Google, Yahoo see contrasting fortunes in South Korea

There may be two Koreas but, whilst there is only one South Korea, it seems possible to look at the country in two different ways…

Last week, Yahoo announced it will close its Korean business, explaining: “Despite the hard work of the team, the Korean operation has faced growing challenges over the past few years that now make scaling our business very difficult.”

Contrast that with App Annie data showing a 6x increase in Google Play revenue in the country since January…

What accounts for the difference?

Well, much of that growth in Android app revenue is likely because Google has this year improved payment options in its app store, including introducing subscriptions and in-app payments. After all, iTunes Store, which already had such functionality, has seen flat app revenue.

And other App Annie data shows the national picture is far from all about growth – app downloads across iOS and Android haven’t grown all year…

The difference appears to be that Google has a mobile apps ecosystem while Yahoo has only an advertising business.

Advertising firm JC Decaux reckons advertising spend in South Korea will slow from 2011’s 8.8 percent to 4.4 percent in 2013. But ZenithOptimedia reckons the market will grow by $1.6 billion by 2014.

AP reports:

“Yahoo’s South Korean market share has become negligible in recent years as users flocked to Naver, Daum and other portals operated by South Korean internet firms.

“Yahoo Korea was also hurt by the rapid adoption of smartphones and the mobile Internet, which made it more difficult to attract advertisers to web portals designed for desktop computers. Overture Korea added to problems by failing to renew key advertising deals.”

KoreanClick gives Yahoo just a 1.5 percent share of search (via WSJ).