Tencent Holdings Ltd. is a multinational Chinese technological conglomerate holdings company. It was founded in 1998 by Ma Huateng, Chen Yidan, Zhang Zhidong, Xu Chenye, and Zeng Liqing. Tencent’s subsidiaries globally market a variety of internet related products and services. These products and services include entertainment and artificial intelligence along with other technological exploits. It’s twin skyscraper headquarters (Tencent Seafront Towers) is located in Nanshan District, Shenzhen, China.
Tencent is the largest video game vendor in the world. It is one of the world’s most financially valuable companies and it is also among the largest social media, venture capital and investment corporations. Their services include music, mobile games, internet services, smartphones, multi-player online games and payment systems. They are also the owners of WeChat and Tencent QQ which are messenger apps within China. It also owns the majority of Global’s music services (Tencent Music Entertainment), with more than 700 million active users and 120 million paying subscribers.
The company had surpassed a market value of 500 billion dollars in 2018 and became the first Asian technology company to cross that valuation mark. IT is now the most valuable publicly traded company in China and among the world’s highest valued technology companies. Tencent is credited to be the most innovative company in the world by Boston Consulting Group and Fast Company. Tencent has stakes in over 600 companies and began to focus on tech startups in China since 2017. It was reported in 2018 that Tencent employed over 54,309 persons.
The Chinese holding corporation has controlling stakes in some of the best tech companies in the world. Their innovativeness has garnered them a ton of success both within and outside of China. Tencent Holdings Ltd. has also been responsible of helping a large number of tech startups to grow and establish their businesses within China.
The founding and growth of Tencent Holdings Ltd.
Tencent was founded in November of 1998 by Pony Ma, Zhang Zhidong, Xu Chenye, Chen Yidan and Zeng Liqing as Tencent Inc. in the Cayman Islands. Initial funding was provided to it by venture capitalists. In February 1999, Tencent’s messenger product OICQ released. Shortly after, Tencent had the client’s name changed to QQ; this was said to be due to a lawsuit threat from ICQ and its owner AOL. The company remained unprofitable for the first three years. South African media company Naspers purchased a 46.5% share of Tencent in 2001 (As of 2021, it owns 28.9% through Prosus which also own its stake in Tencent’s sister company, such as OLX, Mail.ru Group, Trip.com Group, Delivery Hero and PayU.).
Tencent Holding Ltd was listed on the Hong Kong Stock Exchange on 16 June 2004. The company originally derived income solely from advertising and premium users of QQ, who pay monthly fees to receive extras. But by 2005, charging for use of QQ mobile, its cellular value-added service, and licensing its penguin character, which could be found on snack food and clothing, had also become income generators. Tencent was seeing profit growth from the sale of virtual goods by the time it was 2008. While Tencent’s services have included online gaming since 2004, around 2007/2008 it rapidly increased its offerings by licensing games.
On 18 February 2011, Tencent acquired a majority of equity interest (92.78%) in Riot Games, developer of League of Legends, for about US$230 million. Tencent had already held 22.34% of the equity interest out of a previous investment in 2008. On 16 December 2015, Riot Games sold its remaining equity to Tencent Holdings. Tencent acquired a minority stake in Epic Games, developer of franchises like Fortnite, Unreal, Gears of War and Infinity Blade, in June 2012.Tencent in 2013 increased its stake in Kingsoft Network Technology, a subsidiary of Kingsoft Corporation, to 18%. Tencent previously had a 15.68% stake in the company.
On 15 January 2014, Tencent said it would invest HKD 1.5 billion (US$193.45 million) in logistics and warehouse firm China South City Holdings Ltd to develop its e-commerce and logistics business. On 27 February 2014, Tencent purchased a 20-percent stake in restaurant ratings and group-buying website Dianping for $400 million. On 10 March 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.
WeChat and Tencent QQ
Tencent QQ is Tencent’s first and most notable product, QQ is one of the most popular instant messaging platforms in its home market. As of 31 December 2010, there were 647.6 million active Tencent QQ IM user accounts, 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. While the IM service itself is free, a fee was being charged for mobile messaging as of 2006. Tencent also created QQ International, which is an English version of QQ that allows communication with mainland accounts.
WeChat is a social mobile application with voice and text messaging, timeline. It is the most popular social mobile application in China and some overseas Chinese communities, for instance, Malaysia. As of 2017, WeChat has been unsuccessful in penetrating major international markets outside of China.
Tencent established exclusive in-China distribution agreements with several large music producers, including Sony, Warner Music Group and YG Entertainment in 2014 and in 2017 it signed a deal with Universal Music Group to stream its music in China. It also entered a partnership with Alibaba Group on music-streaming rights sharing, the deal aims to protect licensed streaming services offering copyrighted content of the music industry, encouraging more high-quality and original music, as well as developing China’s fast-growing streaming market. Alibaba will gain the rights to stream music from international labels, which already have exclusive deals with Tencent, in return for offering reciprocal rights to its catalogue of Chinese and Japanese music.
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