MARKETING

MANAGEMENT

ASSIGNMENT
On
CYWORLD
Creating and Capturing Value in a Social Network
SUBMITTED BY
GROUP 6
Sitesh Kumar Parida 15218
Manoj Kumar 15219
Abhinav Khare 15220
Neelam Kumari 15221
Rashmi Singh 15222
Arushi Agrawal 15303
Gananayak Singh 15304
Bismayee Rath 15305
Anshul Kumar 15077

CYWORLD
Creating and Capturing Value in a Social Network
Questions for discussion
1. Why do people use social networks?
Social networking sites (SNS) are defined as web-based services that allow individuals to:
A) Construct a public or semi-public profile within a bounded system,
B) Articulate a list of other users with whom they share a connection, and
C) View and traverse their list of connections and those made by others within the system.
SNS basically allows users to create a personal profile and can be broken down into internal
social networking (ISN) or external social networking (ESN). The former with examples such as
a community within a company or associates etc, and the latter offers examples such as MySpace
and Facebook. An ESN is public and available to all web users to communicate and are designed
to attract advertisers although they can also be specialized communities such as DeviantArt.
People are no longer confined to social networks in the near physical neighborhoods. The bond
to family and spatially co-present others are decreasing and people actively construct their social
relations, because of the relations based upon shared interests and common goals

2. How can you segment Cyworlds users? Which segments should Cyworld target? How can it
create value for users in these segments?
As we can see in the case study, during the growth phase of the company, by 2007, Cyworld had
21 million users and $95 million revenue of which $65 million from paid items (music, virtual
gifts, etc.), $15 million from mobile networking, and $15 million from advertising.
CyWorld made most of the revenue from the paid items like music and virtual gifts for their
minihompys.
Cyworld segments their users according to ABC segmentation in the case study:-
1) Active users
2) Buyers and
3) Connectors.


As we can see in the Research of the case study, Korean and USA user choices are different about
the way they preferred to interact.
We can see that the choices vary as per the Geographical location.
Korean users uses cyworld for connecting to their friends ,families and parties , whereas Users
from US were more interested in creating events, listening to music and were not just limited to
relationship Building.

With Company segmenting with ABC segmentation strategy, Cyworld should target the Active
Users as well as the Buyers.
Buyers should be encouraged to engage more with their connectors.
Active users should be encouraged to become buyers as well.

Behaviour of the Most Active users should be analysed with people with most number of
connections on Cyworld.
We would Suggest Continuous monitoring to the behaviour of these segments and an effort to try
and tailor services to these segments.

Cyworlds main focus should be on the existing market, Korea, and keeping the existing clients
and should not try to avoid focus even if the customer may fall in any category of the ABC
segmentation.
More efforts for retaining the users as the retained user may anytime become a connector.

Special Growth strategies should be focused for the US with more content available for the US
Users such As videos, Music Files and event information which may or may not be available to
the Korean Users.
Some Special customized Services needs to be added for Some Users who are more focused
towards Privacy of the information they share with Cyworld.

However value will need to be created by altering the existing limited offerings as it can clearly
be seen in the research that these segments differ in their choices and their expectations to Social
Networking websites.


3. Which is most valuable to Cyworld an active user, a user who spends a lot of money with
Cyworld or a user with a lot of connections?
User with a lot of connections is most valuable to Cyworld because the main criteria to improve a
social networking site is the number of connections . If there are more users then the growth will
be more. The users have a network of friends. For Cyworld users take pride in having a large
number of friends and it becomes a badge of honor for Cyworld. By the ABC segmentation
which is Active users ,Buyers and connectors if the connectors increases then the revenues also
increase.



4. How is Cyworld different from Facebook and Myspace? How are these social networking sites
different from other large websites such as Amazon, Yahoo or Youtube?
The biggest immediate difference between Cyworld and the other sites is market segment.
Cyworld is highly popular in Asian countries, and before I received the case study I had never
heard of it before, whereas Facebook, Myspace, Amazon, Yahoo, and YouTube are more
commonly known to Western culture.

Facebooks income is generated with advertising, whereas Cyworld is advertising, selling of
virtual products and music for minihompy.
Facebook and MySpace have the user, centred around a network of friends and groups where they
share images, videos, music etc. Cyworld appears to be more like SIMS type virtual reality,
almost a game, where they can fictionally interact, buy gifts, and engage in such activities such as
get married in a virtual setting.
The difference between Facebook, Cyworld and MySpace and Amazon is that the latter is a
retailer not focused on social aspect. Users can interact by rating, or commenting on products,
however the intent or the connection is for transactional purposes only. Money is generated by
Amazon by the sale, or the commission on the sale, whereas the others have advertisement or
virtual sales income model. Facebook, MySpace and Cyworld have all tried some form or
another of targeted advertising (which carries potential privacy infringements); however Amazon
fiercely protects their consumers privacy
The difference between Facebook, Cyworld and MySpace and YouTube is in the content.
Where the former three allow various forms of content sharing, YouTube is specifically designed
for User Generate Content Videos. On YouTube you dont need to be an active member of a
channel (community) to derive benefit or share an interesting video, but you can follow or
subscribe to a channel.

5. What should be Cyworlds business model paid items, mobile networking or advertising?
Should Cyworld explore any other areas of opportunity?
According to our observation, Cyworld should concentrate on Advertising as this business model
is having the largest growth potential in the future with a generation of around 16% of Cyworlds
revenue in 2007,t he online advertising market is expected to have a stabilize growth and achieve
a target of $2 billion by 2010. As we can see from Exhibit 10 Advertising have a hike of 30% in
2005-06 revenue and 25% hike in 2006-07 revenue which is better then the percentage rise in
revenues of Price items and Mobile Cyworld.
Composition of Cyworld's Revenues in 2005-07 (in US $)

Column1 2005 2006 2007 % Rise in 2005-06 % Rise in 2006-07
Paid Items 58 67 65 15% -2%
Mobile Cyworld 9 14 15 55% 7%
Ad 9.2 12 15 30% 25%
Total 76.2 93 95 22% 2%

15%
55%
30%
22%
-2%
7%
25%
2%
-10%
0%
10%
20%
30%
40%
50%
60%
Paid Items Mobile Cyworld Ad Total
% Rise in 2005-06
% Rise in 2006-07
Having a different approach towards introducing advertising with the idea of keeping it a clean
community and making it different from Yahoo and other portals, it started programs like Happy
Clicking generating revenue without actually paying cash, Cyworld decided to pay its users
Cyworld money which will help its users inbuying digital items from Cyworld again helping in
increasing sales of virtual items resulting in increase in revenue through Paid items.
Introducing advertising based model and experimenting with brand minihompys were encouraged
by the company for free digital items, company had many options for the future including Cy-TV
where members could access free content in return for watching video ads.