If you want to see a glittering example of Korea Inc. that isn't a conglomerate, look to NHN Corp., South Korea's most profitable Internet company, and its ambitious chief executive, Kim Beom Soo. A few years ago 38-year-old Kim was pursuing a promising career as a software engineer at the country's biggest chaebol, Samsung Group. But in the depths of the Asian financial crisis in 1998, he quit Samsung to set up his own online game company. "Dream is my favorite word," says Kim. "I simply couldn't get over my Internet business vision."
His entrepreneurial dreams are coming true in a big way. NHN, now the largest gaming portal and search engine in Korea, saw its sales and net profits more than double last year, to $142.4 million and $47.5 million respectively. This year, NHN expects sales of $205 million with an operating profit margin of about 40%. The company Kim set up in 1998 with five of his former colleagues at Samsung SDS Co. -- the chaebol's software company -- now employs 713. Its market cap has jumped more than fourfold, to $1.3 billion, since its listing in October, 2002. NHN runs a game portal, a search engine, and a community site -- all of which are linked. Its naver.com search engine is considered the Google of Korea. "NHN has certainly become a pacesetter in the industry," says Song Jun Ho, general manager at online game company Actoz Soft.
Kim joined Samsung in 1992, after graduating from Seoul National University. He developed software programs for six years before quitting to set up a "PC parlor," where for as little as $1 an hour Koreans could watch movies, check e-mail, and surf the Net. The business gave Kim time to develop online games and earned him $43,000, which he used to set up a gaming company that developed into NHN. It quickly became a hot prospect, attracting $30 million in venture capital.
Then came the dot-com crash of 2000. Ad sales plunged, and bankruptcy loomed as the company's cash dwindled to less than $5,000 in the spring of 2001. Kim's solution to NHN's troubles: Start a business selling avatars, or digital cartoon characters, which game players and chat room denizens use to represent themselves online.
NHN's other managers reluctantly agreed to Kim's idea. They were pleasantly surprised when sales exploded, putting NHN back into the black. In 2002, NHN reported sales of $63 million and an operating profit of $25 million. Now, with sales and profits soaring, Kim's new ambition is to rival competitors such as Yahoo! Inc. (YHOO) in the region. In Japan, the Korean company has already zoomed past Yahoo! Japan Corp. as the country's largest games portal, boasting 65,000 same-time users, about double Yahoo's number.
Kim has also roared into China. In April, NHN agreed to pay $100 million to Searinbow Holdings Corp. to buy a 50% stake in ourgame.com, China's biggest gaming portal, with 600,000 same-time users. "The plan is to use the China-Korea-Japan axis as the springboard to vault into the best Internet firm in Asia," says Kim. This entrepreneur is a superstar.