Participation-Based Internet Is a Hit

The most successful Internet services over the last couple of years have been the Naver search engine and the Cyworld mini homepage service. Participation and sharing are the keywords to their success.

The Naver search engine is a service where a netizen posts his or her question on Internet and other netizens write the answer, and more than 1.8 million people use the service daily. SK Communication’s Cyworld is a service where people post their photos and writings and share them with friends. It has over 16 million members to date.

The two services have one thing in common: netizens are responsible for the information or contents and their homepages. Selecting correct answers in the search engine and choosing a popular homepage is also the job of netizens.

Korea is not alone in this trend.

Wikipedia, an Internet encyclopedia in which netizens write explanations for specific items, has explanations on 830,000 categories, or eight times more than the Encyclopedia Britannica (about 100,000 categories). Although less accurate than Britannica, Wikipedia is far better equipped, with newer information and more variety.

“A participatory service is like tailored clothes rather than ready-made clothes for customers. This is a change from the former supplier-centered services,” said Koo Mahn-young, head of the technical strategy team for SK Communications.

The rule of 80 to 20 is changing.

The participation in and sharing of Web 2.0 broke the rule of 80/20, which is regarded as one of the basics of marketing. That is, the top 20 percent of income earners are responsible for 80 percent of sales, and the top 20 percent of businesses dominate 80 percent of the market. This is no longer applicable.

America’s search engine, Google makes more than 70 percent of its profit from advertisements from small companies such as coffee shops or flower shops. Traditionally, these companies were neglected as they fall into the category of the bottom 80 percent.

Meanwhile, portal sites like MSN of Microsoft and AOL relied mostly on large companies’ ads, and were surpassed by Google. Likewise, Korea’s NHN was successful in using the same method as Google, and it is now ahead of Daum, the former top Internet company.

These incidents show that the trivial many have now become as important as the vital few. Korea’s online music company Bluecode plans to apply the new method. The company will let customers sell their music files online and it will only collect commissions. It explains that with more sellers and consumers, various niche markets are vitalized.

“Until now, the music industry thought that most of its profits were made from few new hits. However, we found out that consumers wish to buy music that is not on the list of popular, newly-released music,” said Yoo Jin-oh, the director of Bluecode.

A conflict between trust and the public’s wisdom-

Web 2.0 is an Internet service that pools the public’s wisdom through participation and sharing. However, there are also downsides. The information search engines and Wikepedia are easy to use but difficult to verify.

In fact, a person was found to have posted wrong information on Wikipedia with malicious intent. In addition, leaking individual information has also become a social issue in Korea.

“The Internet owes its development to centralization and control, so far. Web 2.0 will also need appropriate controls to encourage participation and sharing,” argued Yoon Seok-chan, the research and development team leader at Daum Communications.

However, Ryu Jung-hee, a professor at the KAIST Graduate School of Management said, “It is easy to write wrong information into Web 2.0, but it is also easy for individuals to rebut wrong information. At first, lessons will be learned through trial and error, but the errors will reduce in number as time goes by.”

Sang-Hoon Kim sanhkim@donga.com