MySpace Shuts Korean Operation… Why?
By Anna Johnson on February 10th, 2009News Corporation owned MySpace plans to shut its Korean satellite office by the end of the month. The Korean MySpace portal will continue to operate but will be maintained by staff in other News Corp owned Asian offices.
TechCrunch reports that the layoffs will affect fewer than ten people, but the Korean employees will not be consolidated into the other regional offices.
TechCrunch believes the Korean MySpace operation probably suffered from poor growth since it launched in April, 2007. Korea already has a strong local social network in the form of Cyworld – a social network formed in 1999, which apparently counts some 90 percent of twenty-something Koreans as members.
No question, going up against such a strong incumbent – especially one that understands, and is part of, the local culture – would have presented MySpace with major challenges.
And while MySpace, like Facebook, has been fairly successful in expanding across the globe, both social networks have struggled in certain markets where the cultural differences are pronounced and local social networks already dominate.
In Japan, for example, both MySpace and Facebook have found it difficult to compete with Mixi.jp. Not only is Mixi highly popular among the Japanese but it has considerable resources with which to protect its turf. Being a $1 billion-listed company and all.
Arguably, a key reason for difficulties in penetrating both the Japanese and Korean markets is attempting to impose the U.S. social network model in countries with significantly different cultural preferences, especially where such preferences are already being well catered for by local providers.
Interestingly, Cyworld has experienced similar problems in trying to expand beyond Korea. According to TechCrunch, Cyworld’s U.S. site, launched in 2006, has failed to gain traction, despite concerted efforts to tailor the network to an American audience.
So the upshot of this is: beware any form of ‘cultural imperialism’ when seeking to sell ‘local’ versions of products or services in other countries, especially when you are going up against a strong, local incumbent.
Sources: Jason Kincaid, “MySpace Struggles In Korea, Shuts Down Regional Office,” TechCrunch, February 5, 2009, Anna Johnson, “U.S. Social Networks Flop in Japan,” Kikabink News, August 6, 2008
