The future of Cyworld, a social media platform that was very popular years ago, depends on a final court ruling on CEO Jeon Jae-wan, according to industry sources Tuesday.
Jeon has been indicted on charges of failing to pay a total of 1 billion won ($830 million) to his former employees after the company suffered financial difficulties. The trial is scheduled on July 25 at Seoul Eastern District Court.
If the court next month rules that Jeon is largely responsible for the payment delays, it would make more difficult for him to find investors to continue the business, the sources said.
Cyworld launched in 1999 and was purchased by SK Communications in 2003. It became one of the first social media companies here to be profitable, and once had as many as 25 million users.. However, it began to lose appeal with the expansion of foreign platforms like Facebook and Twitter. Regardless of efforts to revamp the service, it failed to recover.
According to sources, Jeon is likely to take steps to terminate operations if the court rules against him.
If the court rules in favor of Jeon, he will have more leeway to find investors and revive the troubled business.
Jeon told the ICT Ministry that he is currently looking for potential investors and wished to continue the business. An official said that added that the ministry will check with Jeon after the trial and ask him about his future plans.
The Cyworld domain will be open until Nov. 21, but users are currently unable to login in through the official website.
The Korea Communications Commission has said that it would take measures to protect user data should Jeon decide to terminate operations.
By Shim woo-hyun (
ws@heraldcorp.com)
