Tencent

Tencent Holdings Limited
Native name
 腾讯控股有限公司
Public
Traded as SEHK: 700
Industry Internet
Founded November 11, 1998 (1998-11-11)
Founder Ma Huateng
Zhang Zhidong
Xu Chenye
Chen Yidan
Zeng Liqing
Headquarters Shenzhen, Guangdong, China
Area served
 Worldwide (mainly Greater China)
Key people
 Ma Huateng
(Core Founder, Chairman & CEO)
Martin Lau
(President)
Products Social networks, instant messaging, mass media, web portals, e-commerce, web browser, Antivirus software and multiplayer online games
Services Online services
Revenue Increase CN¥102.863 billion (2015)[1]
Increase CN¥40.627 billion (2015)[1]
Increase CN¥29.108 billion (2015)[1]
Total assets Increase CN¥306.818 billion (2015)[1]
Total equity Increase CN¥122.100 billion (2015)[1]
Number of employees
 31,557 (Oct 2016)[2]
Subsidiaries Riot Games
Epic Games (48.4%)
Supercell (84.3%)
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 is one of the largest Internet companies in the world, many services of whose include social network, web portals, e-commerce, and multiplayer online games.[4] Its offerings in China include the well-known instant messenger Tencent QQ and one of the largest web portals, QQ.com.[5] Mobile chat service WeChat has helped bolster Tencent's continued expansion into smartphone services. Tencent holds 15% stake of JD.com, one of the largest B2C online retailers in China.

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, Zhang Zhidong, Xu Chenye, Chen Yidan and Zeng Liqing in November 1998[8] as Tencent Inc.[9] Incorporated in the Cayman Islands,[10] initial funding was provided to it by venture capitalists.[3] In Feb 1999, Tencent's iconic messenger product OICQ released.[11] Shortly after, Tencent had its name changed to QQ; this was said to be due to a lawsuit threat from ICQ and its owner AOL.[8][12] 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%.[13]) 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.[14] 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 could be found on snack food[15] and clothing,[8] had also become income generators.[8] By 2008, Tencent was seeing profit growth from the sale of virtual goods.[16] While Tencent's services have included online gaming since 2004, around 2007-2008 it rapidly increased its offerings by licensing games.[17] While least two, CrossFire and Dungeon Fighter Online, were originally produced by South Korean game developers, Tencent now makes its own games.[17]

Investments

On February 18, 2011, Tencent acquired a majority equity interest (92.78%)[18] 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.[19][20]

Tencent acquired a minority stake in Epic Games, developer of franchises like Unreal, Gears of War and Infinity Blade, in June 2012.[21]

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.[22]

Tencent took part in Activision Blizzard splitting from Vivendi as a passive investor and now owns about 12% of the shares.[23]

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.[24]

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.[25]

On February 27, 2014, Tencent purchased a 20-percent stake in restaurant ratings and group buying website Dianping for $400 million.[26]

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.[27] 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.[28]

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.[29]

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.[30] 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%.[31]

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).[32]

On October 23, 2014, Tencent pitched in $145 million for a 10 percent stake in Koudai Gouwu, a Chinese mobile shopping portal.[33]

In November 2014, the company announced a deal with HBO which would give it exclusive rights for distribution in China.[34]

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.[35]

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.[36]

On February 27, 2015, Tencent announced that it has acquired a minority stake in Robot Entertainment, the developer of the Orcs Must Die! series.[37]

On April 29, 2015 Tencent acquired a minority stake in Glu Mobile, paying USD 126 million for 14.6 percent of the company.[38]

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.[39]

In 2015, Tencent and BYD partner in NBA deal.[40]

On June 21, 2016 Tencent announced a deal to acquire 84.3% of Supercell with USD 8.6 billion[41]

In July 2016, Tencent acquired a majority stake in China Music Corporation.[42]

In 2016, Tencent, together with Foxconn and luxury-car dealer Harmony New Energy Auto founded Future Mobility, a car startup that aims to sell all-electric fully autonomous premium cars in 2020.[43]

Game development

Starting in 2016, Tencent develops video gaming console dubbed TGP (Tencent Gaming Platform) Box. The TGP BOX is called the Blade. It is an Intel- powered console running Windows 10 and a TGP Box mode. So far, the TGP console has imported many Tencent games, such as League of Legends, FIFA Online 3, NBA 2K, Monster Hunter, Need for Speed, etc. Tencent hopes to bring lots of third-party developed games.

