Tencent is one of the leading Chinese IT companies. It makes the very popular free Chinese chat program QQ and the company is therefore generally called QQ. Tencent started in 1998 as an open ICQ version, but has since developped many services ranging from a video site , to forum site , games site , ringtones and so on. All of those sites are linked to the main portal of QQ : qq.com

Photo of the Tencent main entrance, taken a few days before Chinese New Year 2010

Working at Tencent

Currently I am working in Tencent as one of only very few foreigners (in fact, most of the time I'm the only Westerner in Tencent's Shenzhen headquarter).  I really enjoy working in this company, although communication is always very hard since my Chinese is very limited. Thankfully most colleagues can and are willing to speak English with me. As a foreign employee of Tencent, I hope I can help other foreigners with some tips about Tencent. It's not just an IM program in China, it's a whole lifestyle here and there are so many interesting products that are difficult to appreciate because of the language barriers. On this page you will find some background information about Tencent. If you are also interested in working for Tencent, please read this article first.

Usage

Tencent currently has over 741.7 million (early 2008) registered QQ accounts with about 300 million active accounts! These are very impressive numbers, but the chances are pretty good that most foreigners have never heard about QQ. Almost all of Tencent's users are from China. There are also users in other parts of Asia and in South-Africa. IM usage seems to depend heavily on the part of the world where you live. In the Netherlands it is MSN for example, here in China it's QQ.

Offices 

Tencent's headquarter is in Shenzhen. Tencent operates from several buildings in and around the high-tech park in Nanshan, but currently Tencent is building it's own office near the Nanshan police station it is scheduled for completion at the end of 2008/early 2009. Besides Shenzhen, Tencent has offices in all the other major cities such as Beijing, Shanghai, Chongqin and so on. It also operates IDC's (Internet Data Centers, or servers) in many locations all around China. Actually I have no idea where, but there are many locations. This is of course inevitable when you have over 200 million active users. There are several thousand people working for Tencent in total, but I'm not sure what the exact number is. With the expected growth of the Chinese market, I'm sure this will only increase. 

 

Merchandise and Advertising

One way of revenue for Tencent is selling qq coins, or virtual money. With this virtual money, users can buy services online such as ringtones, games, but also use premium memberships, more storage online and so on. Another important source of income is advertising via the IM and the QQ frontpage. If you would like to advertise on qq.com or inside the QQ messenger, you can contact me and I can get you into contact with the people from the advertising department. Tencent also does advertising for specific products like 7up.qq.com .

Tencent Advertising

(added Februari 2010) Tencent offers several advertising opportunities to its clients. Most well known is obviously the qq.com portal website, but you can also advertise inside the QQ client for example. Advertising can be customized to certain groups of users as well. For more details about advertising, please contact the advertising team in Shenzhen or Beijing (scroll down the page to "Advertisement & co-operation". Do keep in mind that Tencent is a very big company and it's not cheap to advertise on the frontpage of QQ. Usually big companies such as Nike and Coca-Cola advertise on those positions, but there are also options for smaller budgets. The official (Chinese) website about advertising is Tencent Mind. This website also offers quotes for advertising.

Currently, you can advertise on :

• qq.com
• QQMusic
• QQ Instant Messenger
  
• Qzone
• Several applications
• QQShow
• QQ Live video

Tencent Game Studios

(added Januari 2010) Even though Tencent is famous for the QQ instant messenger, there are many more important products. One of those is the growing games market. Tencent now has eight games studios :  five in Shenzhen, one in Chengdu, one in Shanghai and one in Boston. The studios in Shenzhen work on "QQ Free Fantasy Online", "QQ Speed"&"QQ Tang", "QQ Mini Game Portal ", "QQ Penguin" & "QQ Bear " and " Dungeon&Fighter" & "Cross Fire". The team in Chengdu works on "QQ Three Kingdoms" and the teams in Shanghai and Boston are working on undisclosed projects :)

