Google on Tuesday declared war on Apple at a conference of program developers. The internet search giant said it has formed an alliance with 10 partner companies including Samsung Electronics, LG Electronics, Motorola, Sony Ericsson, Verizon and Vodaphone to challenge Apple.
But Korean companies seem content to maintain their hold over the domestic market while failing to tap into foreign markets with creative new services.
Until recently, Korean Internet portal sites were able to make easy profits using their monopolistic control of the domestic online market. But they rarely succeeded abroad. Naver, which posted an operating profit of W620 billion (US$1=W1,075) last year, has yet to make headway in the global market. Although it controls 70 percent of Korea's Internet search market, it has only managed to take up 1 percent of the Japanese market and failed to generate ad revenues since it began operations there in 2007. This shows that Korean search engines are becoming increasingly parochial.
Second-ranked Internet portal Daum acquired U.S. search engine and blog service provider Lycos in 2004 for US$95 million but sold it last year. And SK Communications has shut down most of the business projects it launched in the U.S. and Europe in 2008.
The situation is the same for Korean telecoms, with some swimming determinedly against the stream. One example is a move to block free mobile phone calls using the Internet. "The latest trend in the mobile industry is to replace expensive and inconvenient communications systems with innovative and open ones," said Lee Zoon-ky, a professor at the Yonsei University Graduate School of Information. "If Korean companies only try to protect their domestic cash cows, they will lag behind in global competition."