Korean Portal Sites Annoyed with Google Expansion

[Xerapis]

South Korean Internet portal sites accuse their government of using taxpayers’ money to help their biggest foreign rival. The South Korean government last October announced that it has attracted a research and development center for Google, the world’s largest Internet business. At the time, Google said it would develop innovative Internet technologies for global Internet users by employing Korean personnel.

The Ministry of Commerce, Industry and Energy encouraged Google by saying the ministry would provide up to 80 percent of labor costs for programmers and up to 50 percent of accommodation expenses for employees from Google headquarters who come here to train Korean staff.

Korean portals grumble that the engineers working for Google are not public servants and claim their protests were stifled at the time since they stood accused of monopolizing the market. Now, they feel free to speak out. The trigger was the visit of Google CEO Eric Schmidt to Korea a few days ago. Schmidt said the Korean market was “special” and announced Google was taking the first step forward in doing business in Korea. The regional director and the head of the R&D center chimed in. But while they seemed passionate, they appeared to have forgotten their original pledge to bring Korean technologies to the world. Instead, their comments seemed to focus on competing in the Korean market.

Google’s market capitalization is 18 times higher than that of NHN, the largest Korean portal. In other words, the Korean government is on the side of Goliath in the fight against David. In the other direction, leading Korean portal Daum acquired Lycos in 2004 and entered the U.S. market. SK communications made inroads into the U.S. market in 2006 and NHN launched services in the U.S in May. Neither the Korean nor the U.S. government helped them.

The ministry said critics should wait and see since Korean employees hired by Google will learn the state-of-the-art technologies that way.