David Eun Leads Samsung's Silicon Valley Invasion

Korean American media executive David Eun will be spearheading Samsung’s push to incubate innovative media and software startups in Apple’s backyard, according to a report Monday in the tech business news site AllThingsD.

Samsung is about to sign a deal on office space for its own startup accelerator in Palo Alto, just a few miles north of Apple’s Cupertino headquarters. In September it had announced plans to build two six-story buildings on an 8.5-acre campus in Mountain View to house its US research and development center.

The new incubator will be used to help Samsung become more intimately connected with the software and new media innovations that will ultimately shape the mobile computing and consumer electronics industries.

Samsung’s commitment to integrating itself into the Silicon Valley ecosystem is also evidenced by the memorandum of understanding it signed in August with the state of California to boost its R&D investments in exchange for federal tax exemptions and employee training programs.

David Eun, who had been serving as executive vice president of Samsung’s global media group last December last year, has been picked to boost Samsung’s software capabilities in areas like smart TVs and home appliances. The move to turn itself into a leader in software innovation is seen as being critical to Samsung’s prospects for keeping its lead as the world’s leading producer of smartphones and TVs, as well as computer memory chips. Without growing that side of its business, Samsung is likely to stay a step behind Apple and Google, analysts argue.

While Apple and Google have built up their own software ecosystems with iOS and Android, Samsung has only recently entered the software arena with Bada, an operating system that has only a 3% global market share — a small fraction of its estimated 35% global share in mobile phones.

“The mobile revolution is evolving from smart TVs to cloud systems and big data,” said Song Jong-ho, an analyst with Daewoo Securities. “Competitiveness in software development is a prerequisite for Samsung to achieve this.”

Eun’s Silicon Valley experience, as well as his Korean American background, makes him an ideal executive to ease a Korean conglomerate into the dynamic, ever-shifting landscape of new media innovation.

Eun graduated magna cum laude in government from Harvard University before earning his JD from Harvard Law School. He began his career as a management consultant at Bain & Co. He entered the media business at NBC where he led merchandising efforts involving TV shows and the internet. That was followed by a stint managing content licensing for Time Warner before he came to the Silicon Valley to head up content partnerships for Google.

He had been unhappy at Google, having been forced to focus his energies on making deals for YouTube — which Google had acquired for $1.65 billion despite Eun’s opposition. He had felt the site was likely to be more trouble than it was worth due to the many copyright issues implicated by the very nature of YouTube’s video-sharing culture.

Eun was gladly hired away by AOL who charged him with overseeing and expanding AOL’s content operations to 100 websites while starting up multimedia production. By most measures, Eun did well at AOL. During his year there AOL search revenues jumped 36% after slipping 24% the year before. AOL video views jumped 62% while the industry slumped as a whole.

Perhaps to call attention to his success with AOL’s video offerings in January, just before he was fired Eun ditched his usual low-profile style to star in an all-hands internal video memo in which he popped and techno-rapped a cheerleading message to the beat of the Taio Cruz dance tune Dynamite.

Eun had been at AOL less than a year when he was fired to make room at the top of its new media hierarchy for Arianna Huffington, founder of Huffington Post which was acquired by AOL in November 2011 for $315 million AOL CEO Tim Armstrong.

Eun’s departure had been welcomed by many AOL staffers who had griped that he had lacked the vision to transform the company’s content offerings into positions of industry leadership. But at Samsung Eun has both a portfolio to innovate and the ears of the executives who head up the world’s leading creator of digital platforms.

“Samsung hasn’t had to do lots of acquisitions historically because of its scale and share of talent,” Eun said of Samsung’s recent efforts at moving into Silicon Valley. “But acquiring other companies is a way for us to accelerate our entry into the content services space.”

A major Samsung advantage over Apple is its embrace of a more open ecosystem thanks to its alliance with Google and its Android OS, Microsoft and its Windows 8 and Intel and its Tizen HTML 5-based platform for apps.

The other huge Samsung advantage — perhaps the biggest of all ultimately — is that it is the world’s leading producer of digital devices.

“One the things that has blown me away about the opportunity is that Samsung creates more devices — and so we have more touch points with consumers — than virtually any other company on the planet,” said Eun.

Beyond smartphones, tablets and TVs, Samsung has the ability to integrate the other products it makes like refrigerators and even windows.

“We already have windows that are also displays and they have virtual shades,” said Eun. “There is a world, and it is not far away, where the mirror above the sink in the bathroom is a display and is connected to all the other devices that we make.”

One of Eun’s major objectives is have Samsung’s TVs evolve into devices that can be as easily updated as the operating systems of PCs and smartphones. Toward that end Samsung is creating an “evolution kit” for existing TVs to shift them over to the kind of replacement cycle typical of smart phones, laptops and tablets. Its TVs are also becoming increasingly modular.

If the future will come about through complete integration of all devices, a company like Samsung which produces the hardware is as well situated as a software company that must seek to have its software installed on hardware made by others.

“Regardless of where you start now – on the content or on the hardware side – you need to understand both,” said Eun. “There is no silver bullet but there are important paths to pursue and that’s what we are doing.”