KOREAN RULE PUTS YOUTUBE'S LOCAL BIZ AT CROSSROADS

SEOUL, Aug 19, 2008 (AsiaPulse via COMTEX) -- GOOG | Quote | Chart | News | PowerRating -- YouTube, the world's largest video-sharing Web site, has recently found itself in a difficult position in South Korea, having to decide whether to protect anonymity or follow suit with a government plan to require private information for online users.

Google Inc., YouTube's parent company, will likely have to make the decision within the year, as the government plans to amend laws to enforce the "real name system," currently limited to larger Web operators but soon to include smaller ones, starting next year.

South Korea is the only country in the world where Internet users are required to input their name and resident registration number, given upon birth, to subscribe to portals.

That system, which currently applies only to Web sites that attract more than 300,000 daily visitors, will be expanded to include sites with 100,000 visitors per day, according to the plan announced last month by the Korea Communications Commissions (KCC), the country's communications regulator.

A weekly visitor tally of YouTube's Korean Web site, launched in January, reached 800,000 in the second week of this month, according to industry reports, making it likely the company will be obliged to adhere to the new requirements once related laws are revised next year.

"Google's basic philosophy is to fully respect local laws, and at the same time, try to harmonize means of protecting users' private information," Lois Kim, head of communications at Google Korea, told Yonhap News Agency by telephone.

Legal officials at Google's headquarters and local offices are currently deliberating on the matter, she said, ruling out the possibility that the Internet giant will pull out of South Korea.

Analysts forecast the company will likely tailor itself to the new government regulations, based on similar moves made by Google and Yahoo! Inc. in China, where the search engines agreed to government regulations requiring a level of censorship in their search results.

"It can be seen in Google and Yahoo!'s experience there, reversing expectations that they would maintain an all-access policy," said Kim Seok-min, an analyst at Dongbu Securities.

"Companies just can't do business without following respective regulations," Kim noted.

Overseas revenues of U.S. based Internet companies are becoming an increasingly significant portion of their total revenue. Last year 48 per cent of Google's revenue came from outside the U.S., up from 39 per cent in 2005, according to market reports.

The KCC currently does not plan to make room for any exemptions from the new regulations, even for Google or YouTube, a ranking official at the regulatory body said.

"Since they're operating inside the country and considering their market influence, it (YouTube) will most likely be required to follow the revised system," a ranking KCC official said, requesting anonymity.

The official, however, emphasized that the KCC will review appeals from foreign-based companies requesting exemptions when attached with hard statistics on how the proposed move might erode their user base.

So far, Google has not approached the KCC on the matter.

"We are also eager to be notified of the specific pros and cons surrounding the envisioned law," officials noted.

Despite its global dominance, Google has struggled to make its presence felt in South Korea where homegrown rivals such as NHN and Daum remain widely popular.

(Yonhap)

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