NHN co-founders clash in mobile arena

Kim Beom-soo

The two founders of NHN, the company that runs Korea’s most widely used Web portal, Naver, eventually went their separate ways but are now facing off in the rapidly expanding mobile market.

Kim Beom-soo and Lee Hae-jin, who were CEOs of Han Games and Naver, respectively in 1999, merged their firms in 2000. The two Seoul University graduates and friends named the new company NHN in 2001, and together expanded to become the biggest Internet browser in Korea.

Things were great until 2007 when Kim left to do his own thing, while Lee as chairman led the company to become a large corporation.

Lee Hae-jin

Stalling growth in desktop-based services and always on the lookout for potential profit, the two are now clashing in the mobile messenger market, one of the many new business platforms sought by content providers.

Kim is chairman of Kakao Talk, while Lee’s NHN has countered by developing its own messenger service called Line that is threatening the former’s dominance.

Founded in March, 2010, Kakao Talk with 53 million subscribers is far ahead of Line. Reflecting its fast growth in two years the firm has plans to relocate its head office to the satellite city of Pangyo in Gyeonggi Province from its current one in Yeoksam.

But Kakao Talk, with around 200 employees is still disproportionately smaller than NHN. Its Seongnam-based rival has 3,600 employees and marked annual revenue of 2 trillion won last year while Kakao Talk has yet to see a turnaround from losses.

Kim’s firm is looking to maintain its lead through diversified content that includes a social networking service, game center and a soon to be revealed social commerce service.

“I think the chairman believes that we can launch a lot of services that we couldn’t last year, and he has high expectations especially for our game platform,” said Kakao Talk CEO Lee Sir-goo during a recent interview with The Korea Times.

After starting over a year later in June 2011, Line has 50 million users in half the time it took its rival thanks to NHN’s aggressive investment and promotion.

The quick rise can also be attributed to Line’s stronger presence outside of Korea, especially in Japan, which accounts for nearly half its total subscribers. Over 90 percent of Line’s users are from overseas, according to NHN representatives.

NHN plans to expand its service to China and the United States by the end of the year.

Most users of Kakao Talk, on the other hand, are here. With less than 20 percent coming from overseas Lee said, “We will focus for now on Korea as we have a larger user pool here but we feel the need to venture to foreign countries, especially Japan.” <The Korea Times/Cho Mu-hyun>

news@theasian.asia