Branching out from messaging products, Tencent's first game was QQ Tang (QQ堂) in 2004. This was soon followed QQ YinSu (QQ音速) in 2006, QQ SanGuo(QQ三国) in 2007. In 2011, Tencent started hosting the game League of Legends.

Virtual goods

Tencent sells virtual goods[44] for use in their MMOs,[45] its IM client, social networking sites,[46] and for mobile phones.[47] 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.[48] These range from the offbeat, such as virtual pets[49] and the virtual clothing, jewelry, and cosmetics needed to customize online-game avatars,[50] to the more mundane, such as more storage space, wallpapers, bigger photo albums,[46] and ring tones.[47]

Locations

Tencent's headquarters are located in the Southern Hi-Tech Park District (新科技园 xīnkējìyuán) in Nanshan District, Shenzhen.[51][52] Other sites include a 48,000 square meter compound that houses an R&D center in the Chengdu Hi-Tech Industrial Development Zone,[53] a data and R&D center in Tianjin's Binhai Service Outsourcing Industry Park that is expected to be finished by June 2013,[54] 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.[55]

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.

iTQQ

China's first "smart interactive television service" and a joint effort with TCL.[48]

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 Online, 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.[56]

Music distribution

In 2014, Tencent established exclusive in-China distribution agreements with several large music producers, including Sony, Warner Music Group and YG Entertainment.[57]

PaiPai.com

Launched on March 13, 2006,[58] it is a C2C auction site.[48]

QQ instant messenger

Main article: Tencent QQ

Launched in February 1999,[51] and Tencent's most notable product, QQ is one of the most popular instant messaging platforms in its home market.[48][59] 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.[60]

While the IM service is free, as of 2006 a fee was being charged for mobile messaging.[61]

QQ International

An English version of QQ that allows communication with mainland accounts, QQi is available for Windows and Mac OSX.[62]

QQLive

Main article: QQLive

A peer-to-peer distribution platform for streaming media.[63]

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.[64]

QQ Player

In 2008, Tencent released a media player, available for free download, under the name QQ Player.[65]

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,[66] this search engine's name sounds like "搜搜", or "search search" in Chinese.[67] It was a Chinese partner of Google, using AdWords.[68]

Tencent Traveler

Abbreviated "TT" (TencentTraveler), this web browser developed by Tencent[69] is based on Trident[70] and was the third most-used browser in China c. 2008.[70]

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.[71] It is available in English and Chinese.

TenPay

An online payment system similar to PayPal, it supports B2B, B2C, and C2C payments.[58] In some Chinese cities individuals can use TenPay for utility payments and to refill their public transport cards.[72] Co-branded credit cards are available, and credit card bills can also be paid using the service.[73] Offline recharging of your TenPay account is possible, as the company sends employees to collect customer money in person.[74]

WeChat

Main article: WeChat

WeChat[75] is a social mobile application with voice and text messaging, timeline,[76] 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.[77]

Subsidiaries

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

Tencent Technology (Shenzhen) Co Ltd

A software development unit that has created, among others, Tencent Traveler and later versions of QQ IM,[78] as well as some mobile software.[79] This subsidiary is located at the Southern District of Hi-Tech Park, Shenzhen.[78] It also holds a number of patents related to instant messaging and massively multiplayer online game gaming.[80]

Controversy

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."[81]

As of 2009, the company holds 400 patents.[82]

Anti-malware software cheating allegations

In 2015, security testing firms AV-Comparatives, AV-TEST and Virus Bulletin jointly decided to remove Tencent from their software whitelists. The Tencent products supplied for testing were found to contain optimizations that made the software appear less exploitable when benchmarked but actually provided greater scope for delivering exploits.[83] 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 anti-malware tests.[84][85]

