Tencent’s survival rules
On many people’s computer desktops, there is always a little penguin flashing around. QQ, this little penguin, has changed the lives of more than 300 million Chinese people. Lifestyle, using technology to produce a fashion.
With a user base of more than 300 million, Tencent has created a technologically fashionable business model with the help of the Internet on this huge platform.
How to attract stars
A reporter once asked Shanda Chairman Chen Tianqiao, "Have you ever thought about doing instant messaging like Tencent QQ." His answer was thought-provoking, "Sima Zhaozhi Who doesn't want to do it? The problem is, Tencent has a "famous method for attracting stars". If you have any good ideas, it will be copied immediately. Working for a long time is equivalent to working for Tencent. I will only go to find someone that Tencent can't imitate. Do it."
Chen Tianqiao's so-called "star-attracting method" undoubtedly reveals Tencent's technology follow-up strategy. The growth rate of Tencent's performance from 2002 to 2004 is eye-catching. One of the important reasons is that Tencent continues to launch new services on the basis of the original to attract users' attention. Many of the inspirations for these new businesses come from the Internet.
A provable example is QQ Game. Since it is bundled with QQ Community, from last year’s investment to now, the maximum number of online users of QQ Game has exceeded 1.3 million, far surpassing Lianzhong and becoming the first in China. Game portal, this is the embodiment of following strategy. In addition, services such as ring tones, text messages, dating, and alumni records developed in the past are all the result of following the strategy.
Currently, QQ has nearly 370 million registered users. On this basis, Tencent can see the success of others before following it, because the cost of developing new business will be relatively low.
The so-called star-attracting method has indeed brought many business opportunities to Tencent, but in fact this method is not always tried and true for Tencent. Tencent does have some community barriers, but this does not mean that Tencent can succeed in any industry, such as QQ dating, email, etc. There are still many problems.
Tencent’s QQ users are actually a large platform, and various projects are incubated on this platform. But the reason why Tencent can actually carry out so many projects continuously and absorb the strengths of many companies is largely due to Tencent's corporate culture, which is a relaxed, free and open corporate culture.
It is common for employees within Tencent to quarrel over work issues. This habit has even been brought to meetings. Employees will often refute the opinions of their leaders, and company management, including Ma Huateng, also pay great attention to absorbing them. Great ideas from employees.
For example, the now popular QQ show is based on suggestions made by employees. Similar businesses like QQ Show first started in South Korea. Later, employees thought it was suitable for Tencent and proposed the "QQ Show" to the company's management. At first, the company leaders thought this suggestion was not feasible. In order to prove the feasibility of the suggestion, the employees made detailed development plans and finally convinced the leaders. The development of "QQ Show" has contributed a lot of profits to Tencent. It is understood that projects like QQ Show are not uncommon in Tencent.
Profit Model
At the beginning of its development, Tencent successfully attracted US$2.2 million investment from IDG and Yingke Digital. However, the number of registered users continued to grow at a steep curve. How to find a profit model became a The key to Tencent moving forward.
Tencent’s search for a profit model started with online advertising. In the new version of the software on July 25, 2000, a BANNER advertising banner was inserted into the message receiving end. Although Tencent's online advertising sales subsequently developed very well, compared with the investment of hundreds of thousands of new registered users every day (the highest number of new users per day reached 800,000) and the investment of two new servers a month, , online advertising is a drop in the bucket.
The "Monternet" launched by China Mobile at the end of 2000 provided Tencent with a huge business opportunity.
Tencent's situation at that time was that it had nearly 100 million registered Internet users, and these users had a large number of consumer demands. However, Tencent suffered from the lack of charging channels. However, Monternet has solved this big problem for Tencent through the mobile phone charging agreement (currently 15 points for operators and 85 points for SPs). Tencent quickly launched a paid membership business, restricted page registration, launched mobile QQ business, and has been in the value-added service business ever since.
It is understood that Tencent’s current main profits are divided into three parts, namely Internet value-added services, mobile and communications value-added services and online advertising.
Mobile and communication value-added services include mobile chat, mobile games, mobile voice chat, mobile phone picture and ringtone downloads, etc. When users download or subscribe to SMS, MMS and other products, they pay through the telecom operator's platform. The telecom operator receives the fees and then splits the settlement with the SP.
