MySpace will be closing its Korean satellite office by end of the month, we’ve learned, though its Korean portal will continue to operate and will be maintained by staff in the company’s other Asian offices. Sources close to the company say that the layoffs will affect fewer than ten people, but that unlike MySpace’s recent shutdown of its Netherlands office where some employees were offered reassignment, the Korean employees will not be consolidated into other regional offices.
While MySpace wouldn’t comment on its usage statistics in Korea, it’s likely that the company was underwhelmed by its growth since launching a localized portal last April. Korea is a notoriously difficult market to crack, primary because it is dominated by Cyworld – a social network founded back in 1999, long before MySpace was even in beta stages. Reports have pegged Cyworld’s membership to include up to 90% of Koreans in their 20’s – a staggering figure that leaves little room for newcomers. Add that to substantial cultural differences and it’s little surprise that MySpace is struggling get a foothold in the market.
We should note that despite Cyworld’s Korean dominance, that company has had a hard time expanding its presence abroad. Cyworld’s US site, launched in 2006, has largely failed to catch on, after months of research spent trying to tailor the network to an American audience.
Outside of Korea, MySpace has generally been more successful at expanding abroad. The company reports that international revenue is up 35% year over year, with engagement up 38%. But Facebook is growing even more quickly internationally, and is now nearly twice the size of MySpace worldwide.
MySpace issued the following statement regarding its Korean office shutdown:
On Thursday 22nd January 2009, employees in our Seoul office were informed of our decision to close our Korean facility and MySpace/FIM legal entity Fox Interactive Media Korea.
Since opening MySpace in Korea we have realized many successes and gained invaluable insight into the local market. Our team created a locally relevant and unique experience for the Korean community and built awareness for the value of open platforms across the market for developers. We have also advocated cultural diversity and enabled our users to harness the power of our platform to creatively express themselves locally and globally.
We are incredibly proud of our accomplishments and of the team that built MySpace Korea.
We are laser focused on profitable growth and rapid monetization. We are very pleased with how this strategy is gaining traction around the world and we believe this decision will enable us to continue to prioritise our investments in the markets that will achieve this for the brand most rapidly.
Korean MySpacers will continue to enjoy access to MySpace at http://kr.myspace.com/
It is expected this change will take effect from 28th February 2009.
