proponents say global domination may not be far-fetched.

In South Korea, nearly three out of four homes have high-speed Internet access, and Microsoft Corp. and Motorola Inc. routinely test products there before launching them here.

If Cyworld can thrive in one of the most technologically advanced nations, why not elsewhere?

"One of the most successful global brands is Samsung. They took a Korean conglomerate and built it into a huge marketing success," said Rohit Deshpande, a marketing professor at Harvard Business School. "Examples like this may be few and far between, but Cyworld could be at the start of this new wave of Asian companies that understand how to market on a global level."