Tencent

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Tencent Holdings Limited
Native name
腾讯控股有限公司
Public
Traded as SEHK700
Industry Internet
Founded November 12, 1998
Founder 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¥78.932 billion (2014)[1]
Increase CN¥30.542 billion (2014)[1]
Increase CN¥23.888 billion (2014)[1]
Total assets Increase CN¥171.166 billion (2014)[1]
Total equity Increase CN¥82.124 billion (2014)[1]
Owner Naspers (35%)
Number of employees
26,962 (Dec 2013)[2]
Subsidiaries Riot Games, Epic Games
Website tencent.com
Tencent Holdings Limited
Simplified Chinese 腾讯控股有限公司
Traditional Chinese 騰訊控股有限公司

Tencent Holdings Limited (Chinese: 腾讯控股有限公司; SEHK700) is a Chinese investment holding company whose subsidiaries provide 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 QQ and one of the largest web portals in China, QQ.com.[5] Mobile chat service WeChat has helped bolster Tencent's continued expansion into smartphone services.

It is one of the largest Internet companies in the world and competes with Amazon, Google, Ebay, Facebook and Alibaba.

In April 13, 2015, the market value of Tencent exceeded US$200 billion for the first time, hitting US$206 billion.[6]

History[edit]

Tencent was founded by Ma Huateng and Zhang Zhidong in November 1998[7] as Tencent Inc.[8] Incorporated in the Cayman Islands,[9] initial funding was provided to it by venture capitalists.[3] The company remained unprofitable for the first three years.[7]

South African media company Naspers purchased a 46% share of Tencent in 2001. (As of 2014, it owns 34%.[10]) 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 (apocryphal[citation needed]) lawsuit from ICQ itself.[7] Others say the American Internet company AOL, not ICQ, requested the name change.[11] Tencent Holding Ltd was listed on the Hong Kong Stock Exchange on 16 June 2004,[8] and it was added as a Hang Seng Index Constituent Stock in 2008.[12]

The company originally derived income solely from advertising and premium users of QQ, who pay monthly fees to receive added extras.[7] 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 food[13] and clothing,[7] had also become income generators.[7] And c. 2008 Tencent was seeing profit growth from the sale of virtual goods.[14]

While Tencent's services have included online gaming since 2004, around 2007-2008 it rapidly increased its offerings by licensing games.[15] While least two, CrossFire and Dungeon and Fighter, were originally produced by South Korean game developers, Tencent now makes its own games.[15]

Recently, Tencent partnered with Apple and Twitter to provide enterprise cloud services, as well as IBM to provide SaaS services to SME's.[16]

Virtual goods[edit]

Tencent sells virtual goods[17] for use in their MMOs,[18] IM client, social networking sites,[19] and for mobile phones.[20] Income from the sale of virtual goods was a large proportion of Tencent's revenue in 2009.[5]

Tencent's online currency, Q Coins, can be used to purchase virtual goods.[21] These range from the offbeat, such as virtual pets[22] and the virtual clothing, jewelry, and cosmetics needed to customize online-game avatars,[23] to the more mundane, such as more storage space, wallpapers, bigger photo albums,[19] and ring tones.[20]

Locations[edit]

Tencent's headquarters are located in the Southern Hi-Tech Park District (新科技园 xīnkējìyuán) in Nanshan District, Shenzhen.[24][25] Other sites include a 48,000 square meter compound that houses an R&D center in the Chengdu Hi-Tech Industrial Development Zone,[26] a data and R&D center in Tianjin's Binhai Service Outsourcing Industry Park that is expected to be finished by June 2013,[27] 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.[28]

The above list of locations is not exhaustive.

