[SERI COLUMN]Cyworld’s triumph of connectivity

The battle between communications providers and content creators is as old as the invention of the telephone and telegraph at the turn of the century. This same battle is now raging in Korea, where a few once smallish Internet startups are offering innovative services such as “mini hompies” and online cafes.
On March 23, the Samsung Economic Research Institute held in Seoul a presentation session as part of a year-long project to publicize successful digital businesses. First at bat was the president of SK Communications, Yoo Hyun-oh, whose company operates the Cyworld mini hompy (Web sites). Mr. Yoo explained that his company’s success had been due to its intense focus on strengthening already-existing human ties, rather than creating a whole new online relationship from scratch. What’s valuable in cyberspace, he added, is giving everyone the chance to have their own say, away from passively receiving professionally prepared contents.
This echoes what Tim Berners-Lee, the father of the World Wide Web, said of the Internet: “[The Web] tells me something about humanity.” Ever since the Internet started gaining prominence in the early 1990s, many self-proclaimed pundits have predicted that the Web would eventually be taken over by large media companies, which have ample capacity to produce quality content. The reasoning was that content, be it video streamings or news article databases, would be the major source of traffic and revenue on the Web. The proponents of this “content is king” argument would say, “What’s the use of high bandwidth if there is nothing to fill up the fat pipeline?” A similar sentiment was evinced by the chief executive officer of Global Crossing, Leo Hindery, who once said, “I don’t want to be anyone’s dumb pipes. If all you do is racks and servers, that’s dumb.”
But is that true? Five years ago (in Internet time, five years are equivalent to a millennium), University of Minnesota professor Andrew Odlyzko said in his article “Content is not king” that content has never been, and will never be, the be-all and end-all. No matter how good content is, he said, it is in many cases given away for free to generate more traffic, making it an unlikely candidate to be a money-making vehicle.
To support his case, Professor Odlyzko draws examples from the history of past technologies. By his account, the U.S. government heavily subsidized newspaper distribution in the early 19th century in the belief that wide dissemination of information would be the precondition for a unified nation. Meanwhile, letters were charged at a regular rate, resulting in a lopsided situation where newspapers accounted for less than 15 percent of total postal revenues, while making up as much as 95 percent of the freight weight.
That means the very service people were willing to pay for wasn’t content (newspapers in this case) but connectivity (letters). The same is true for today’s Internet. Though most Internet traffic consists of content, including text, images, music files, and videos, the areas Internet users really value are all two-way communication tools such as e-mail, “chatting,” and “blogs.”
Another example confirms this observation. In the past, telegraph service providers looked down on telephone operators because the telephone seemed to them an inferior means of communication that conveyed pointless chitchat. In contrast, the telegraph was a respectable tool of business for important contracts and other purposes, which they figured would generate a great deal of revenue in the future.
We all know, however, that things turned out rather differently. The telegraph was replaced by the telex, which in turn fell to the fax and today’s e-mail. It has now been several decades since the telegraph was consigned to the dustbin of history. The telephone business, by contrast, is still growing, albeit at a slower rate than before. The fixed-line phone business remains much bigger than wireless service, not to mention any other content businesses. AT&T’s decades-old ad campaign slogan “Reach out and touch someone” still rings true.
Today, many means of communication ― such as online messengers, mobile phone text messages and chatting sites ― are used for seemingly trivial purposes. “Where do you live?” “How old are you?” “Wanna date?” These, critics say, are just a waste of valuable bandwidth.
But these throwaway exchanges are exactly what people value most and are willing to pay for over more cerebral content. Perhaps the much-heralded Web 2.0 may be precisely what fulfills the desire of people to express themselves, thereby deepening human relationships. The battle between connectivity and content is now over. Connectivity has beaten content by a large margin, displacing the latter as an unimportant component in Internet space. As a result, professional content creators like myself have to put up with minor status in their organizations.
Instead, the dominant players on the Web are now Cyworld and its up-and-coming competitor Daum’s Planet who figured out early on the simple truism that human relationships always matter, including on the Internet.

* The writer is managing editor of SERIworld, Samsung Economic Research Institute’s English-language Web site.

by Chung Sang-ho