NHN, which runs South Korea’s biggest portal Naver.com, kicked off its news aggregation service called “Newsstand” in April, only to see plunging traffic and complaints from local news media, according to a recent forum.

At a forum of online journalism experts who reviewed the portal’s news service, Sangji University professor Kim Kyung-hwan criticized the usability of the system.

“The news service is very inconvenient for those who do not have a specific preference of the press.” He said it is an inappropriate system for people who want to get quick access to the latest issues regardless of source.

Naver virtually monopolizes the portal service market, a dominance which in turn leads to its absolute grip on the online news service market. Instead of visiting individual newspaper and broadcast websites, most Korean users browse news on Naver’s PC and mobile platforms.

To avoid conflicts with news media, Naver had carved out a precious chunk of its front page to offer what it called “Newscast” -- a section in which news media outlets provide links to their articles on their own pages. But the service turned into a battlefield of sensational news items, touching off criticism from ordinary users.

In April, Naver implemented a major overhaul of its front-page news section, changing the name from “Newscast” to “Newsstand.” The new service, modeled after real newsstands, allows users to select preferred media. On the front page of Naver, as a result, there are no news headlines or direct links to actual news items; instead, users come to see a host of media brand icons.

Newsstand, in contrast to Naver’s own forecast, hurt its broad online traffic. Korea’s major media companies were also hurt, largely due to the sharply decreased traffic from Naver following the shutdown of the Newscast service.

“Before the Newsstand service started, 62 percent of online news consumers used Newscast. However, after the renewal, only 15 percent of them were found to be using the system,” Lee Joo-won, a manager at Nielsen Korea said.

Local dailies such as the Naeil Newspaper and the Chosun Ilbo are now considering their own digital subscription plan to pull out of Naver’s news service.



By Park Han-na and Jin Eun-soo
(hnpark@heraldcorp.com) (janna924@heraldcorp.com)