Case | HBS Case Collection | November 2008 (Revised November 2008)

Cyworld: Creating and Capturing Value in a Social Network

by Sunil Gupta and Sangman Han

Abstract

In May 2008, the new CEO of Cyworld, a social network company in Korea, had to decide how to create and capture value from his rapidly growing user base. Cyworld was founded in 1999, and in 2003 it was acquired by SK Telecom, a leading mobile service provider in Korea. By 2007, Cyworld had 21 million users and $95 million revenue-$65 million from paid items (music, virtual gifts, etc.), $15 million from mobile networking, and $15 million from advertising. The new CEO had to decide which of these three revenue sources he should focus on in the future and how this choice would influence the target customers, the service offerings, and the required capabilities.

Keywords: Customer Value and Value Chain; Consumer Behavior; Social and Collaborative Networks; Segmentation; Value Creation; South Korea;

Citation:

Gupta, Sunil, and Sangman Han. "Cyworld: Creating and Capturing Value in a Social Network." Harvard Business School Case 509-012, November 2008. (Revised November 2008.)