Tencent aims at global market

08:32, December 17, 2010      

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Tencent Holdings Ltd, China's biggest Internet company by market value, began offering its instant-messaging service to overseas users, challenging Microsoft Corp and Yahoo Inc.

The QQ International messaging service is now available in English, Japanese and French, Tencent said in a statement. The Shenzhen-based company also plans to set up a social networking site in English early next year, the statement said.

The move builds on Chairman Ma Huateng's plan to expand Tencent's business overseas after dominating the Chinese market with more than 600 million active accounts at home. Tencent and its largest shareholder, South Africa's Naspers Ltd, have made investments in Internet portals, e-mail and instant-messaging services in India, Russia and Thailand in the past two years.

"It seems to be another step in Tencent looking to expand in markets beyond China," said Justin Weiss, an analyst at JI Asia in Tokyo. "Technologically it's not much of a leap so the more difficult issue would be gaining market share and catching on with local consumers in these overseas markets where there may already be a popular local alternative. That's why it can often make sense for an Internet company to partner with a local operator."

Tencent has dominated the instant-messaging market in China, where QQ accounted for 77 percent of users at the end of last year compared with 4.2 percent for Microsoft's MSN service, according to research firm Analysys International.

Tencent shares fell 1.5 percent to HK$175.50 ($22.57) at the midday trading break in Hong Kong on Thursday, giving the company a market capitalization of HK$322 billion.

Most of Tencent's international expansion so far has been through investing in ventures with Naspers, which holds 35 percent of Tencent's shares. Naspers has been the largest holder in Tencent since 2001, predating the company's initial share sale in Hong Kong in 2004.

In 2008, Tencent bought a stake in a Naspers subsidiary in India. This year, Tencent bought 10 percent of Mail.ru Group Ltd, the Russian e-mail company that's a part owner of Facebook Inc, for $300 million, as well as 49.9 percent of Sanook, a Naspers unit in Thailand.

The new international QQ service will offer "a bridge to any non-Chinese user to connect with the existing 600 million active Chinese language accounts", Tencent said in the statement. It will include free applications to explore China job opportunities, news, language learning tools, travel deals, and videos, the statement said.

Source:China Daily
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