KOREA: YouTube's Korean site makes little impact

The tepid response to YouTube's Korean site further shows how foreign web services struggle to compete against local Korean sites

The Korea Times
Sunday, February 3, 2008

By Cho Jin-seo

The launching of Korean-language service version of YouTube, the globally popular video-sharing service, has had little effect, statistics from a research firm showed Monday.

The lukewarm response to YouTube Korea is the most recent example of how imported Web services are struggling to compete against locally grown sites. It also shadows the image of Google, which owns YouTube, in Korea, as the firm has received government subsidies by promising to make contributions to the Korea IT industry.

According to Rankey.com, an Internet traffic monitoring firm, the number of daily visitors to YouTube English and Youtube Korean sites soared to 382,000 on Jan. 23, the day the Korean version opened more than three times its average. But the number began to ebb away from the next day, and fell back to the normal level of 115,000 on Jan. 31.

Even in the early stage, such a performance looks dismal for YouTube. Pandora TV, the No. 1 local video-sharing site, had an average of 997,000 daily visitors in the same period. Others such as Mncast, Mgoon, Gom TV and Afreeca had two to five times more visitors than YouTube.

YouTube's Korean representative said the game has just started.

"Our own analysis shows a big increase in the traffic, and we have favorable responses from our partner sites as well," a PR official was quoted as saying by Yonhap. "Koreans are not well aware of us yet, so we are planning to launch promotion campaigns in March."

Google has been cautious in expanding in Korea knowing that many other globally popular Web services of YouTube's caliber have failed to dominate the Korean market. But this year, the company has become more aggressive. It held a grand launching ceremony for its YouTube Korean site on Jan. 23 at Shilla Hotel, one of the most expensive hotels in central Seoul. A week later, it held another press conference for a slightly revised version of the Google Korean search engine at its office in southern Seoul.

The two press events drew unenthusiastic responses from the media and the public. Remembering that Google has been subsidized by the Korean government, newspapers and online news services published rather skeptical stories on the moves.

In 2006, the Ministry of Commerce, Industry and Energy and Google signed a contract that Google would receive 1.25 billion won over the next two years for operating an R&D center in Korea. The ministry also pledged to pay 80 percent of Google's Korean employees wages to draw more financial and technological investment from Google, according to media reports.

Local Internet firms have continuously criticized the government for unfairly supporting the U.S. company, while not paying a penny toward helping Korean firms expand in the United States or elsewhere. They also say that the government subsidy is only helping Google pay expensive office rent.

The company's some 100 employees use the whole 22nd floor of the Gangnam Finance Tower, one of the most expensive office buildings in Korea, which is believed to cost them around 1.3 billion won every year. The building used to host several Korean Internet firms such as NHN and CJ Internet, but they left years ago for less expensive office space.