Tencent

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Tencent Holdings Limited
Native name 腾讯控股有限公司
Type Public
Traded as SEHK700
Industry Internet
Founded November 12, 1998
Founders Ma Huateng
Zhang Zhidong
Headquarters Shenzhen, Guangdong, China
Area served Worldwide (mainly Greater China)
Key people Ma Huateng
(Chairman & CEO)
Products Social networks, mass media, web portals, e-commerce, web browser, Antivirus software and multiplayer online games
Services Online services
Revenue Increase CN¥60.49 billion (2013)1
Operating income Increase CN¥19.2 billion (2013)1
Net income Increase CN¥15.6 billion (2013)1
Total assets Increase CN¥107.2 billion (2013)1
Total equity Increase CN¥48.5 billion (2013)1
Owners Naspers (35%)
Employees 26,962 (Dec 2013)2
Subsidiaries Riot Games, Epic Games
Website tencent.com

Tencent Holdings Limited (Chinese: 腾讯控股有限公司; SEHK700) is a Chinese investment holding company whose subsidiaries provide mass media, entertainment, Internet and mobile phone value-added services, and operate online advertising services in China.3 Its headquarters are in Nanshan District, Shenzhen.

Tencent's many services include social network, web portals, e-commerce, and multiplayer online games.4 Its offerings include the well-known (in China) instant messenger Tencent QQ56 and one of the largest web portals in China, QQ.com.7 Mobile chat service WeChat has helped bolster Tencent's continued expansion into smartphone services.

It is the fifth-largest Internet company in the world after Google, Amazon, Alibaba, and Ebay as of October 2014.8 In 2012, Tencent's revenue outstripped Facebook's by over $2 billion.910 In September 2013, Tencent's market valuation rose to US$101 billion, nine years after going public.1112

As March 12, 2014, the market value of Tencent is about 1.041 trillion yuan (US$150 billion).13

History

Tencent was founded by Ma Huateng and Zhang Zhidong in November 199814 as Tencent Inc.15 Incorporated in the Cayman Islands,16 initial funding was provided to it by venture capitalists.3 The company remained unprofitable for the first three years.14

South African media company Naspers purchased a 46% share of Tencent in 2001. (As of 2014, it owns 34%.17) During these early years Tencent's iconic messenger product had its name changed from OICQ to QQ; this was said to be due to a (apocryphalcitation needed) lawsuit from ICQ itself.14 Others say the American Internet company AOL, not ICQ, requested the name change.18 Tencent Holding Ltd was listed on the Hong Kong Stock Exchange on 16 June 2004,15 and it was added as a Hang Seng Index Constituent Stock in 2008.19

The company originally derived income solely from advertising and premium users of QQ, who pay monthly fees to receive added extras.14 But by 2005, charging for use of QQ mobile, its cellular value-added service, and licensing its iconic penguin character, which can be found on snack food20 and clothing,14 had also become income generators.14 And c. 2008 Tencent was seeing profit growth from the sale of virtual goods.21

While Tencent's services have included online gaming since 2004, around 2007-2008 it rapidly increased its offerings by licensing games.22 While least two, CrossFire and Dungeon and Fighter, were originally produced by South Korean game developers, \Tencent now makes its own games.22

Recently, Tencent partnered with Apple and Twitter to provide enterprise cloud services, as well as IBM to provide SaaS services to SME's. 23

Virtual goods

Tencent sells virtual goods24 for use in their MMOs,25 IM client, social networking sites,26 and for mobile phones.27 Income from the sale of virtual goods was a large proportion of Tencent's revenue in 2009.7

Tencent's online currency, Q Coins, can be used to purchase virtual goods.28 These range from the offbeat, such as virtual pets29 and the virtual clothing, jewelry, and cosmetics needed to customize online-game avatars,30 to the more mundane, such as more storage space, wallpapers, bigger photo albums,26 and ring tones.27

Locations

Tencent's headquarters are located in the Southern Hi-Tech Park District (新科技园 xīnkējìyuán) in Nanshan District, Shenzhen.3132 Other sites include a 48,000 square meter compound that houses an R&D center in the Chengdu Hi-Tech Industrial Development Zone,33 a data and R&D center in Tianjin's Binhai Service Outsourcing Industry Park that is expected to be finished by June 2013,34 and also some 17,646 square meters of Shanghai office space purchased through a subsidiary, Tencent Cyber (Tianjin), and located in the Shanghai Modern Technology Services Community Zone.35

The above list of locations is not exhaustive.