Mobile QQ chat is Tencent’s first real step towards profitability and an expansion of its instant messaging business platform. Through the binding of the QQ number registered on the Internet and the mobile phone number, the mobile phone becomes a mobile QQ, which can receive information from online friends at any time. The original simple "PC to PC" chat mode has developed into "PC to mobile phone" and "mobile phone". For PC" interactive mode, SMS business volume has increased significantly.
Tencent’s Internet value-added services mainly include three categories: membership services, community services, and game entertainment services. Specific businesses include email, entertainment and information content services, chat rooms, dating services, casual games, and Massive multi-user online games, etc. According to Tencent's financial statements for the fourth quarter of 2004, revenue from Internet value-added services was 125.1 million yuan, an increase of 60.1% over the same period in 2003. Revenue from mobile and telecommunications value-added services was 168.7 million yuan, an increase of 18.6% compared with the same period in 2003.
Another part of the company's revenue comes from online advertising, mainly through instant messaging client software (login FLASH, instant messaging window and system information) and in the advertising column of the qq.com portal website Provide online advertising profit. According to Tencent's financial statements for the fourth quarter of 2004, revenue from online advertising was 17.7 million yuan, an increase of 81.5% compared with the same period in 2003.
In addition, the outsourcing of the QQ cartoon brand has become a special source of income for Tencent. In 1999, Tencent cooperated with Guangzhou Dongli Bank, which originally produced and sold clothing, gifts and toys. Relying on Dongli Bank's inherent channel and manufacturing advantages, combined with the advantages of the QQ brand, Tencent launched the QQ brand store, which became the offline version of my country's Internet culture. An innovative development model. In addition to QQ cartoon toys and clothing, Tencent has also launched an independent derivative brand "Q-GEN" to expand the QQ brand extension and develop the clothing industry in depth. Tencent can not only expand its brand influence, but also share more than 10% of the agency fee.
As of December 31, 2004, Tencent’s mobile and telecommunications value-added service revenue reached 641.19 million yuan, Internet value-added services reached 439.041 million yuan, online advertising reached 54.801 million yuan, and other revenue amounted to 8.501 million yuan, totaling 11.43533 billion.
A long time ago, Ma Huateng once said that "mobile business can only reflect the peripheral part of Tencent's core value. PC-based value-added services are Tencent's real core value." Financial data confirms Ma Huateng's statement. One statement.
Competition Crisis
When the cake is big, someone will naturally share it. Tencent's growing user base and huge profits from instant messaging in China have led to more intense competition in this market.
Due to the low market threshold, real-time communication software such as NetEase Paopao, Sohu SoQ, Langma UC, IMU and the Chinese version of Yahoo Messenger, which are aiming to grow the domestic real-time communication user base by one million annually, are constantly joining the ranks. If these software have a small market share, then the free-to-use MSN owned by Microsoft, which has a huge monopoly advantage, has become the biggest threat to Tencent.
In order to effectively block MSN, before MSN has yet to expand massively, Tencent first cultivates users and forms barriers in usage habits, allowing MSN and others to hit the wall. At present, Tencent has canceled the fee for applying for a QQ number and launched Enterprise QQ. It is understood that the enterprise has installed the enterprise QQ instant messaging system, and cooperates with its own original office automation system to properly manage and integrate multiple tasks and instant messaging services, which greatly improves the speed and ability of the enterprise to process things in real time.
In addition to strengthening the promotion of personalized services, mergers and acquisitions and expansion have also become the only way for Tencent. Tencent was successfully listed on the Hong Kong Main Board on June 16 last year. Industry insiders believe that Tencent will use the funds raised from the listing to carry out a series of acquisitions and expansion to maintain market share, and lay the foundation to compete with Internet giants such as Microsoft and Yahoo through the asset scale effect.
As for the company’s future development strategy, management including Ma Huateng are unwilling to say more. It is understood that the company's entire leadership is currently attaching great importance to and paying attention to the dynamics of competitors, including Microsoft, and is making very cautious decisions and will only expand outward step by step. In addition, for the many projects it has carried out, the company is gradually balancing strategies in various aspects, actively exploring development methods in various fields and making some expansion attempts. For example, it can be seen from the e-commerce, online games, etc. that are currently being gradually promoted. In the future, more emphasis will be placed on investment in interactive entertainment projects.