Analysis Korea Internet industry


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Analysis Korea Internet industry

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  • Good morning, folks!Today,I feel that this course just like beginning. But we are getting reach the finish line.So It´s a great pity, doesn’t we?My name is 성진The title of today presentation is “The Internet portal industry” Here is our team members..
  • Here is today agendaFirst, Internet portal structure will be delivered by meDo won, will follow, Basic condition, Policy, conductLast, Youme will talk about performance
  • I am going to start presentation from the news article related portalThe portal is not a small shop but is emerging as a giantSo, our team thought this market is quite interesting and attractive industry. That is reasonwhy the selected portalTo analyze the portal industry, we decided to adopt SCP model that is very useful to get insight from industry and companies. Let’s simply look at the internet industry trends before learning more about the portal industry70% people use internet 7~35 hours. This graph proves that daily life can’t separate from the internet.The SCP framework was derived from the neo classical analysis of industries and markets. The structure of a market (i.e. the number, size, concentration and diversity of participants) influences the conduct of the marketing activities (i.e. the reliability or timeliness of activities, pricing behavior, control or standardization of quality and Research and Development) which together determine the performance of the marketing system as a whole (i.e. technical and allocative efficiency, employment figures, price and margin stability and innovation).
  • In the 15 years since 1994, when Internet service providers first offered their service to the local market, Korea has grown into a global IT leader with a stable infrastructure and an Internet user population of over 35 million. As of 2008, Internet usage rate for the population ages 6 and over is 77.1% and the number of Internet users is estimated at 35,360K
  • The ability to quickly transmit information over long distances has become an important part of modern life. Thus,The Internet has changed the way to find informationIncreasing influence of the Internet and portal statureas a means of acquiring news and information
  • The Internet industry is largely divided into three infrastructure, support, application by KAITPortal service belong to the application service area.
  • Thetop 4 portal sites gained share at 90.6%Thus, we believe that this portal industry high concentration of market.Let’s look at more detail
  • The internet industry has been saturated for several years and oligopolized by a few enterprises. In accordance with the KoreanClick, 90% of the internet search market was shared by the two companies of Naver and Daum.And top 4 portalcompanies share over 90%. The market is in the growth stage passing from the dissemination stage. Ad revenue can be generated based on number of Unique visitor, frequency, page views and duration. Because of it has a dual Profit structure which is based on using user information for marketing revenue model, portals of sales strategy is maximize number of their site visitor Domestic portal industry is a high concentrated market (around 90%) by Top 3 portal companies (Naver, Duam, Nate).
  • In this kind of market environment Search must be one of the most influential parameter among many variables. Naver and daumimplanted the firm belief that one can hold supremacy in the market with only one, search technology.
  • In the internet field where the speed of technology development is very high.None of the ‘killer contents’ has been introduced after the DaumHanmail (1997), Daum Café (1999), Cyworld (2001), Naver Knowledge iN (2002), and Naver Blog (2003). It is hard to see more innovative services these days.
  • Securing fixed visitor is profit model for this industry with optimal service in the virtual space that provides territory to conduct business.
  • Technology is constantly changing and companies also are frequently upgrading their existing services, since most new services involve relatively low additional cost, and offering new services can attract or retain customers
  • Analysis Korea Internet industry

