We sat down with the new CEO of SK Communications, Mr. Shin Cho the other night. This was actually during SK Telecom's Analyst Day and we were lucky enough to be seated on the same table during dinner (we requested it obviously). Mr. Cho, is currently heading SK Telecom's Internet & Media Group but once the merger is consummated between Empas and SK Coms on November 1, 2007, Mr. Cho will become the co-CEO of SK Coms along with Mr.
Park Sang Joon originally from SK Coms. The current CEO of SK Coms, Mr Yu Hyun Oh, will re-join SK Telecom and head the US operations, both Helio and Cyworld of the US.
Main takeaways:
1) Mr. Cho will be in charge of strategy while Mr. Park will mostly oversee operations.
2) SK Coms decided to completely merge with Empas sooner than later because once the synergy is realized, Empas' value would have been too high for SK Coms to buy later.
3) Mr. Cho was very optimistic about Empas synergy with SK Coms (Cyworld and NateOn) and was confident that search ad market share would increase going forward. Right now, users are led directly to Empas from Cyworld homepage, but once the merger completes, NateOn will also carry Empas'
search box along with all the minihompys.
4) Mr. Cho believed that SK Coms now has all the parts to succeed and grow.
Future acquisitions will only be targeted on key start-ups with break-through technologies. Nothing major in acquisitions.
5) The CEO also confirmed that Etoos sales have hit an inflection point but he still believes there is much work left to do.
6) On Cyworld, Mr. Cho was a bit conservative and said that HappyClick is in still in early trial. (However, our channel check confirmed that roughly 1.5m active users have signed up already.) Cyworld overseas is taking a bit more time than expected.
7) On mobile search market, Mr. Cho agreed with our view that there is tremendous opportunity for both Empas and Nate.com, considering SK Telecom presence in Korean wireless market.
8) Mr Cho also pointed out that there are many ways SK Telecom can support SK Coms... Did not get into much details here.
Our Two Cents:
We had no prior interaction with SK Coms management team before we met Mr.
Cho, so the meeting was actually a relief since we were done with the initiation report (sent to editing) and most of what Mr. Cho said more or less confirmed our views. Here is the full PDF report. Sorry for the delay.