Products and services

Tencent offers a diverse mix of services and counts both consumers and businesses as customers.

QQ instant messenger

Main article: Tencent QQ

Launched in February 1999,31 and Tencent's most notable product,56 QQ is one of the most popular instant messaging platforms in its home market.2836 As of December 31, 2010, there were 647.6 million active Tencent QQ IM user accounts,1 making Tencent QQ the world's largest online community at the time. The number of QQ accounts simultaneously online has sometimes exceeded 100 million.37

While the IM service is free, as of 2006 a fee was being charged for mobile messaging.38

QQ International

An English version of QQ that allows communication with mainland accounts, QQi is available for Windows and Mac OSX.39

iTQQ

China's first "smart interactive television service" and a joint effort with TCL.28

Multiplayer online games

Tencent used to offer a number of online, multiplayer games through its game portal QQ Games.

These massively multiplayer online games include Dungeon & Fighter, a side-scrolling online fighting game; QQ Fantasy, a 2D online game that incorporates elements from Chinese mythology; Xunxian, a 3D, online RPG; QQ Three Kingdoms, an online casual role playing game set during the historical three kingdoms period; QQ Huaxia, an online RPG; QQ Dancer, an online musical dancing game that offers QQ IM interactivity; QQ Nanaimo, an online game set on a desert island where players maintain houses and pets; QQ Speed, a casual online racing game; QQ R2Beat, an online in-line skating game; QQ Tang, an "advanced casual game" with gameplay derived from Chinese literature; QQ PET, a QQ IM-based desktop virtual pet game and two online first-person shooters; CrossFire and AVA.40

Music distribution

Tencent established in 2014 exclusive in-China distribution agreements with several large music producers, including Sony, Warner Music Group and YG Entertainment.41

PaiPai.com

Launched on March 13, 2006,42 it is a C2C auction site.28

Dididache Taxi

Dididache (嘀嘀打车), which in Mandarin means “Honk Honk, Catch a Cab”, is a smartphone application which matches passengers and willing taxi drivers who are situated in close proximity. For passengers, a list of nearby taxicabs is created via GPS, and a signal is sent out indicating an expression of interest. Conversely, for taxi drivers with the app installed on their phones, the GPS system quickly lists and localizes nearby potential clients; and once a match is created, the taxi can efficiently pick up awaiting passengers.43

Dididache is a dominant player in China's taxi-hailing arena, with a market share exceeding 60% and service extending to 32 cities including the Tier-1 conurbations of Beijing, Shanghai, Guangzhou, and Shenzhen. Dididache in 2014 has 40 million registered users, a doubling from 2013's user base; and every month, more than 21 million cab rides are booked through the service, or 700,000 bookings per day. Additionally, from the taxicab perspective, Dididache already has an extensive user base of taxi drivers of more than 350,000 vehicles across China most of which are BYD Auto.43

QQLive

Main article: QQLive

A peer-to-peer distribution platform for streaming media.44

QQ Show

An avatar-based social platform like Cyworld,7 QQ Show allows purchase of virtual goods to outfit avatars, which can also be used with QQ IM.45

QQ Player

In 2008, Tencent released a media player, available for free download, under the name QQ Player.46

Qzone

Main article: Qzone

A social networking service6 and, as of 2008, one of the largest in China.16

SOSO

Main article: Soso.com

Launched in March 2006,47 this search engine's name sounds like "搜搜", or "search search" in Chinese.48 It was a Chinese partner of Google, using AdWords.49

Tencent Traveler

Abbreviated "TT" (TencentTraveler), this web browser developed by Tencent50 is based on the Trident51 and was the third most-used browser in China c. 2008.51

Tencent Weibo

Main article: Tencent Weibo

A Chinese microblogging service, Tencent Weibo competes with Sina Weibo.

Tencent Weiyun

A cloud storage service that offers 10 TB of free storage.52 It is available in English and Chinese.

