Tencent

Tencent Holdings Limited
Native name
 腾讯控股有限公司
Public
Traded as SEHK: 700
Industry Internet
Founded November 12, 1998 (1998-11-12)
Founder Ma Huateng
Zhang Zhidong
Headquarters Shenzhen, Guangdong, China
Area served
 Worldwide (mainly Greater China)
Key people
 Ma Huateng
(Chairman & CEO) Martin Lau
(president)
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 (48.4%)
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; pinyin: Téngxùn Kònggǔ Yǒuxiàn Gōngsī; literally: "Soaring information"; SEHK: 700) 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. Tencent holds 15% stake of JD.com, which 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] On September 8, 2015, Tencent became the largest Internet company in Asia by value after Alibaba Group Holding Limited suffered a major drop ($141 Billion over 10 months) in its share value.[7]

History

Tencent was founded by Ma Huateng and Zhang Zhidong in November 1998[8] as Tencent Inc.[9] Incorporated in the Cayman Islands,[10] initial funding was provided to it by venture capitalists.[3] The company remained unprofitable for the first three years.[8] South African media company Naspers purchased a 46% share of Tencent in 2001. (As of 2014, it owns 34%.[11]) 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) lawsuit from ICQ itself.[8] Others say the American Internet company AOL, not ICQ, requested the name change.[12] Tencent Holding Ltd was listed on the Hong Kong Stock Exchange on 16 June 2004,[9] and it was added as a Hang Seng Index Constituent Stock in 2008.[13] The company originally derived income solely from advertising and premium users of QQ, who pay monthly fees to receive added extras.[8] 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[14] and clothing,[8] had also become income generators.[8] And c. 2008 Tencent was seeing profit growth from the sale of virtual goods.[15] While Tencent's services have included online gaming since 2004, around 2007-2008 it rapidly increased its offerings by licensing games.[16] While least two, CrossFire and Dungeon and Fighter, were originally produced by South Korean game developers, Tencent now makes its own games.[16] Recently, Tencent partnered with Apple and Twitter to provide enterprise cloud services, as well as IBM to provide SaaS services to SME's.[17]

Game development

Tencent used to be a chat software developer, but with the development of online games, Tencent migrated to making and hosting games.. Tencent's first game was QQ Tang (QQ堂) in 2004. After this, Tencent created QQ YinSu (QQ音速) in 2006, QQ SanGuo(QQ三国) in 2007. Other than these, Tencent has created many other network games. In 2011, Tencent started hosting the game League of Legends.

Virtual goods

Tencent sells virtual goods[18] for use in their MMOs,[19] IM client, social networking sites,[20] and for mobile phones.[21] 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.[22] These range from the offbeat, such as virtual pets[23] and the virtual clothing, jewelry, and cosmetics needed to customize online-game avatars,[24] to the more mundane, such as more storage space, wallpapers, bigger photo albums,[20] and ring tones.[21]

Locations

Tencent's headquarters are located in the Southern Hi-Tech Park District (新科技园 xīnkējìyuán) in Nanshan District, Shenzhen.[25][26] Other sites include a 48,000 square meter compound that houses an R&D center in the Chengdu Hi-Tech Industrial Development Zone,[27] a data and R&D center in Tianjin's Binhai Service Outsourcing Industry Park that is expected to be finished by June 2013,[28] 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.[29]

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,[25] and Tencent's most notable product, QQ is one of the most popular instant messaging platforms in its home market.[22][30] 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 connected simultaneously has, at times, exceeded 100 million.[31]

While the IM service is free, as of 2006 a fee was being charged for mobile messaging.[32]

QQ International

An English version of QQ that allows communication with mainland accounts, QQi is available for Windows and Mac OSX.[33]

iTQQ

China's first "smart interactive television service" and a joint effort with TCL.[22]

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 three online first-person shooters; War of Zombie, CrossFire and AVA.[34]

Music distribution

In 2014, Tencent established exclusive in-China distribution agreements with several large music producers, including Sony, Warner Music Group and YG Entertainment.[35]

PaiPai.com

Launched on March 13, 2006,[36] it is a C2C auction site.[22]

Dididache Taxi

Main article: Didi Dache

Dididache (滴滴打车), which in Mandarin means “Honk Honk, Catch a Cab”, is a smartphone application that 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.[37]

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. In 2014, Dididache had 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, with 700,000 bookings per day. Additionally, from the taxicab perspective, Dididache already has an extensive user base of taxi drivers, with more than 350,000 vehicles across China, most of which are BYD.[37]

QQLive

Main article: QQLive

A peer-to-peer distribution platform for streaming media.[38]

QQ Show

An avatar-based social platform like Cyworld,[5] QQ Show facilitates purchasing virtual goods to outfit avatars, which can also be used with QQ IM.[39]

