The market will sort out gold from trash. Last year witnessed explosive growth in the number of Internet users in Korea. According to the Ministry of Information and Communication, more than 17 million used the Internet as of the end of last year, a whopping 70 percent growth from 10 million at the end of 1999. The growth in the Internet population is a boon to Web portal and community providers, as it expands their potential market volume. But many in the industry are still struggling to find ways to turn a profit.
Portal services rely on advertisements for the largest portion of their revenues.
Despite steady growth in the online ad market, skepticism has mounted about how effectively online banner ads reach consumers. The industry group expects online ad revenue will grow 2.3 times to 220 billion won this year. But skeptics said the online ad is likely to lose steam, as Korean businesses at large are expected to suffer from a slowdown this year. Advertising is one of the last concerns for companies when times are difficult. Portal and community providers are high on the lists of those most likely to collapse early.