Articles by mgedwards

The Yin and Yang of Dr. Hwang

I haven’t had much time to write lately with the lead-up to Christmas.  My Christmas cards haven’t been mailed yet, and I haven’t even sent out the Christmas e-cards yet.  I haven’t even purchased gifts for my wife and child.  I am so ashamed.  But I have been spend more time offline with my family, which I consider to be a good thing.  Forgive me, Dear Reader, for posting intermittently.  As always, it’s a shame that the commercialization of Christmas makes the holidays so much busier and less cheerful.
 
If you live in Korea, by now you’ve probably read about Dr. Hwang ad nauseum.  Dr. Hwang Woo-Suk is a doctor of veterinary science at Seoul National University and expert in stem cell research and cloning whose has been accused of improprieties and ethical lapses.  I featured Dr. Hwang in my August 4th blog entry, where I discussed Korea and its role in the future of cloning.  If you live outside Korea, you may also have heard about Dr. Hwang and the recent controversy about his research.  I won’t go into detail about what happened because it is such a touchy subject.  I am not an expert in cloning and don’t have enough information to have an opinion on his case.  I direct you to The Marmot’s Hole, which has many insights and links to various sources to learn more about Dr. Hwang’s predicament.
 
At the same time, I would be remiss if I failed to mention such an important and controversial topic in Korea today.  This is perhaps the "hottest" news story in Korea right now, or at least a close second to alleged North Korean counterfeiting and the Korean Government’s response.  I won’t postulate whether Dr. Hwang and members of his team are guilty or innocent of the accusations.  The findings of the investigation won’t be released for at least another month (Seoul National University will decide his fate).  Instead, I want to focus on an interesting dynamic in Korean society laid bare by this controversy; that is, the delicate interplay between the Korean media and the fundamental institutions of Korean society.  I define these instutions to be the primary political and economic entities in Korean society, include the government and industry.
 
The Korean media often clashes with these institutions.  The Korean media, recently voted the as having the greatest press freedom in Asia, is a very potent force in Korea (Korea scored even higher than the United States).  Much like yin and yang, there exists a delicate balance between the Korean media and institutions.  The media reports on the excesses of these institutions, such as when a politician is corrupt or misspeaks, and occasionally the institutions rein in the media, such as when the Korean Government blocks certain web sites.  The Korean public ultimately becomes the arbiter of these disputes, supporting either media contentions or government intervention when a major conflict exists between them.  In some cases, the media wins, and in others, the institutions win.  Yin and yang did not appear on the Korean flag by chance–they are still very much alive in Korean society and fighting for balance.
 
Dr. Hwang in many ways embodies one of the nascent, yet increasingly vital Korean institutions–Korea’s medical industry.  Dr. Hwang is extremely popular among Koreans for pioneering stem cell research and increasing the stature of Korea’s domestic medical industry.  He is such an icon that he even appeared on a Korean postage stamp.  Dr. Hwang and his team are now the central figures in a fascinating tragicomedy playing out between the Korean medical industry, particularly Seoul National University, and the Korean media.  What I find most interesting is that as this controversy has played out, the tension between institutions and the media has been particularly acute.  It will remain heated until balance has been reached.  Dr. Hwang is currently under investigation as a result of an MBC news report broadcast recently.  Consequently, MBC received the ire of many Korean protesters, and the show that sparked the controversy, "PD Notebook," has been cancelled despite 15 successful seasons on the air.  The Korean public, at least those I have surveyed, have tempered their admiration of Dr. Hwang with the realization that the investigation of Dr. Hwang must be conducted fairly and uncover the truth, even if it brings the downfall of Dr. Hwang.  It remains to be seen whether the Korean public decides in favor of the media or in favor of Dr. Hwang and the medical industry.

Branding and the legend of Santa

Tonight we went to my wife’s Christmas party at Outback Steakhouse in Seoul.  It’s the first time I’ve been to Outback since my wife and I went to the one close to our home in the Seattle area a few years ago for our anniversary.  This is inconsequential until you consider that Korea has scores of Outback Steakhouses, and they’re extremely popular here.  It seems easier to find an Outback here than a McDonald’s.  Why?  Because Koreans love steak and lobster.  The Outback menu is tailored made for the Korean palatte, epitomizing what many Koreans consider to be the best of western cuisine.  Despite being headquartered in Tampa, Florida, the company also plays up its Australian image and reinforces the interestingly relationship Australians have with the two Koreas.  I find it ironic that Outback Steakhouse is an American restaurant chain that serves Australian beef in Korea (U.S. beef is currently banned in Korea but may be available again soon).
 