QQ Player

In 2008, Tencent released a media player, available for free download, under the name QQ Player.[40]

Qzone

Main article: Qzone

A social networking service, which as of 2008 became one of the largest in China.[10]

SOSO

Main article: Soso.com

Launched in March 2006,[41] this search engine's name sounds like "搜搜", or "search search" in Chinese.[42] It was a Chinese partner of Google, using AdWords.[43]

Tencent Traveler

Abbreviated "TT" (TencentTraveler), this web browser developed by Tencent[44] is based on Trident[45] and was the third most-used browser in China c. 2008.[45]

Tencent Weibo

Main article: Tencent Weibo

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

Tencent Weiyun

A cloud storage service that offers 1 TB of free storage.[46] It is available in English and Chinese.

TenPay

An online payment system similar to PayPal, it supports B2B, B2C, and C2C payments.[36] In some Chinese cities individuals can use TenPay for utility payments and to refill their public transport cards.[47] Co-branded credit cards are available, and credit card bills can also be paid using the service.[48] Offline recharging of your TenPay account is possible, as the company sends employees to collect customer money in person.[49]

WeChat

Main article: WeChat

WeChat[50] is a social mobile application with voice and text messaging, timeline,[51] and several social features like drift a bottle. It is the most popular social mobile application in China and is likely to expand abroad in the future.[52]

Subsidiaries and significant investments

Tencent has at least four wholly foreign owned enterprises and nearly twenty subsidiaries.[10]

Epic Games

Tencent acquired a minority stake in Epic Games, developer of franchises like Unreal, Gears of War and Infinity Blade, in June 2012.[53]

Riot Games

On February 18, 2011, Tencent acquired a majority equity interest (92.78%)[54] in Riot Games, developer of League of Legends, for about USD 230 million. Tencent had already held 22.34% of the equity interest out of a previous investment in 2008. On the 16th December 2015, Riot Games sold its remaining equity to Tencent Holdings.[55][56]

GLU mobile

On April 29, 2015 Tencent acquired a minority stake in Glu Mobile, paying USD 126 million for 14.6 percent of the company.[57]

Pocket Gems

On May 13, 2015, Tencent acquired a minority stake in mobile developer Pocket Gems, acquiring 20 percent of the company for the price of USD 60 million.[58]

Tencent Technology (Shenzhen) Co Ltd

A software development unit that has created, among others, Tencent Traveler and later versions of QQ IM,[59] as well as some mobile software.[60] This subsidiary is located at the Southern District of Hi-Tech Park, Shenzhen.[59] It also holds a number of patents related to instant messaging and massively multiplayer online game gaming.[61]

Impropriety

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."[62]

As of 2009, the company holds 400 patents.[63]

Antimalware software cheating allegations

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.[64] 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.[65][66]

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.[67]

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.[68]

Tencent took part in Activision Blizzard splitting from Vivendi as a passive investor and now owns about 12% of the shares.[69]

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.[70]

On January 15, 2014, Tencent said it will invest HKD 1.5 billion (USD 193.45 million) in logistics and warehouse firm China South City Holdings Ltd to develop its e-commerce and logistics business.[71]

On February 27, 2014, Tencent purchased a 20-percent stake in restaurant ratings and group buying website Dianping for $400 million.[72]

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.[73] 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 USD 1,325 million.[74]

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.[75]

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.[76] 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%.[77]

On October 16, 2014, 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 HKD 445.5 million (USD 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]

In November 2014, the company announced a deal with HBO which would give it exclusive rights for distribution in China.[80]

On December 9, 2014, Chinese taxi-hailing app Didi Dache announced that it has raised more than $700 million in a funding round led by Tencent and Singaporean state investment firm Temasek Holdings.[81]

On January 30, 2015, Tencent announced that it has signed a USD 700 million deal with the National Basketball Association to stream American basketball games in China.[82]

