Web 2.0 Asia

This year's Web 2.0 Summit will be themed "Web meets world", in an attempt to look into the web startups that can leverage the web to actually change the world and solve our society's difficult problems, whether that be energy crisis or poverty. (Check out this O'reilly piece - highly recommended.)

From Umair to O'reilly, the big thinkers these days seem to be onto the meme, "Can the web change the world - our physical world - in a meaningful way?" The thing is, there's a Japanese web widget that does just that.

I stumbled upon this Japanese widget via a blogger based in Japan (who writes about Hatena and other Japanese web stuff). It's called Gremz.


From looking at the website only, it's not very clear how the economics work here - namely who pays for trees etc. I can only imagine the blog companies are subsidizing this in return for their added content, but this is only a guess and I'll appreciate it if someone clarifies on this.

Anyhow, this is indeed a good idea. When we surf the web or watch online videos, we don’t necessarily think we are contributing to global warming. But surprisingly, the Internet revolution is increasingly becoming one of the biggest culprits of climate change. This is because servers that power the internet consume massive amount of electricity, and the majority of electricity is still being generated by burning fossil fuels.

For example, according to a latest study, a virtual character or “Avatar” on Second Life (a popular internet game) consumes nearly as much energy as a real-world Brazilian does, and annually emits similar amount of CO2 as driving an SUV for 2,300 miles.

With Gremz, you don't have to feel guilty anymore - keep on blogging, and you are planting a tree in Inner Mongolia! Now, who would have thought blogging could make the world... greener?

Korea's leading internet portal Naver is undertaking a great non-profit project, in partnership with local Starbucks.

The program is called Knowledge iN's Bookshelf (link in Korean). "Knowledge iN", which also happens to be the name for the hugely successful Q&A service, means "guru" in Korean. ("지식인", "知識人")

Under this program, Naver asks gurus from various fields to pick up the best books off their own personal bookshelves. We all know great people are great readers, and peeking into their favorite book collections would certainly be intellectually intriguing.

Then, those books hand-picked by the gurus appear physically in select Starbucks coffeeshops for free reading. (See the top left picture.) The Knowledge iN's Bookshelf website provides links to let the users know which Starbucks coffeeshops have those books.

Despite its huge success and obvious contribution to the Korean web industry in many ways, Naver has been called "an evil company" on, well, more than one occasion - probably due to the company's alledged closedness. But a project like this is something even Amazon isn't known to be doing (Come on, you guys even have Starbucks HQ in town!) and can help enhance Naver's corporate image. Below is a screen shot of Knowledge iN's Bookshelf - these are the books hand-picked by Chan-Wook Park, a prominent Korean movie director. (Seen the Oldboy?)

One of the best mergers happened in the history of Korean web industry was between Naver, a Korean portal, and Hangame, a popular online gaming site. Naver acquired Hangame to form NHN Corporation in 2000. Until this time, Naver had been considered a fledgling, promising web portal at best. Naver was fairly popular, but was a #4 or #5 player - with the solid leader being Yahoo Korea which looked nearly impossible to be dethroned.

But it turned out Naver was very smart, as the company kept investing the cash earned from its Hangame service into Naver search to make the search service better and better, until it became somewhat of a monopolizing web search among the Koreans. Someone at Naver, most likely its founder and Chief Strategy Officer Haejin Lee, had a piercing eye through to the future and saw that search was going to be the biggest killer app of all time on the web. Buying Hangame was a well calculated tactic as improving search required funding and Naver was yet a publicly traded company, though the company just finished $10mm funding. Hangame wasn't cheap at the time either (valued at some $60mm, with Naver worth about $250mm at the time), but Naver decided to make a big bet on Hangame - and the combined company took off from there.

I recently read a story on EST soft, a Korean software company that recently went through IPO (getting itself on the rare list of tech IPOs lately). EST Soft is best known for its Altools suite of free software. EST charges corporate customers, but still the revenue wasn't enough for them to go public. So they started an online game service, including Cabal Online. Gaming service made up about 2/3 of EST's total revenue last year, and without the revenue contribution of game service, EST Soft wouldn't have been able to go public successfully this year.


So, from the cases of Naver and EST Soft, one is faced with a question: Is gaming service the proven cashcow for web and software companies? At least in the Korean market, the above statement has seemingly held true. Game services has been to web/software companies what Jonathan Papelbon has been to Boston Redsox - namely, a trustworthy reliever who could help them win.

It's no secret that web services are very difficult to monetize, and I assume this is not the case for only the Korean market. When faced with a right business model, folks have resorted to things like Google Adsense, freemium, and mobile service. Well, how about adding to the list a gaming service, as a sideways cashcow business that can assist the main business by injecting cash? What do you think? Is this a good strategy, or a less desired strategy that only diverges the company's business model? Will this work in other markets like China or the US?