Products and services[edit]

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

QQ instant messenger[edit]

Main article: Tencent QQ

Launched in February 1999,[24] and Tencent's most notable product, QQ is one of the most popular instant messaging platforms in its home market.[21][29] 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.[30]

While the IM service is free, as of 2006 a fee was being charged for mobile messaging.[31]

QQ International[edit]

An English version of QQ that allows communication with mainland accounts, QQi is available for Windows and Mac OSX.[32]

iTQQ[edit]

China's first "smart interactive television service" and a joint effort with TCL.[21]

Multiplayer online games[edit]

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 three online first-person shooters; War of Zombie, CrossFire and AVA.[33]

Music distribution[edit]

Tencent established in 2014 exclusive in-China distribution agreements with several large music producers, including Sony, Warner Music Group and YG Entertainment.[34]

PaiPai.com[edit]

Launched on March 13, 2006,[35] it is a C2C auction site.[21]

Dididache Taxi[edit]

Main article: Didi Dache

Dididache (滴滴打车), 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.[36]

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.[36]

QQLive[edit]

Main article: QQLive

A peer-to-peer distribution platform for streaming media.[37]

QQ Show[edit]

An avatar-based social platform like Cyworld,[5] QQ Show allows purchase of virtual goods to outfit avatars, which can also be used with QQ IM.[38]

QQ Player[edit]

In 2008, Tencent released a media player, available for free download, under the name QQ Player.[39]

Qzone[edit]

Main article: Qzone

A social networking service and, as of 2008, one of the largest in China.[9]

SOSO[edit]

Main article: Soso.com

Launched in March 2006,[40] this search engine's name sounds like "搜搜", or "search search" in Chinese.[41] It was a Chinese partner of Google, using AdWords.[42]

Tencent Traveler[edit]

Abbreviated "TT" (TencentTraveler), this web browser developed by Tencent[43] is based on Trident[44] and was the third most-used browser in China c. 2008.[44]

Tencent Weibo[edit]

Main article: Tencent Weibo

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

Tencent Weiyun[edit]

A cloud storage service that offers 1 TB of free storage.[45] It is available in English and Chinese. The 10 TB free offer is now gone from their website and it is back to 1TB free.

TenPay[edit]

An online payment system similar to PayPal,[21] it supports B2B, B2C, and C2C payments.[35] In some Chinese cities individuals can use TenPay for utility payments and to refill their public transport cards.[46] Co-branded credit cards are available, and credit card bills can also be paid using the service.[47] Offline recharging of your TenPay account is possible, as the company sends employees to collect customer money in person.[48]

WeChat[edit]

Main article: WeChat

WeChat[49] is a social mobile application with voice and text messaging, timeline,[50] and several social features like drift a bottle. It is very popular in China and is likely to expand abroad.[51]

WeChat has become the most popular app in China.

Subsidiaries and significant investments[edit]

Tencent has at least four wholly foreign owned enterprises and nearly twenty subsidiaries in all.[9]

Epic Games[edit]

Tencent acquired a minority stake in Epic Games, developer of franchises like Unreal, Gears of War and Infinity Blade, in June 2012.[52]

Riot Games[edit]

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.[53]

GLU mobile[edit]

On April 29, 2015 Tencent acquired a minority stake in GLU mobile paying 126 million for 14.6 percent of the company.[54]

Pocket Gems[edit]

On May 13, 2015, Tencent acquired a minority stake in mobile developer Pocket Gems. Acquiring 20 percent of the company for the price of 60 million dollar [55]

Tencent Technology (Shenzhen) Co Ltd[edit]

A software development unit that has created, among others, Tencent Traveler and later versions of QQ IM,[56] as well as some mobile software.[57] This subsidiary is located at the Southern District of Hi-Tech Park, Shenzhen.[56] It also holds a number of patents related to instant messaging and massively multiplayer online game gaming.[58]

Impropriety[edit]

Copying claims[edit]

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."[59]

As of 2009, the company held 400 patents.[60]

Antimalware software cheating allegations[edit]

In 2015, security testing firms AV-Comparatives, AV-TEST and Virus Bulletin jointly decided to strip Tencent of its certifications and rankings from their antimalware software lists. The Tencent products supplied for testing were found to contain optimizations to artificially boost results by skipping white-listed test files, in turn providing more scope for delivering exploits.[61] Additionally, software settings were detrimental to end-users protection if used. Qihoo was later also accused of cheating, while Tencent was accused of actively gaming the antimalware tests.[62][63]

Investments[edit]

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.[64]

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.[65]

Tencent took part in Activision Blizzard splitting from Vivendi as a passive investor and owns now about 12% of the shares.[66]

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.[67]

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.[68]