See also

References

  1. 1 2 3 4 5 6 "2015 Annual Report" (PDF). Tencent.com. Retrieved 2016-03-17.
  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. ↑ Mair, Victor (2011-04-26). "A New Morpheme in Mandarin". Language Log. Retrieved 2012-04-14.
  12. ↑ Bruce Einhorn; Brad Stone (August 4, 2011). "Tencent: March of the Penguins". Businessweek. pp. 4/7. Retrieved 8 Aug 2011.
  13. ↑ Tencent 腾讯 Naspers
  14. ↑ "Hang Seng Indexes" (PDF). Retrieved 14 August 2015.
  15. ↑ QQ Games on AIM: Another Penguin Aims for the Casual Market gotgame.com, January 13, 2009
  16. ↑ A Chinese Web Giant's Sizzling Success businessweek.com, November 26, 2008, 9:11AM EST
  17. 1 2 Bruce Einhorn; Brad Stone (August 4, 2011). "Tencent: March of the Penguins". Businessweek. pp. 5/7. Retrieved 8 Aug 2011.
  18. ↑ Tencent Interim Report 2011 Tencent Official Site, Retrieved 2014-02-22.
  19. ↑ Moser, Kelsey (December 16, 2015). "Tencent purchases remaining shares in Riot Games to hold 100% of equity". TheScore eSports. TheScore Inc.
  20. ↑ Frank, Allegra (December 16, 2015). "Riot Games now owned entirely by Tencent". Polygon. Retrieved December 16, 2015.
  21. ↑ "Gears of War studio sells minority stake to Chinese Internet company". Gamespot.
  22. ↑ Hsu, Alex (28 June 2013). "Baidu Missed Out on Kingsoft Network Investment; Tencent invests USD 46.98 million In US 52 million Round".
  23. ↑ Activision buys itself back from Vivendi for $8 billion joystiq.com, Retrieved 2014-02-28.
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  35. ↑ Gillian Wong. "Chinese Taxi-Hailing App Didi Raises More Than $700 Million". WSJ. Retrieved 14 August 2015.
  36. ↑ Eben Novy-Williams (30 January 2015). "NBA Expands China Business With Five-Year Tencent Extension". Bloomberg.com. Retrieved 14 August 2015.
  37. ↑ James Brightman (27 February 2015). "Tencent makes minority investment in Robot Entertainment". Retrieved 12 February 2016.
  38. ↑ "The Kardashian effect: Tencent pays $126M for 15% of Glu Mobile - GamesBeat - Games - by Dean Takahashi". VentureBeat. Retrieved 14 August 2015.
  39. ↑ Juro Osawa (13 May 2015). "Tencent Buys Stake in U.S. Game Maker Pocket Gems". WSJ. Retrieved 14 August 2015.
  40. ↑ Pu Yang (29 December 2015). "Chinese auto brand to sponsor Tencent's NBA coverage". YT Sports. Retrieved 29 December 2015.
  41. ↑ "Juro Osawa & Rick Carew (21 Jun 2016). "Tencent Seals Deal to Buy 'Clash of Clans' Developer Supercell for $8.6 Billion". WSJ. Retrieved 21 June 2016.
  42. ↑ Frater, Patrick (July 14, 2016). "Tencent to Become China's Top Music Company Following Deal". Variety. Retrieved July 14, 2016.
  43. ↑ http://www.wsj.com/articles/tencent-backed-company-aims-to-launch-smart-electric-cars-before-2020-1468302895
  44. ↑ "Cashing in on virtual goods - Techland".
  45. ↑ TenCent Reaches New Heights in Virtual Goods Sales insidesocialgames.com, March 31st, 2009
  46. 1 2 Tencent Tells its Story at Virtual Goods Summit 3pointd.com, Friday, June 22nd, 2007, at 1:45 pm Eastern
  47. 1 2 Ericsson Mobility World partner profile: Tencent ericsson.com
  48. 1 2 3 4 "Technology". Retrieved 14 August 2015.
