Why Facebook should worry about Tencent | Hacker News Reader

Why Facebook should worry about Tencent

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61 pointsarnauddri40 comments

Tencent is an interesting company, but this article is complete bogus.

    Tencent has learnt how to penetrate overseas markets. In 
    the online gaming industry, for instance, it has become a 
    player by buying equity stakes in Riot Games for $400 
    million; Epic Games for $330 million; Activision Blizzard 
    for $1.4 billion;

So when tencent invests in a company, they are evidently "penetrating overseas markets", but if Facebook acquires a company to gain international market share it is a sign of their inability to build something themselves.

    Tencent enjoys the advantages of a giant social network as
    well as a history of innovation. It has repeatedly fought
    off competitors including messaging apps such as AOL Instant
    Messenger, Confide, Glide, GroupMe, iMessages, Instagram 
    Direct, Kik Messenger, Line, Popcorn, Tango, MessageMe,
    Snapchat, Shots, Skype, Twitter direct messages, Telegram,
    TigerText, Viber, which Japan’s Rakuten recently bought for
    $900 million, Whisper, Wut, and ooVoo.

What is this even talking about? This seems like a random list of apps which are vaguely related to messaging. TigerText for instance is an internal messaging app for enterprises.

To me it seems like a rushed article that the author wrote because he had to meet some kind of quota.

To me, it looked like he was doing this to promote his book.

as I describe in a recently co-authored book,

As a South African I find the global indifference to Tencent quite strange. They are massive but mostly ignored (compared to e.g. Amazon which has a similar market cap). Tencent are aggressively expanding WeChat into Africa (big billboards everywhere!). They are also running a local development team in South Africa to customise the app for the local market.

Tencent were funded by Naspers, a South African company, so I think we're much more aware of them than most other countries. I've spoken with Koos Bekker, the CEO of Naspers, about Tencent years ago. He said that they work much faster than any US tech company he's every seen.

Startup News sites tend to live in a bubble where a "Coming Soon" page just hacked together by 2 guys in a cafe in SF is more important than a billion dollar business elsewhere.

That "Coming Soon" page can often provide more ideas and interesting discussion than the billion dollar business.

Don't be contrary just for the sake of it. Tencent is currently dominating the APAC market and that fact alone 'provide[s] more ideas and interesting discussion' than a coming soon page.

I'm also aware that Naspers is developing a lot of content for WeChat, something in the line of channels you can subscribe to or something. I think you can compare it to what Mxit did(or tried to do) years ago, but at that time I believe the tech was not there yet.

I also think they might have a gap in the African market. My gardener has a smart phone. He asks for mp3 and videos and I know he is on Whatsapp. But I don't see Whatsapp trying to supply content yet, might change in the near future with the facebook deal.

If WeChat can get people like him on their platform and supply content to him for a small fee they have a very big market. Also I can see he is willing to spend money. I just wonder how willing is he to spend money on digital content.

Btw, "Hallo" from a fellow South African.

Why do you find it strange? When I load tencent.com I get a blank page (I keep javascript disabled by default) and then when I finally get the page loaded, it loads in Chinese since it didn't detect my language either by HTTP header or by IP. The page looks like the typical boring corporate home page (I can't even tell it's a social network). I then switch to English and I see that tencent.com is not the homepage for the social network, but the parent corporation that owns the social network its responsible for. I can tell this from typical corporate specific stuff like talking about stuff like quarterly earnings and stock performance, their vision ("to be the most respected internet company" ha!) and mission ("to enhance people's quality of life through Internet services". lol). Obviously, there must be some other home page I need to go to in order to join, but I can't tell what it is from the tencent homepage and the tencent name is the only one I'm familiar with as a foreigner so I don't even know what other domain I might put in the address bar or what query I might execute in Google.

With product management like this, they are never going to penetrate beyond China. Thinking they can compete with Facebook here is laughable.

In addition, I think that they are definitely going to be a billion-dollar company and will probably be very popular in South Africa where they have roots, but to ask why people don't know or care about them as much as Amazon, to name the example, seems... well, obvious. I order stuff from Amazon twice a week! I've only ever heard of this company due to its Riot shares. I can see why a South African wouldn't see Amazon as very interesting, though... do you get 2 day shipping out there?

hey, try wechat.com (for the product mentioned by parent)

tencent is the corporate conglomerate and owns QQ, weibo, wechat and others.

QQ has been around for a bit and would be analogous to yahoo (social network, chat, news, email). QQ.com reflects this.

wechat is the new product they are trying to push to the global market.