On February 27, 2014, Tencent purchased a 20-percent stake in restaurant ratings and group buying website Dianping for $400 million.[69]

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.[70] 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.[71]

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.[72]

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.[73] On April 17, 2015, Tencent announced it has bought an additional $400 million worth of shares, rising its stake in the company to about 25%.[74]

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).[75]

On October 23, 2014, Tencent pitched in $145 million for a 10 percent stake in Koudai Gouwu, a Chinese mobile shopping portal.[76]

On December 9, 2014, Chinese taxi-hailing app Didi Dache announced that it has raised more than $700 million in funding round lead by Tencent and Singaporean state investment firm Temasek Holdings.[77]

On January 30, 2015, Tencent announced that it has signed a $700 million deal with the National Basketball Association to stream American basketball games in China.[78]

See also[edit]

References[edit]

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  2. ^ "Tencent Holdings listed". Google Finance. 
  3. ^ a b Biographical Dictionary of New Chinese Entrepreneurs and Business Leaders, Pg. 111-112 Ilan Alon and Wenxian Zhang. Edward Elgar Publishing, 2009. Google Book Search.
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  5. ^ a b c For Chinese IM Portal Tencent, The Money Is In Micro-Transactions techcrunch.com, March 27, 2008
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  7. ^ a b c d e f Investing in China: The Emerging Venture Capital Industry Jonsson Yinya Li, Google Book Search
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  9. ^ a b c 2008 Annual Report Tencent Official Site
  10. ^ Tencent 腾讯 Naspers
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  12. ^ HANG SENG INDEXES ANNOUNCES INDEX REVIEW RESULTS
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  18. ^ TenCent Reaches New Heights in Virtual Goods Sales insidesocialgames.com, March 31st, 2009
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  27. ^ Tencent's Tianjin R&D Center Ready in 2013 JLM Pacific Epoch, Mar 13, 2009
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  39. ^ Tencent releases QQ Player
  40. ^ Products and Services > Online Media Tencent Official Site
  41. ^ Tencent to Build 3000-person Search Army to Power Search Engine cnreviews.com, 14 APR 2008
  42. ^ What Valley Companies Should Know about Tencent techcrunch.com, Jun 20, 2010
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  44. ^ a b Mozilla Takes on Microsoft in China businessweek.com, January 11, 2008, 7:21AM EST
  45. ^ Tencent Weiyun Official website.
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  48. ^ Knock, Knock: TenPay To Offer Door-To-Door Recharging Service J:M Pacific Epoch, Nov 14, 2008
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  65. ^ Hsu, Alex (10 Jul 2013). "Executives at Ctrip and Tencent Deny Acquisition Rumors". http://bw-original-reporting.tumblr.com/post/55082203247/executives-at-ctrip-and-tencent-deny-acquisition-rumors. 
  66. ^ Activision buys itself back from Vivendi for $8 billion joystiq.com, Retrieved 2014-02-28.
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  68. ^ http://www.reuters.com/article/2014/01/15/tencent-chinasouthcity-idUSB9N0K200Q20140115
  69. ^ http://www.iresearchchina.com/views/5493.html
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  71. ^ Tencent Interim Report 2014 Tencent Official Site, Retrieved 2014-10-23.
  72. ^ http://www.bloomberg.com/news/2014-03-26/tencent-to-pay-500-million-for-stake-in-cj-games.html
  73. ^ http://www.bloomberg.com/news/2014-06-27/tencent-buys-20-of-china-s-58-com-for-736-million.html
  74. ^ http://www.bloomberg.com/news/articles/2015-04-17/58-com-to-buy-43-of-china-rival-ganji-as-tencent-raises-stake
  75. ^ http://www.ggrasia.com/tencent-unit-buys-into-lottery-provider-china-lotsynergy/
  76. ^ https://www.techinasia.com/chinese-mobile-shopping-app-secures-350m-led-tencent-pose-biggest-threat-alibaba/
  77. ^ http://blogs.wsj.com/digits/2014/12/09/chinese-taxi-hailing-app-didi-raises-over-700m-led-by-temasek/
  78. ^ http://www.bloomberg.com/news/articles/2015-01-30/nba-expands-china-business-with-five-year-tencent-extension

External links[edit]