  49. ↑ Lucrative Alternatives to Online Advertising businessweek.com, October 23, 2008, 5:00PM EST
  50. ↑ The world's most lucrative social network? China's Tencent beats $1 billion revenue mark venturebeat.com, March 19, 2009
  51. 1 2 Investor Fact Sheet Tencent Official Site
  52. ↑ "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"
  53. ↑ Tencent Opens Chengdu R&D Center JLM Pacific Epoch, Apr 09, 2009
  54. ↑ Tencent's Tianjin R&D Center Ready in 2013 JLM Pacific Epoch, Mar 13, 2009
  55. ↑ DI SCLOSEABLE TRANSACTI ON PURCHASE OF PROPERTY 15 May 2008
  56. ↑ Products and Services > Interactive Entertainment Service Tencent official Site
  57. ↑ Carsten, Paul (December 16, 2014). "Tencent, Sony strike China music distribution deal". Reuters.
  58. 1 2 Products and Services > E-commerce Tencent Official Site
  59. ↑ About Tencent Tencent Official Site
  60. ↑ "腾讯QQ最新24小时在线数据". Im.qq.com. Retrieved 2011-01-14.
  61. ↑ The party, the people and the power of cyber-talk economist.com, Apr 27th 2006
  62. ↑ "QQ International". Tencent. Retrieved November 23, 2012.
  63. ↑ Added">[http://www.tencent.com/en-us/ps/internetservice.shtml Products and Services > Internet Value-added Service Tencent Official Site
  64. ↑ Products and Services > Internet Value-added Service Tencent Official Site
  65. ↑ "Tencent Releases "QQ Player"". Retrieved 14 August 2015.
  66. ↑ Products and Services > Online Media Tencent Official Site
  67. ↑ Tencent to Build 3000-person Search Army to Power Search Engine cnreviews.com, 14 APR 2008
  68. ↑ What Valley Companies Should Know about Tencent techcrunch.com, Jun 20, 2010
  69. ↑ Products & Services > Instant Messaging Service Tencent Official Site
  70. 1 2 Mozilla Takes on Microsoft in China businessweek.com, January 11, 2008, 7:21AM EST
  71. ↑ Tencent Weiyun Official website.
  72. ↑ Tenpay Expands Into Online Utility Payment JLM Pacific Epoch, Jul 20, 2009
  73. ↑ Tenpay Releases Credit Card Payment Service JLM Pacific Epoch, Apr 15, 2009
  74. ↑ Knock, Knock: TenPay To Offer Door-To-Door Recharging Service J:M Pacific Epoch, Nov 14, 2008
  75. ↑ "WeChat website".
  76. ↑ "Social features of WeChat". Value2020. Retrieved 2013-01-23.
  77. ↑ "Here's a Heatmap of WeChat Users Around the World". TechinAsia, Steven Millward & VALUE2020. Retrieved 2013-01-18.
  78. 1 2 Company Snapshot: Tencent Technology (Shenzhen) Co., Ltd. businessweek.com
  79. ↑ China Developers Bring Mobile Widgets to Market nokia.com, 2008
  80. ↑ IPEXL Search > Patent Directory > "TENCENT TECHNOLOGY SHENZHEN COMPANY LIMITED" ipexl.com
  81. ↑ Tencent's innovation is copied... Machine translation Xinhuanet.com, April 13, 2007
  82. ↑ Tencent Holds 400 Patents JLM Pacific Epoch, Jul 29, 2009
  83. ↑ Thomson, Iain. "Tencent stripped of antivirus rankings for cheating on tests". The Register. Retrieved 5 June 2015.
  84. ↑ Ilascu, Ionut. "Security Vendor Tencent Optimizes Antivirus for Better Independent Test Results". Softpedia. Retrieved 5 June 2015.
  85. ↑ Hachman, Mark. "Tencent, Qihoo antimalware firms are accused of cheating, stripped of rankings in antivirus tests". PCWorld. Retrieved 5 June 2015.
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