360 v. Tencent

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360 v. Tencent is a dispute between two Chinese IT companies, Tencent and Qihoo, over competition practices that has escalated in November 2010,[1] and hundreds of millions of users were forced to choose sides in the dispute.[2]

Qihoo, the producer of 360 Safeguard, is under direct threat from QQ Doctor, which gained 40% of the Chinese market overnight when it bundled with Tencent QQ. On September 27, Qihoo released a privacy guard software that shows QQ's suspicious spying activities on its users. Tencent responded with a fabricated report alleging Qihoo was under investigation for ads involving pornographic web sites, as well as rallying support from Qihoo's competitor in the anti-virus front like Kingsoft, Kaspersky Lab and Rising.[1]

Later Qihoo alleges that QQ scans the installed programs in user's computer based on a "super black list", and continues with personal attacks on Ma Huateng, Tencent's billionaire CEO who has been receiving government subsidies for housing. Qihoo also updated the privacy guard to block ads in QQ,[3] to Tencent's furious objections including an unfair competition lawsuit and later an update that blocks itself from running on machines with 360 Safeguard installed. Hundreds of millions of Chinese netizens are forced to choose side, either to uninstall QQ or 360's privacy guard[4]

Reactions[edit]

Yu Fei, CEO of Langezhiyang International Sales Consultant Principal, speculates that the dispute is resulted from poor competitive strategy.[1]

In a poll conducted by Sina, 1.06 million users, or 79% of the participants, agree that the two companies "care more about their business interests than about their users."[5]

Kingsoft and Kaspersky made their security services free for one year shortly after the dispute escalated.[5]

On November 4, 2010, the day after Tencent stopped messaging service on computers with 360 installed, TencentHolding (SEHK0700) lost 10.6 billion HKD, or 3.1% in market capitalization, including 1.1 billion HKD for Tencent CEO Ma Huateng. Kingsoft (SEHK03888) jumped 17.86% and gained 784 million HKD in market cap. Another instant messaging software producer Beijing Shenzhou Taiyue Software Corp., Ltd (Shenzhou Taiyue) (SZSE: 300002) increased by 3.7%.[6]

Maybe Microsoft's MSN is the winner. It is agreeing to integrate their products with Sina "in areas including microblogging, blogging, instant messaging, information content and mobile services." [7] [8]

On 10 Nov 2010, 360 Qihoo says they are going to resume their product's compatibility with QQ. [9]

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