Dot-com founders aren’t boss

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Dot-com founders aren’t boss

In one sector, a new generation of younger entrepreneurs is turning the traditional Korean owner-manager concept on its head. This new concept in corporate governance has taken root in the dot-com industry, propelled by the constant, rapid change that characterizes the sector. In order to survive and thrive in this market, positions and titles are of little importance to young dot-com founders. Kim Jeong-ju is the founder of Nexon Corp. One of Korea’s largest online game companies, Nexon saw net profits of 21 billion won ($18 million) from sales of 65 billion won last year. Mr. Kim owns more than 50 percent of the firm, but is neither its chairman nor its chief executive. He only presides over Mobilehands, a subsidiary of Nexon, responsible for mobile units. Nexon’s chief executive is Seo Won-il, 27, a professional manager who does not own a single Nexon share. Mr. Kim, the founder, retired from Nexon in 1999 when “Kingdom of the Winds,” the first Korean online game, became a hit and the company grew dramatically. He thought it better for a younger and more competent manager to run the company in the fast-changing game industry. “Mr. Kim is focusing on mobile games, a small part of Nexon, and watching the company from a distance,” Mr. Seo said. Jeong Sang-won, former chief executive of Nexon and its second largest shareholder, is working immediately below Mr. Seo. Mr. Jeong, who was once Mr. Seo’s boss, reports to him at the directors’ meeting every morning. Their relationship has now became familiar to company employees. NeoWiz Corp. is another company in which the founder is working under a professional manager. NeoWiz is an Internet portal that runs SayClub, an online chat site, and Pmang, an online game portal. Its founders are Na Seong-gyun, 33, and Jang Byeong-gyu, 31. Mr. Na owns an 18 percent stake and Mr. Jang, a 15 percent stake. They were recently discharged from military service, and returned to find their company thriving under its current chief executive, Park Jin-hwan, 32, a hired manager. “Their exact positions will be decided by late this month, but what is certain is that the two founders will work under Mr. Park,” said a company official. Mr. Park has been a great success at the helm of the company, driving its penetration of the online games market and making Pmang the market leader. His term was extended to 2007 by the board. Lee Hae-jin, the founder of NHN Corp., the operator of Naver, one of the largest Internet portals in Korea, is now vice president and chief strategy officer of the company. He owns a 6 percent stake in NHN and is the largest individual shareholder, but the chief executive is Kim Beom-soo, who holds a 2 percent stake. Some people find it bizarre to see Mr. Kim heading the company, while Mr. Lee is helming Hangame, an online game site that Mr. Kim founded. “I take care of the comprehensive management of the company and external relations, while Mr. Lee formulates corporate strategy,” Mr. Kim said. He called the approach “effective allotment.” When NHN acquired Hangame in 2000, Mr. Kim was in charge of the game unit while Mr. Lee managed the portal unit. But as the company got bigger, they found that it would be better to have a single leader. In the best interests of the firm, and regardless of stake size, they selected their positions based on personal capabilities and aptitude, Mr. Kim said. by Yoon Chang-hee
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