See also

References

  1. 1 2 3 4 5 6 "2014 Annual Report" (PDF). Tencent.com. Retrieved 2015-03-18.
  2. ↑ "Tencent Holdings listed". Google Finance.
  3. 1 2 Biographical Dictionary of New Chinese Entrepreneurs and Business Leaders, Pg. 111-112 Ilan Alon and Wenxian Zhang. Edward Elgar Publishing, 2009. Google Book Search.
  4. ↑ Tencent, More Than QQ Instant Messaging In China thechinaobserver.com, undated but posted prior to February 12, 2009
  5. 1 2 3 For Chinese IM Portal Tencent, The Money Is In Micro-Transactions techcrunch.com, March 27, 2008
  6. ↑ "China's Tencent hits $200 billion market cap for first time".
  7. ↑ Chen, Lulu Yilun (8 September 2015). "Alibaba $141 Billion Slide Boosts Tencent to Asia’s Biggest". Bloomberg Business. Retrieved 9 September 2015.
  8. 1 2 3 4 5 6 Investing in China: The Emerging Venture Capital Industry Jonsson Yinya Li, Google Book Search
  9. 1 2 Tencent Tencent official site
  10. 1 2 3 2008 Annual Report Tencent Official Site
  11. ↑ Tencent 腾讯 Naspers
  12. ↑ Bruce Einhorn; Brad Stone (August 4, 2011). "Tencent: March of the Penguins". Businessweek. pp. 4/7. Retrieved 8 Aug 2011.
  13. ↑ "Hang Seng Indexes" (PDF). Retrieved 14 August 2015.
  14. ↑ QQ Games on AIM: Another Penguin Aims for the Casual Market gotgame.com, January 13, 2009
  15. ↑ A Chinese Web Giant's Sizzling Success businessweek.com, November 26, 2008, 9:11AM EST
  16. 1 2 Bruce Einhorn; Brad Stone (August 4, 2011). "Tencent: March of the Penguins". Businessweek. pp. 5/7. Retrieved 8 Aug 2011.
  17. ↑ Tencent & IBM Partner to Deliver SaaS to SMEs in China CloudWedge.com, November 2, 2014
  18. ↑ "Cashing in on virtual goods - Techland".
  19. ↑ TenCent Reaches New Heights in Virtual Goods Sales insidesocialgames.com, March 31st, 2009
  20. 1 2 Tencent Tells its Story at Virtual Goods Summit 3pointd.com, Friday, June 22nd, 2007, at 1:45 pm Eastern
  21. 1 2 Ericsson Mobility World partner profile: Tencent ericsson.com
  22. 1 2 3 4 "Technology". Retrieved 14 August 2015.
  23. ↑ Lucrative Alternatives to Online Advertising businessweek.com, October 23, 2008, 5:00PM EST
  24. ↑ The world's most lucrative social network? China's Tencent beats $1 billion revenue mark venturebeat.com, March 19, 2009
  25. 1 2 Investor Fact Sheet Tencent Official Site
  26. ↑ "Contact Us." Tencent. Retrieved on September 28, 2011. "Tencent Building, Kejizhongyi Avenue, Hi-techPark,Nanshan District,Shenzhen." Address in Chinese: "深圳市南山区高新科技园中区一路腾讯大厦"
  27. ↑ Tencent Opens Chengdu R&D Center JLM Pacific Epoch, Apr 09, 2009
  28. ↑ Tencent's Tianjin R&D Center Ready in 2013 JLM Pacific Epoch, Mar 13, 2009
  29. ↑ DI SCLOSEABLE TRANSACTI ON PURCHASE OF PROPERTY 1 5 Ma y 2 0 0 8
  30. ↑ About Tencent Tencent Official Site
  31. ↑ "腾讯QQ最新24小时在线数据". Im.qq.com. Retrieved 2011-01-14.
  32. ↑ The party, the people and the power of cyber-talk economist.com, Apr 27th 2006
  33. ↑ "QQ International". Tencent. Retrieved November 23, 2012.
  34. ↑ Products and Services > Interactive Entertainment Service Tencent official Site
  35. ↑ Carsten, Paul (December 16, 2014). "Tencent, Sony strike China music distribution deal". Reuters.
  36. 1 2 Products and Services > E-commerce Tencent Official Site
  37. 1 2 Chohan, Usman W. "Dididache 嘀嘀打车 - Hailing the Future, One Cab at a Time". McGill University. Retrieved 2014-05-14.
  38. ↑ Products and Services > Internet Value-added Service Tencent Official Site
  39. ↑ Products and Services > Internet Value-added Service Tencent Official Site
  40. ↑ "Tencent Releases "QQ Player"". Retrieved 14 August 2015.
  41. ↑ Products and Services > Online Media Tencent Official Site
  42. ↑ Tencent to Build 3000-person Search Army to Power Search Engine cnreviews.com, 14 APR 2008
  43. ↑ What Valley Companies Should Know about Tencent techcrunch.com, Jun 20, 2010
  44. ↑ Products & Services > Instant Messaging Service Tencent Official Site
  45. 1 2 Mozilla Takes on Microsoft in China businessweek.com, January 11, 2008, 7:21AM EST
