Korean firm NHN has launched a US$45M fund to support small IT firms and help grow venture startups, in line with its strategy to grow the local ecosystem.
NHN will invest a total of 100 billion won (US$90 million) to launch a mutual growth fund that will help smaller local content providers and establish a sounder cyber ecosystem, the company said Monday. It is part of the firm’s set of measures introduced to ensure mutual growth with small IT firms and venture startups. Under the plan, the operator of the nation’s dominant Web portal Naver will spend 50 billion won to establish a fund to support venture startups. Another 50 billion won will be spent on launching a fund to support the work of culture contents developers. “I’ve fully acknowledged the growing criticism. What people want is to admit such criticism and accept things that we may have been ignored,” said NHN CEO Kim Sang-hun during a news conference at the Press Center, downtown Seoul, Monday.
NHN also plans to make a clear distinction between search results and advertisements. It will block pornographic materials and other unfiltered content. Lastly, the firm will help local content developers expand businesses outside the Korean Peninsula. “NHN will try to seek ways with the government and interested parties to ensure fairness and strengthen transparency of managing the portal,” the CEO told reporters. “We will be aggressive in helping content developers develop more competitive content. As our LINE messaging app has secured 200 million users in 231 countries, there is a strong possibility that we will see more content that goes global,” he said.
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NHN vowed to offer various educational, marketing, mentoring programs with promising local ventures and smaller players to help them generate tangible results. But the chief executive stressed that NHN didn’t extend its dominance to non-core businesses other than the Internet and gaming. “NHN isn’t the company that has the so-called ‘department store-style’ business structure,” said the executive.
The NHN’s plan comes following mounting criticism of it hurting the online ecosystem by expanding its territory to non-core businesses. NHN is currently being investigated by Korea’s top anti-trust regulator over its alleged unfair business practices. The ruling Saenuri Party plans to submit a new bill to limit and regulate NHN’s market dominance. NHN’s share is about 80 percent of the domestic search market.
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