As a QQ user I'd like to note that it seems quite superior feature-wise to MSN messenger, Gtalk, Facebook messenger and Skype IM. You can for instance paste multiple images straight into the input box and send them just like text, and it also has an extremely quick and easy to use screen capture feature. Not to mention a reliable, indexed message history, offline file transfers (you send it when the other person is offline, and when they sign in they'll be able to receive the file), and accurate notification whenever a message you send fails to be delivered.

Note however that I'm referring to the International Version; the mainland Chinese version is less appealing, full of advertisements, and hides some features behind paywalls.

I had to make a QQ account while I was studying abroad in Japan to play League of Legends. Needless to say I need to brush up on my mandarin.

you can't share full or partial screen like Skype in QQ.

You can share screen via remote access, and optionally give the other person shared control over your mouse, but I suppose that's not quite the same.

Asia is a region which has proven its ability to innovate in the messaging space and the internet as a whole. I believe Rakuten and Alibaba (through their investment in Tango and Viber) along with Tencent are now ready to compete with US juggernauts like FB

I don't think that Asia has proven its ability to innovate in the internet/messaging space. It's that significant cultural, language, and (in the case of China) legal barriers make it hard for Western companies to compete there. But at the same time, almost none of these companies have shown the potential to expand outside of Asia, and the vast majority of them have not even been able to expand out of their home countries.

Rakuten has tried to grow in the US market using its purchase of Buy.com, but that's not working, partly due to a disastrous rebranding. They also had a failed venture in China. So Viber may be successful if they just leave it alone, but trying to use it to make Rakuten better known in the West would be a horrible idea.

Naver (Korean) has the Japanese messaging service LINE (which was created by some of its Japanese employees at its Japanese subsidiary), but can't gain any other ground. And I definitely can't see the Chinese internet companies becoming successful in Japan or South Korea, given their penchant for censorship and nationalistic differences.

Of course it could just be that it's just hard to have a globally successful app, but consider the following:

China has their own social networks and messaging apps because they're sponsored (openly or behind closed doors) by the state. The reason they allow their citizens to use these apps is because these particular ones are being used to intercept intelligence data, and are not controlled by western entities. Does the chinese government have a hook in face book? If they did, would they want the US intelligence agencies who are undoubtedly closer to FB to have access to their citizens data? Probably not. Just as Chinese intelligence agencies control the net over there, US and western intelligence agencies control the internet over here, but in a much more secretive way as we've seen with the recent snowden leaks. The reason Chinese services aren't successful in the west is because the powers that be don't want them to be successful, because then the west wouldn't have the proper hooks in the Chinese social networks which are undoubtedly used for mass spying.

It is not entirely true. The GFW did offer protect to the local companies from the western giants at the very beginning. But this is just a side-effect.I don't think that is because the CCP government prefers to sponsor the home-grown ones.

No, one thousand time No. It hates internet as a whole.It tries, a lot of times, throwing a huge money to put its own players on the market, but mainly in the search engine space, like Remin, Jike, Pangu and the most recent, ChinaSo. Only after all these attempts turn out to be failures, it looks back and try to corporate with the private companies.

As a native Chinese, I think Wechat is a much better choice than Facebook, in a lot of ways. Imagine what would happen, when Facebook put their Facebook app, Whatsapp and Instagram together, plus gaming, mobile payment and other bunches of stuff. That is what WeChat is right now. And it is used by hundreds of millions of people. And that is impressive.

Tower of Babel in our lifetimes

Actually, Asian chat providers are some of the most innovative as they are the only ones truly experimenting with messaging platforms.

LINE was the first to make money with stickers (since copied by everyone and their dog).

WeChat is using their platform to sell life/health insurance http://qz.com/184783/cancer-insurance-is-wechats-newest-vira...

Western messaging systems on the other hand are all very vanilla. Now, everyone is stumbling over each other to add "snapchat" disappearing chats while LINE/WeChat are actually monetising.

+++

Users in APAC are also a lot more innovative in how they use these messaging platforms. There are dating/Tinder services built on top of WeChat.

Line is quite popular in Spain. It has 15 million users out of a population of ~45 million. Line is also quite popular in Taiwan and Southeast Asia along with WeChat collecting a lot of users outside of China in South Asia, Southeast Asia and Latin America (100 million outside of China). Cubie is a smaller instant messaging app from Taiwan (8 million) but has a lot of users in Southeast Asia and Latin America.