TenPay

An online payment system similar to PayPal,28 it supports B2B, B2C, and C2C payments.42 In some Chinese cities individuals can use TenPay for utility payments and to refill their public transport cards.53 Co-branded credit cards are available, and credit card bills can also be paid using the service.54 Offline recharging of your TenPay account is possible, as the company sends employees to collect customer money in person.55

Tencent is going to be launching a financial products platform on WeChat in partnership with one of China's largest asset management companies ChinaAMC. The platform will leverage the TenPay payment service.56

WeChat

Main article: WeChat

WeChat57 is a social mobile application with voice and text messaging, timeline,58 and several social features like drift a bottle. It is very popular in China and is likely to expand abroad.59

On July 3, Tencent plans to launch a new mobile gaming platform that will include the first ever games on WeChat.60

WeChat has become the most popular app in China.

Subsidiaries

Tencent has at least four wholly foreign owned enterprises and nearly twenty subsidiaries in all.16

Epic Games

Tencent acquired a minority stake in Epic Games, developer of franchises like Unreal, Gears of War and Infinity Blade, in June 2012.61

Riot Games

On 18 February 2011, Tencent acquired a majority equity interest in Riot Games, developer of League of Legends, for about USD 230 million. Tencent had already 22.34% of the equity interest out of a previous investment in 2008. The Tencent group now owns 92.78% equity interest of Riot Games.62

Tencent Technology (Shenzhen) Co Ltd

A software development unit that has created, among others, Tencent Traveler and later versions of QQ IM,63 as well as some mobile software.64 This subsidiary is located at the Southern District of Hi-Tech Park, Shenzhen.63 It also holds a number of patents related to instant messaging and massively multiplayer online game gaming.65

Copying claims

Many of Tencent's software and services are remarkably similar to those of competitors. The founder and chairman, Huateng "Pony Ma" Ma, famously said, "[To] copy is not evil." A former CEO and President of SINA.com, Wang Zhidong, said, "Pony Ma is a notorious king of copying." Jack Ma of Alibaba Group stated, "the problem in Tencent is no innovation; all things are copies."66

As of 2009, the company held 400 patents.67

Investments

Tencent recently increased its stake in Kingsoft Network Technology, a subsidiary of Kingsoft Corporation, to 18%. Tencent previously had a 15.68% stake in the company and raised the stake through a USD 46.98 million investment.68

It has been rumored that Tencent might acquire a stake in Ctrip, but according to high level executives at both firms, the rumor is unfounded.69

Tencent took part in Activision Blizzard splitting from Vivendi as a passive investor and owns now about 12% of the shares.70

On September 17, 2013, it was announced that Tencent has invested $448 million for a minority share in Chinese search engine Sogou.com, the subsidiary of Sohu, Inc.71

On January 15, 2014, Tencent said it will invest HK$1.5 billion ($193.45 million) in logistics and warehouse firm China South City Holdings Ltd to develop its e-commerce and logistics business.72

On February 27, 2014, Tencent purchased a 20-percent stake in restaurant ratings and group buying website Dianping for $400 million.73

On March 10, 2014, Tencent bought a 15 percent stake in Chinese e-commerce website JD.com Inc. by paying cash and handing over its e-commerce businesses Paipai, QQ Wanggou and a stake in Yixun to JD.com to build a stronger competitor to Alibaba Group Holding Ltd.74 On May 22, 2014, JD.com got listed on NASDAQ and Tencent expanded its stake in the company to 17.43% on a fully diluted basis by investing an additional US$1,325 million.75

On March 27, 2014, it was announced that Tencent has agreed to pay about $500 million for a 28 percent stake in South Korea’s CJ Games.76

On June 27, 2014, Tencent announced that it has agreed to buy a 19.9 percent stake in Chinese e-commerce website 58.com (WUBA) Inc. for $736 million.77

On October 16, 2014, and via its wholly held subsidiary Hongze Lake Investment Ltd, Tencent announced that it has bought a 7% stake in lottery technology firm China LotSynergy Holdings Ltd for HKD445.5 million (US$57.4 million).78

On October 23, 2014, Tencent pitched in $145 million for a 10 percent stake in Koudai Gouwu, a Chinese mobile shopping portal. 79

See also


References

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  19. ^ HANG SENG INDEXES ANNOUNCES INDEX REVIEW RESULTS
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  35. ^ DI SCLOSEABLE TRANSACTI ON PURCHASE OF PROPERTY 1 5 Ma y 2 0 0 8
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  47. ^ Products and Services > Online Media Tencent Official Site
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  55. ^ Knock, Knock: TenPay To Offer Door-To-Door Recharging Service J:M Pacific Epoch, Nov 14, 2008
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External links


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