Future plans 

In the second half of 2008, Tencent plans to expand it's business significantly in the gaming market in China. Currently Tencent is ranked 5th in this market (after for example Shanda and Netease). Tencent plans to boost its staff by a fifth and rank among China’s top three online gaming operators by the end of 2008. Other plans include diversifying from IM and entertainment into e-mail and improving the search engine (soso.com).

source:

Tencent plots expansion, takes on Shanda (SZDaily June-9-2008)

Financial results 2007 

Tencent released the financial results for 2007 at the 19th of march 2008. Key numbers are:

• 300 million active IM accounts
  
• 741.7 registered QQ accounts
  
• 523.1 million USD revenue over 2007 (36% increase over 2006)

Most remarkable is the distribution of the revenues:

• Internet services (games, pets, etc): 344 million USD (66%)
• Mobile services: 110 million USD (21%)
• Online ads: 67 million USD (13%)

See this link for more indepth analysis:

QQ announces 2007 earnings | Facebook should look carefully

Tencent Announces 2008 Interim and Second Quarter Results  (pdf)

Highlights for the First Half of 2008:

• Total revenues were RMB3,032.7 million (USD442.1 million1), an increase of 84.8% over the firsthalf of year ended June 30, 2007 (“YoY”)
• Revenues from Internet value-added services (IVAS) were RMB2,035.8 million (USD296.8million), an increase of 94.2% YoY

Highlights of 2008 (unaudited ):

• Total revenues were RMB7,154.5 million (USD1,046.8 million[1]), an increase of 87.2% over the year ended December 31, 2007 ("YoY") -- Revenues from Internet value-added services (IVAS) were RMB4,915.0 million (USD719.1 million), an increase of 95.5% YoY -- Revenues from Mobile & telecommunications value-added services (MVAS) were RMB1,399.0 million (USD204.7 million), an increase of 73.2% YoY
• Revenues from Online advertising were RMB826.0 million (USD120.9 million), an increase of 67.5% YoY
• Gross profit was RMB4,984.1 million (USD729.2 million), an increase of 84.4% YoY. Gross margin decreased to 69.7% from 70.8% last year
• Operating profit was RMB3,246.0 million (USD474.9 million), an increase of 98.5% YoY. Operating margin increased to 45.4% from 42.8% last year
• Profit for the year was RMB2,815.7 million (USD412.0 million), an increase of 79.6% YoY. Net margin decreased to 39.4% from 41.0% last year
• Profit attributable to the equity holders of the Company for the year was RMB2,784.6 million (USD407.4 million), an increase of 77.8% YoY
• Basic earnings per share were RMB1.552. Diluted earnings per share were RMB1.514.
• The Board of Directors has recommended a final dividend of HKD0.25 per share for the year ended December 31, 2008 and a special dividend of HKD0.10 per share to celebrate the 10-year anniversary of the Company, subject to the approval of the shareholders at the Annual General Meeting to be held on May 13, 2009. The proposed dividend will be payable on May 27, 2009.
  

Mr. Ma Huateng, Chairman and CEO of Tencent, said, "In 2008, Tencent delivered strong financial and operating results, leveraging our diversified, platform-based business model which is unique in China's Internet market. We are also excited to see that, during the year, China has become the largest Internet market in the world by number of users and that Internet has increasingly become an indispensable part of everyday life for people in China."

"While we continue to see significant long-term potential in the Internet market, we are conscious of the potential negative impact of a slowing economy and intensifying competition in the market. Our online advertising business will experience particular pressure as advertisers reduce or delay their advertising budget, while our user-paid small ticket based entertainment and membership services will be relatively more resilient. To navigate through this challenging macro environment and position the Company for future growth, we will manage our business rigorously while continuing to make necessary investments in our platforms and our people," he added.

External links 

By far the best source of information about Tencent/QQ by 'Plus Eight Star'.Very detailed and lots of good pictures to make it interesting to read:

http://www.plus8star.com/Inside_QQ_Sample.pdf

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