Outback Steakhouse reminded me of an interesting phenomenon in Korea–the immense popularity of certain western brands.  While their competitors may also sell product in Korea, certain western brands have established a very strong presence in Korea and have significant local brand recognition.  For example, Black Angus recently opened in Korea, but it faces an uphill battle against its primary competitor, Outback.  TGI Friday’s restaurants are also prevalent.  Dunkin’ Donuts, Baskin Robbins (along with Dunkin Donuts, a division of Allied Domecq), Starbucks, and 7-11 have also established a strong presence in Korea.  Interestingly, Burger King is also very popular in Korea, perhaps as popular as McDonald’s.  It seems that brand building in Korea is as important as the product itself.  Take donuts, for example.  Many Americans would agree that Krispy Kreme sells a better tasting donut than does Dunkin’ Donut.  Koreans tend to prefer moderately sweetened pastries.  However, they make an exception when it comes to eating Dunkin’ Donuts’ donuts.  Krispy Kreme may have the better donut, but it will hard pressed to overtake Dunkin’ Donuts in the Korean market.  Dunkin’ Donuts sells a known product already popular with Koreans, and they will not switch to Krispy Kreme lightly.  Starbucks and The Coffee Bean have experienced similar success in Korea.  Seattle’s Best Coffee, Caribou Coffee, and any number of U.S. coffee houses with aspirations for the Korean market will have a difficult time stealing market share away from Starbucks or The Coffee Bean.
 
Note to AngelineTay:  Why did I dress as Santa Claus?  Well, for one, we had a Santa suit available at work, and I thought it would be fun for the kids if I dressed up as Santa.  Secondly, even though it was a Christmas Party, it isn’t truly a Christmas celebration.  It was a company party with Christmas trappings.  We’re saving our Christmas celebration for Sunday, December 25.  (We did pray before the meal, though.)  Thirdly, in all honesty, and by no means meant to be tongue-in-cheek, I would make a terrible Baby Jesus.  I’m much closer in appearance to Santa than I am to Baby Jesus.  Maybe I could have been a Wise Man, but then I’d either have had to find two other Wise Men or be all three at once (in 2001, I bought my wife gold, frankincense, and myrrh for Christmas during our trip to Egypt).
 
I am all too aware of how commercialized Christmas has become, centered around Santa Claus and gift giving.  Once upon a time, the legend of Santa Claus grew out of the story of St. Nicholas, a monk who lived during the Third Century A.D. in modern-day Turkey, whose benevolence was a manifest of his Christian faith (the name Santa Claus is derived from Sinter Klaas, the Dutch name for St. Nicholas).  Few people remember that December 6, the day of his death, is the day when St. Nicholas is traditionally honored.  Perhaps it would be better if Santa Claus and all the commercialization that goes with him moved to December 6 instead of December 25. 
 
I wonder sometimes too whether Christ’s birth should be celebrated in the spring (circa April), when Jesus was more likely to have been born given the approximate date of the Roman Census that brought Mary and Joseph travel to Bethlehem when Mary was full term.

GoAOLgle?

In September, I criticized Microsoft’s MSN for pursuing an investment in America Online (AOL), a division of Time Warner.  I argued that AOL is a fading brand that adds little to MSN and that Microsoft would be better off investing the money it would have spent on AOL into research and development in order to improve MSN Search.  I also mentioned the market buzz that Google could also be a potential suitor.  Now that Google appears to be the likely winner of the AOL sweepstakes, should I come down hard on Google for investing in AOL?
 
Yes and no.  First of all, I reiterate that it is preferable that Microsoft not invest in AOL.  It is a strategy Microsoft has tried before with modest success.  Rather than disbursing the $1 billion saved in a shareholder’s dividend, Microsoft needs to capitalize on the moment to improve its homegrown search engine.  It also needs to focus on building its own brand rather than add AOL to its roster.  Google’s share of the search market continues to grow unabated, as evidenced by its ever-climbing stock price ($430.15 per share as of Friday’s close).  MSN Search faces a difficult battle in the search arena even without worrying about linking MSN and AOL.
 
When one considers the fact that AOL’s share of Google’s revenues shrunk from 12% in 2004 to about 8% in 2005, spending $1 billion to retain AOL as one of its primary customers does not make much sense for Google.  Google has about $7 billion in excess cash to spend, and spending 1/7th of this horde on AOL makes less sense than spending it on adding new services or extending its market reach.  However, when faced with the prospect of losing one of its primary customers to one of its main rivals, MSN, it makes sense for Google to invest in AOL.  As a defensive measure, it makes more sense because Google is still very reliant on generating revenues from search.  Losing 8% of its revenues would be disastrous to its share price in the short term.  In contrast, MSN and Microsoft are far less reliant on search.  Google also gains further access to Time Warner’s media content, and it can marry its beta Google Talk instant messaging program with AOL’s popular Instant Messenger.  For a younger, smaller company such as Google, these moves are more valuable than they are to a large, cash-rich company such as Microsoft. 
 
Would Google’s money be better spent elsewhere?  Of course.  It seems as if each week Google announces a new beta program or feature in an effort to become the nerve center of the Internet.  $1 billion would be enough to develop one or two new, potentially lucrative Google products.  Still, in light of manuevering by Microsoft and other technology companies to divert one of Google’s revenue streams, Google had little choice but to invest in AOL.  I only hope that the Google-AOL combination, which I affectionately call "GoAOLgle," won’t distract Google from building on its search capabilities.