11/29/2010

Social networks steer China web evolution


Nobody looking at Tencent’s financial statements – with its continued double-digit revenue growth and 68 per cent gross margin – would come to the conclusion that the company needs to change its business model.

Third-quarter revenue at the Chinese internet company grew 55.1 per cent to Rmb5.2bn ($780m), compared with the same period last year.

And yet, the world’s third-largest internet company by market capitalisation is working on changes that will turn its traditional strategy upside down.

Tencent’s biggest asset is the huge user base served by QQ, its instant messaging tool – which had 638m active accounts at the latest count.

In the past the company focused on making sure that if these people spent money online, they would spend it on Tencent products. It has made efforts to provide its users with a variety of services including online games, news and social networking, making them less likely to leave the Tencent platform.

Now it is throwing open the door and inviting others into the party: Other companies can offer their games on Tencent sites, and third-party websites can push their feeds on to the Tencent platform.

The about-turn recognises the fact that social networking sites are changing the monetisation models in the internet industry in China, the country with the world’s largest internet population at 420m.

Sina, the company that runs the country’s largest online news portal and leading microblog, last month teamed up with MSN China, opening its microblog and Microsoft’s instant messaging tool in China to each other.

Sina also set up a developer fund for third-party application providers on its microblog.

Read more at Financial Times

Nov 29, 2010 1:13:59 PM | Current Affairs, Technology

1 Comment

Steve

Yes, it is true that the Chinese love their socializing and that includes online.

Steve
http://www.TheChinaBusinessGuide.com

Posted by: Steve | 12/01/2010 at 08:28 AM

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