Since MegaStudy started e-learning business for Korean high school students, the Korean e-learning industry began to expand and steadily gain attention. This paper focused on the analysis of the development of the Korean e-learning business for teens and the growth of MegaStudy. The three institutional mechanisms were used to examine the factors that aided the development of the business. The regulatory mechanism was the government policy to prevent the expansion of the offline private education sector, which greatly aided the growth of the e-learning business. The mimetic mechanism was the notion to mimic the characteristics of the Korean e-business initiatives. The normative mechanism involved the widespread social norm suggesting that every student should be given an equal opportunity of private education. This paper also examined the case of MegaStudy as a successful case of the e-learning companies. It analyzed the business model of MegaStudy, which is based on its advantage as the front-runner and its high-quality contents and services.