Your point on Rakuten is fair.

However I believe Chinese companies have a strong edge regarding the messaging market. Chinese users are much more early adopters when it comes to messaging apps which enable Alibaba or Tencent to test new ideas much faster. Now that competition is getting fierce in China, they are expanding aggressively elsewhere and thus bring their deep expertise in the messaging market to the US.

Tango's CTO Eric Setton just got $250M from Alibaba praised this strategic move saying that tapping into Alibaba will “bring a crystal ball into (their) boardroom… Asia has insight that is around a year ahead of the West right now” (http://thenextweb.com/mobile/2014/03/20/chat-app-tango-raise...)

Saying things like: "Asia has insight that is around a year ahead of the west" does not actually make it so. That sounds like nothing more than empty talk.

What stunning software products / innovations / market leaders came out of Asia in the last decade that didn't exist in the West or Silicon Valley either beforehand or at roughly the same time?

2 supporting facts on its censorship: 1. WeChat will notify you it “contains restricted words” if you include “Falun Gong“ in your message: http://thenextweb.com/asia/2013/01/11/tencents-wechat-comes-...

2. WeChat just deleted 3 weeks ago at least 30 popular accounts that distributed political and legal news articles http://online.wsj.com/news/articles/SB1000142405270230373080...

Facebook peaked they should be worried about everything.

agreed - they're venturing into the hardware business with Oculus, something very few companies managed to do properly

I'm a native Chinese and started to use Tencent's products 15 years ago. I'm using wechat as well since almost every Chinese I want to connect with has a wechat account.

Information based product, esp. with strong social context, is highly related with its user group. Even if every product in the narrowed domain is exactly the same. They evolve to different products later and may not a better fit for other user groups. And yes, the policy barrier set by the state is also a major reason to provide room to have some follower strategy products survive and grow strong. But market value is not a key indicator here. Money can not buy you anything, esp. in information industry, in which a lot of people know what a substitute product can do.

Also, if you want to worry about Tencent, just try their products to see how polished they really are yourself.

In case you are interested, Porter five forces analysis http://en.wikipedia.org/wiki/Porter_five_forces_analysis is a good framework and start to learn to have some idea of how to exam a market in a more logic way.

I'm not Chinese and have never heard of Tencent. I've heard of Facebook though. I think the fact that it's based solely in China and Chinese users would be a big barrier in being able to grow, as these social apps have a networking effect, in which case it works amongst Chinese but might have trouble with attracting non-Chinese speakers. just like if Brazil had their own popular app amongst themselves, it would have a hard time penetrating other countries.

I'm not Chinese and I'm not American. I have seen countless Tencent WeChat ads while watching tv and especially during Champions League football. I have never seen a Facebook ad on tv.

I guess I did not make my comment above very straightforward. I actually meant the opposite side. Regard of Tencent, there is nothing FB needs to worry about.

Tencent has been the elephant in the Global room for a long time. It sure took a long time to be recognised.

It is also the elephant in China, in a very nice way. Its success being based in Southern China seems testament to this. vs Baidu for example.

Google search for Tencent brings up this article. Not sure if I even found their real site.

Really? I guess this means that this is the first time DuckDuckGo actually has more relevant search results then Google.

http://i.imgur.com/HHngy0Q.png

(This comment is tongue in cheek. I use DDG as my main search engine but sometimes it can just be... frustrating.)

My best guess is that you accidentally searched Google News instead of the main Google search. The main Google search is giving me tencent.com as the first result and the Wikipedia article for Tencent as the second, followed by some news results including this article.

The consumer-facing sites are:

http://im.qq.com/ (Chinese)

http://www.imqq.com/ (International)

I cannot reproduce this issue.

It is: http://www.tencent.com/

If it's so big how come I've never heard of it but have of Facebook? It must be that outside of China and Chinese users, it's irrelevant. I honestly don't think Facebook has anything to fear unless the whole world became Chinese somehow. Personally, I don't want to use a service based in a communist country, NSA would be lesser of the two evils.

I don't get why this comment was downvoted. I find the fact that china is probably monitoring communications and data much more systematically than any other country ( because they are proficient technologicaly and a single-party country), a very good reason why people in general wouldn't want to use their service.

I would add to this comment that chinese themselves may very well prefer to use US services, because they may very well be the first target, should they decide to have different political views about their country.

It may help to consider a wider context.

More than 95% of the world population lives outside of the USA. How do they feel about using the services of American companies and the NSA?

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