    1. 1. The Internet portal industry<br />Song Soo Keun, Moon Sung Jin, Lee Ki Hyun Lee Yu mi, Lee Tae Gyu, Hwang Do Won <br />
    2. 2. CONTENTS<br />2<br />3<br />4<br />5<br />1<br />INTERNET PORTAL STRUCTURE<br />BASIC CONDITION<br />POLICY<br />CONDOUCT<br />PERFORMACE<br />
    3. 3. PROLOGUE<br />3<br />
    4. 4. Internet, at a glance<br />source:<br />4<br />About 1million in a minute , news department store of a nightless<br />On only the naver’s news, more than 8,000 contents are come up in a day and 140,000 comments are attached…Rate of stay more than 100 seconds is overwhelming, <br />----<br />The portal is not a small shop but is emerging as a giant<br />69.2%<br />
    5. 5. Internet trends<br />Internet usage rate for population ages 6 and over is <br />77.1%, with 35,360K users<br />Unit: 1000 Persons<br />Internet Usage <br />Internet Users<br />5<br />
    6. 6. Portal stature<br />Increasing influence of the Internet and portal stature<br />as a means of acquiring news and information<br />The path of learn information via the Internet<br />Means of acquiring information<br />Source: National Internet Development Agency of Korea, Users of Web 2.0 Internet usage (2006.6)<br />6<br />
    7. 7. What is the Portal?<br /><ul><li>Presents information from diverse sources in a unified way
    8. 8. The gateways through which business clients enter the web to connect to desired Internet locations</li></ul>Strabase, 2005<br />7<br />
    9. 9. INTERNET PORTAL STRUCTURE<br />8<br />
    10. 10. Internet Industry Category<br />Korea Association of Information & Telecommunication (한국정보통신산업협회)<br />Portal Service<br />Source: Korea Association of Information & Telecommunication’s monthly report 2004.12<br />9<br />
    11. 11. Market Concentration<br />90.6%<br />High Concentration of market(CR4)<br />Source:<br />10<br />
    12. 12. Oligopolization<br />11<br />Search engine market share<br />source: Survey on the internet usage, 2008 by National Internet Development Agency of Korea<br />
    13. 13. Oligopolization<br />High<br /> <br />31,066,912<br />Avg.<br />Visited Day<br /><br />21,428,531<br /> <br />29,301,059<br /><br />23,311,167<br /><br />17,187,794<br /> <br />15,596,862<br /><br />16,133,266<br />Low<br />Avg. Dt. 173.95 min. Avg. FQ:9.01 days<br />Duration time<br />High<br />12<br />source: Analysis for internet usage of behavior,2008 by KoreanClick<br />
    14. 14. Product differentiation<br />DaumHanmail<br />1997<br />Daum Cafe<br />1999<br />Cyworld<br />2001<br />Naver Knowledge iN<br />2002<br />Naver Blog<br />2003<br />PandoraTv UCC<br />2004<br />13<br />
    15. 15. Product differentiation<br /><ul><li>The partial adoption of open thru setting the cast by leveraging the strengths of main page
    16. 16. Search strengthening   </li></ul>Sustainable<br />Open Cast<br /><ul><li>Renewal FrontPage
    17. 17. Separated search domain
    18. 18. News revitalization</li></ul>Enhance the competitiveness<br /><ul><li>Join open social network
    19. 19. Expand openness based on café, blog  </li></ul>Portal of SNS<br />SNS of Portal<br />Survivable<br /><ul><li>Join open social network
    20. 20. Start the social platform project
    21. 21. Provisionthe mobile Internet experience
    22. 22. Search specialization  
    23. 23. Join open social network</li></ul>14<br />source: Analysis for internet usage of behavior,2008 by KoreanClick<br />
    24. 24. M&A<br />15<br />
    25. 25. BASIC CONDITION<br />16<br />
    26. 26. Demand & Supply<br />17<br />
    27. 27. POLICES<br />18<br />
    28. 28. Regulation<br /><ul><li>Objective </li></ul> Portals as news media. The same responsibility as conventional media<br /><ul><li>Issue</li></ul> Cyber Insult, Copyright (to be revised July 23)<br /><ul><li>Comparison of each Country's regulatory status </li></ul> -Government vs Self-regulation<br /> -Intellectual Property(Copyright), Dishonor vs. child protection, racism<br />19<br />
    29. 29. CONDOUCT<br />20<br />
    30. 30. Pricing<br />Average Price Per Advertisement <br /><ul><li> Naver Advertising price↑, Daum↓ since 2008
    31. 31. Advertising price related to Market Share. </li></ul>21<br />
    32. 32. Product <br /><ul><li>Strategy </li></ul> -Paradigm Shift: Portal Site  Total Site(Provides all services necessary) <br /> -Categorized Product<br />22<br />
    33. 33. Advertising <br /><ul><li>Advertising</li></ul> -Word of Mouth<br />-Offer Free Service  Brand Awareness ↑<br />General service : New, Mail etc.<br /> Special service: Community, 지식in<br /> -Co-branding: TV & Internet <br />“Naver 검색창에 OOO를 검색”<br /> -Public Advertisement<br /> - TV Advertisement<br />23<br />
    34. 34. Legal<br /><ul><li>Monitoring</li></ul>Request for Suspension (Copy, Transfer)<br />Copyrighter<br />Internet Portal<br />Suspension and Report<br /><ul><li>Private self-regulation (Process)</li></ul>Request for Arbitration<br />Request for Suspension<br />Abetting (방조죄)<br />User<br />Government<br />Punishment<br />Fine(5~50m KRW)<br />Imprisonment(1~5Yrs)<br />Monitoring<br />24<br />
    35. 35. Direction of future<br /><ul><li> Effort for improve product development</li></ul>Naver<br />Next Targeting Market<br />Business Model No 1. Market Share<br />E-commercial<br />Search commercial<br />Real Estates<br />Securities<br />Online Game<br />Display commercial<br />Banking<br />E-Learning<br />Daum<br />Business Model<br />Next Targeting Market<br />E-commercial<br />Search commercial<br />Game with Neowiz<br />Finance(Daum direct)<br />Transaction<br />Display commercial<br />UCC service<br />Map service(open web)<br />25<br />
    36. 36. PERFORMANCE<br />26<br />
    37. 37. Change of search engine<br />27<br />
    38. 38. Change of search engine<br />Ex) Personalized search engine<br /><ul><li>Result of 김석태
    39. 39. Result of 김대현</li></ul>28<br />
    40. 40. Efficiency & Equity<br />Sales of online Ads has increased but wealth is more concentrated on Naver year by year<br />[ M/S of Naver and Daum in online Advertisement ]<br />29<br />
    41. 41. Performance(Cultural Objectives)<br />Portals make citizens well informed on public issues and events and on citizens being able to “share their stories“. <br />NAVER(News Cast)If select specific papers, you can show it on the main<br />People can be promoted citizenship via information, education, and social integration.<br />Daum(Agora)People can discuss<br />recent issues. <br />Help to be democracy by offering palace for discussing <br />30<br />
    42. 42. Performance(Diversity of Views)<br />Portals play important role as citizens are exposed to a wide range of sources and opinions through it<br />NAVER(Blog)<br />Many kinds of people express their own interest and thought very easily.<br />NAVER(OpenCast)can know others’ thought by subscribing blogs<br />31<br />
    43. 43. Problems<br />32<br />Portals make some problems as they become bigger and bigger<br /><ul><li> Contents monopolization</li></ul>E-mail<br />Search<br />Game<br /><ul><li> Manipulation</li></ul>Portal<br />=<br />Total ?<br />VS.<br />E-comm<br />Community<br /><ul><li>Culture(Opinion) misleading</li></ul>content<br />
    44. 44. Social Responsibility<br />33<br />Even though portal is a great amount of social impact and cultural sensitivity , it is impossible to regulate monopoly because of characteristic of industry , network effect.<br /> Recognize social responsibility and reinforce voluntary restraint<br />
    45. 45. Q&A<br />