South Korea Wires Up

Las

t year internet gaming company NCsoft found it had an embarrassing problem. The Seoul firm is the creator of Lineage, a medieval cyberworld in which players do battle with swords and shields, and use magical rings to change their identities. Players can swap weapons or buy and sell them using virtual assets. So popular is Lineage--and so competitive are its fans--that some players began buying and selling weapons with real money instead of virtual money. Identity rings were going for as much as $300 each. NCsoft didn't like that practice and barred two offenders from using the Web-based game. The barred players barged into NCsoft's office and demanded to be allowed back online. The company had to call the police.

That's how it is today in South Korea: the Internet seems to have made not just Lineage fans but also the whole nation a little cybercrazy. More than a third of South Korea's 47 million people are logging on to the Internet--one of the highest per-capita ratios of Web access in the world. In fact, South Korea is one of the most wired--and wireless--places on the planet. So faddish are all things cyber that hip young Korean men have adopted the scruffy, geeky dress of Microsoft chairman Bill Gates.

More astonishing still is how South Koreans have embraced the Internet as a tool for living, American-style. In what was a tradition-bound, dirt-poor farming country barely a generation ago, South Koreans are going online to network, day trade, date and prowl for sex. Ambitious start-up companies are churning out content to meet the billowing demand. Computer gaming has become a professional sport, with sponsorships, prize money and battles performed in public. "South Korea is a laboratory," says Daniel O'Neill, executive chairman of QoS Networks, a Dublin Internet company that plans to set up shop in Seoul next year. "You have a whole country that is a hotbed of Internet systems."

Being located in a Web-crazed country did not prevent shares of South Korea's Internet companies from plummeting after the global dotcom bubble burst last spring. (The country's high-tech kosdaq stock exchange has tumbled 80% since its peak in March--steeper than nasdaq's fall.) But that hasn't shattered South Korean faith in the New Economy. Info tech still accounts for more than 10% of the $400 billion economy, and that percentage must grow further if the country is to continue its economic climb. With its labor now expensive in international terms, and with few natural resources, South Korea has figured out that it can't continue to rely on exports of ships and low-end memory chips.

This is the real motive behind the country's single-minded devotion to the Internet. Three years ago, games like Lineage didn't exist. Even if they had, nobody had access to the high-speed broadband pipes needed to load their complex graphics. But South Korea's government has been encouraging IT businesses like networking, software development, system integration, content business, B.-to-B. portal operations and database mining. It has slashed red tape for Internet start-ups and deregulated the telecom industry. Result: Internet-access rates in South Korea were dirt cheap just as the Net started to take off. Today more than 3.5 million homes have high-speed Internet access, more than double the number five months ago. The figure in Japan, by contrast, is a puny 640,000 for homes and businesses combined. Internet-ready phone lines are standard equipment in new South Korean apartment blocks.

For younger South Koreans, the major catalyst for the Web craze was the proliferation of "PC rooms," Internet cafes offering high-speed access for as little as a dollar an hour. Three years ago, there was a handful of such cafes; today there are at least 20,000. At any hour of the day or night, people are playing games, sending e-mail, doing homework or looking for online love. Cho Jung Wan is spending up to 10 hours a day playing Lineage, killing a few weeks' time before he starts his military service. "After collecting weapons and stuff online, I feel like I've gotten rich in the real world," he says.

The Internet has also provoked something of a cultural revolution. In a society still deeply influenced by conservative Confucian values, the anonymity and freedom of cyberspace has provided an escape from old-style mores that the young in particular find oppressive. The Web has made casual encounters between the sexes much easier in a society where Western-style dating is a relatively new concept. Online dating is hugely popular among high school and university students.

Just ask Choi Moon Sun, 27, and Kim Kwang Chul, 26. Choi was in a PC room in July 1998, trying to stay awake while waiting to catch the first morning bus back to her home in the suburbs. Kim, a university senior, accidentally clicked on her icon and kept pestering her for a chat. They dated, got married a year later, and are expecting their first child later this year. Says Choi: "PC and the Internet became an important part of our lives."