  46. ↑ Tencent Weiyun Official website.
  47. ↑ Tenpay Expands Into Online Utility Payment JLM Pacific Epoch, Jul 20, 2009
  48. ↑ Tenpay Releases Credit Card Payment Service JLM Pacific Epoch, Apr 15, 2009
  49. ↑ Knock, Knock: TenPay To Offer Door-To-Door Recharging Service J:M Pacific Epoch, Nov 14, 2008
  50. ↑ "WeChat website".
  51. ↑ "Social features of WeChat". Value2020. Retrieved 2013-01-23.
  52. ↑ "Here’s a Heatmap of WeChat Users Around the World". TechinAsia, Steven Millward & VALUE2020. Retrieved 2013-01-18.
  53. ↑ "Gears of War studio sells minority stake to Chinese Internet company". Gamespot.
  54. ↑ Tencent Interim Report 2011 Tencent Official Site, Retrieved 2014-02-22.
  55. ↑ Moser, Kelsey (December 16, 2015). "Tencent purchases remaining shares in Riot Games to hold 100% of equity". TheScore eSports. TheScore Inc.
  56. ↑ Frank, Allegra (December 16, 2015). "Riot Games now owned entirely by Tencent". Polygon. Retrieved December 16, 2015.
  57. ↑ "The Kardashian effect: Tencent pays $126M for 15% of Glu Mobile - GamesBeat - Games - by Dean Takahashi". VentureBeat. Retrieved 14 August 2015.
  58. ↑ Juro Osawa (13 May 2015). "Tencent Buys Stake in U.S. Game Maker Pocket Gems". WSJ. Retrieved 14 August 2015.
  59. 1 2 Company Snapshot: Tencent Technology (Shenzhen) Co., Ltd. businessweek.com
  60. ↑ China Developers Bring Mobile Widgets to Market nokia.com, 2008
  61. ↑ IPEXL Search > Patent Directory > "TENCENT TECHNOLOGY SHENZHEN COMPANY LIMITED" ipexl.com
  62. ↑ Tencent's innovation is copied... Machine translation xinhuanet.com, April 13, 2007
  63. ↑ Tencent Holds 400 Patents JLM Pacific Epoch, Jul 29, 2009
  64. ↑ Thomson, Iain. "Tencent stripped of antivirus rankings for cheating on tests". The Register. Retrieved 5 June 2015.
  65. ↑ Ilascu, Ionut. "Security Vendor Tencent Optimizes Antivirus for Better Independent Test Results". Softpedia. Retrieved 5 June 2015.
  66. ↑ Hachman, Mark. "Tencent, Qihoo antimalware firms are accused of cheating, stripped of rankings in antivirus tests". PCWorld. Retrieved 5 June 2015.
  67. ↑ Hsu, Alex (28 June 2013). "Baidu Missed Out on Kingsoft Network Investment; Tencent invests USD 46.98 million In US 52 million Round".
  68. ↑ Hsu, Alex (10 Jul 2013). "Executives at Ctrip and Tencent Deny Acquisition Rumors".
  69. ↑ Activision buys itself back from Vivendi for $8 billion joystiq.com, Retrieved 2014-02-28.
  70. ↑ Aitken, Todd (17 September 2013). "Tencent invested $448 million in Chinese search engine Sogou". CEOWORLD Magazine.
  71. ↑ http://www.reuters.com/article/2014/01/15/tencent-chinasouthcity-idUSB9N0K200Q20140115
  72. ↑ "Tencent Takes a Stake in Dianping For O2O Plan". Retrieved 14 August 2015.
  73. ↑ Lulu Yilun Chen (10 March 2014). "Tencent to Buy 15% Stake in JD.com to Boost E-Commerce". Bloomberg.com. Retrieved 14 August 2015.
  74. ↑ Tencent Interim Report 2014 Tencent Official Site, Retrieved 2014-10-23.
  75. ↑ Lulu Yilun Chen (27 March 2014). "Tencent to Pay $500 Million for Stake in CJ Games". Bloomberg.com. Retrieved 14 August 2015.
  76. ↑ "Tencent Buys 20% of China’s 58.com for $736 Million". Bloomberg.com. 27 June 2014. Retrieved 14 August 2015.
  77. ↑ Suresh Seshadri (17 April 2015). "58.Com to Buy 43% of Rival Ganji as Tencent Raises Stake". Bloomberg.com. Retrieved 14 August 2015.
  78. ↑ "GGRAsia – Tencent unit buys into lottery provider China LotSynergy". Retrieved 14 August 2015.
  79. ↑ "Chinese mobile shopping app Koudai gets $350M led by Tencent". Tech in Asia. Retrieved 14 August 2015.
  80. ↑ Osawa, Juro. "Tencent to Distribute HBO Dramas, Movies Online in China", The Wall Street Journal, 24 November 2014. Accessed 10 August 2015.
  81. ↑ Gillian Wong. "Chinese Taxi-Hailing App Didi Raises More Than $700 Million". WSJ. Retrieved 14 August 2015.
  82. ↑ Eben Novy-Williams (30 January 2015). "NBA Expands China Business With Five-Year Tencent Extension". Bloomberg.com. Retrieved 14 August 2015.

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