Cyworld (싸이월드) is a South Korean social network service operated by SK Communications (SK 커뮤니케이션즈), a subsidiary of SK Telecom (SK 텔레콤). Cyworld was launched in 1999, which was purchased by SK Communications in 2003 and became one of the first companies to profit from the sale of virtual goods.
Members cultivate relationships by forming Ilchon (일촌 or 一寸) or “friendships” with each other through their mini-homepages. Avatars and “mini-rooms”, small, decorate-able, apartment-like spaces in an isometric projection, also feature. All of this can make for a Sims-like experience. The “Cy” in Cyworld could mean “cyber” but is also a pun on the Korean word for relationship (사이 “between”).
Revenue is generated through the sale of dotori (도토리), or “acorns”, which can then be used to purchase virtual goods, such as background music, pixilated furniture and virtual appliances. In 2006, 80% of Cyworld’s Korean income was generated from the sale of virtual goods.
Cyworld collaborates with NateOn, a widely used instant messenger service in Korea. If Cyworld users buy fonts with dotori (도토리) in Cyworld, they can use those with NateOn, too.
One dotori costs 100 won, and they are used to purchase virtual goods. Prices vary from about 2 acorns for a wall painting or 6 acorns for a song that plays in your mini-room to 40 and above for a background for your homepage for a year.
Cyworld soon became wildly popular in its home market with 2005 claims that practically every South Korean in their 20s and 25 percent of the total population of South Korea were users. By 2006 its domestic user-base numbered 19 million. But this had dropped to 18 million by 2008.
Its reception in some overseas markets did not prove as enthusiastic, and by 2010 Cyworld ended its operations in Germany, Japan and the United States. As of 2009, it continues to provide service to the Chinese and Vietnamese markets where it has subscriber bases of seven million and 450,000, respectively. So Cyworld also has operations in China and Vietnam by today.
Believing that many US teenagers would use multiple social networks and seeking early access to a then-quickly growing market, Cyworld entered the US market in 2006. It shut down in February, 2010.
In 2006, Cyworld entered a joint venture with a German Deutsche Telekom subsidiary, T-online, and it launched its European version a year later. But strong competition, including StudiVZ and Skyrock, and a saturated market made for dismal future prospects, and by 2008 it had closed operations.
Cyworld had a big effect on Korea’s Internet culture. Many renowned Korean socialites and celebrities possess Cyworld accounts. In 2006, Cyworld received the Wharton Infosys Business Transformation Award for being an organization that has made the best use of IT for transformation.