By Rhee So-eui
SEOUL (Reuters) - South Korea's NHN Corp. 035420.KQ expects faster growth in Internet search and game revenue than its earlier forecasts, and plans to launch a trial of Japanese Web search services in a few months, its chief executive said on Tuesday.
"Our game business revenue has shown stronger than expected growth," CEO Chae Hwi-young said at the Reuters Global Technology, Media and Telecoms Summit. "In South Korea alone, it is expected to grow 40 percent or higher this year."
The Internet portal and game company had earlier forecast 20-30 percent growth in its game business this year.
It expects its Japanese game unit to notch up a similar rate of revenue growth to its Korean operation and sees its Chinese game revenue doubling, Chae said.
NHN operates South Korean portal Naver (www.naver.com), which has 26 million registered users, and game portal Hangame (www.hangame.com) with 24 million users.
On Thursday, it raised guidance for its 2007 operating profit to 340 billion won ($368 million) from 300 billion won and revenue forecast to 870 billion won from 800 billion.
In South Korea, which boasts of the world's highest broadband penetration, global players Yahoo Inc. (YHOO.O: Quote, Profile, Research, Stock Buzz) and Google Inc. (GOOG.O: Quote, Profile, Research, Stock Buzz) are way behind local rivals that offer rich multimedia and Korean-language content, often created by users themselves.
An explosive growth in the local search advertising market has fueled revenue growth at NHN, which dominates the industry with some 75 percent market share in Internet search. Yahoo Korea and Google Korea are estimated to own less than 5 percent each.
"Internet search revenue is expected to grow by 60 percent or faster this year, higher than our earlier forecast of 50 percent," Chae said.
U.S. GAME BUSINESS
Game business is a springboard to becoming a global player for many South Korean game companies, which built their businesses over the well-established broadband networks and a gaming culture centered around Internet cafes.
NHN, which runs a game portal in Japan and a game venture in China, is now eying a share of the North American online gaming market. Its recently-launched U.S. game portal www.ijji.com hopes to win market share from leaders such as Pogo.com or Yahoo Games.
Chae expected revenue from the new U.S. service to come in at just $5 million this year, but added the unit is off to a good start by securing 3 million registered users so far.
NHN's Japanese unit, now Japan's top online game portal, is expected to lead the company's growth as the online gaming market there -- which as long lagged the dominant console games -- takes off.
NHN Japan plans this year to enter the Japanese Internet search service market, which it left in 2005, taking on dominant player Yahoo Japan Corp. (4689.T: Quote, Profile, Research, Stock Buzz). Continued...
© Thomson Reuters 2009. All rights reserved.
| India Investment | Nov 23 - 25, 2009 | Country Summits |
| Global Finance | Nov 16 - 19, 2009 | Financial Services / Exchanges |
| Health | Nov 09 - 12, 2009 | Health |
| Autos | Nov 02 - 4, 2009 | Autos |
| Middle East Investment | Oct 26 - 28, 2009 | Country Summits |
