Thursday, April 10th, 2014
SEOUL, KOREA - The share price of SK Communications has increased more than 10 percent as soon as the market opened. This is largely because of the news that the company would spin off Cyworld that it acquired 11 years ago and focus on its portal site Nate. At 9:18 am on April 9, the shares of SK Communications were traded at 7,910 won, up 10.8 percent from the previous day's 7,140 won.
The company's share price once shot up to 8,100 won, surpassing the 8,000-won level in one year after the peak in May last year. The trading volume was also explosive in the morning session. As many as 1.75 million shares of buy orders (13.6 billion won) have been placed, more than three times of the previous day's trading volume.
Earlier on the 8th, SK Communications said it would let Cyworld go independent as a 100-percent employee-owned venture and concentrate on the business of its Internet service unit Nate. The Cyworld service was launched in 1999 with feverish popularity with young online users in the mid- and late 2000s. In 2003 when it was acquired by SK Communications, the peak subscriber number was as high as 35 million.
Cyworld began declining in the late 2000s, due to the network's closed nature and the limited revenue model relying solely on the sale of dotori (acorns), which can be used to purchase virtual goods such as background music, pixelated furniture, and virtual appliances. The service's reputation tumbled in 2011 when the personal information on its 35 million subscribers was stolen by hackers. After the parent company took a loss of eight consecutive quarters, Cyworld ended up being acquired by the employees in January this year.
