The rest has come from online advertising and e-commerce. Chiefly from smartphone and PC-based gaming, and also from social networking (digital content subscriptions, membership subscriptions and selling virtual goods) – accounting for over 70% of its total revenue. Its biggest revenue stream through the 2010s has been value-added services. In contrast, Tencent started with a distribution platform and built its reach before moving on to monetise its diverse applications. Tencent’s monetisation strategy so far has been counter-intuitive to the traditional way of doing business: where companies first create a product or service and then seek customers. The company’s market capitalisation grew with a five-year compound annual growth rate of 40% for 2011-16 and it broke into the league of the top ten most valuable listed companies in the world in April 2017. Investors rewarded the company for its successful growth. By 2010, thanks to Pony Ma’s decision to open up Qzone to apps from third-party developers, Qzone was the largest social networking platform in China with 492m active users. In 2005, it introduced Qzone – a multimedia social networking service.

Three years later, Tencent was listed on the Hong Kong Stock Exchange.

It was only in 2001, following the launch of the MobileQQ messaging platform for mobile phones, that Tencent turned its first profit: US$1.2m on sales of US$5.9m. It secured one million users in the first year but the company remained unprofitable. And to do that we need to go back to the company’s early days.Ĭo-founded in 1998 by Ma Huateng (better known as Pony Ma) and four friends, Tencent launched its first product in 1999 – a free PC-based instant messaging service called OICQ, later renamed QQ. To answer this, we need to understand Tencent’s monetisation strategy – and its philosophy on user experience. So why hasn’t Tencent yet made the most of its advertising potential? Compare this with Facebook’s model: advertising makes up 98% of its total revenue. Just 18% of its total revenue in the 2016 fiscal year came from online advertising. Yet it is sitting on an advertising goldmine. The Chinese technology giant Tencent recently overtook US rival Facebook to become the world’s most valuable social network company, with a market capitalisation of US$540 billion.

Tencent qq pc