Chinese Tech Company Combines Multiple App Types Into One — At Great Profit

Transcript

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Yesterday, we heard how a popular messaging app called WeChat is helping Chinese to organize in ways that they couldn't before. Now we'll hear about the app's maker, Tencent. It's one of the world's most valuable Internet companies, though it's not a truly global brand. NPR's Anthony Kuhn reports from Beijing on Tencent's rise.

ANTHONY KUHN, BYLINE: "Blade Of The Three Kingdoms" is Tencent's most frequently downloaded game these days. You can download it for free, but to upgrade your blade you need to pay the equivalent of a few cents or a few dollars. You can find the games through Tencent's two popular messaging apps, WeChat and QQ. Together they have over a billion users, so if even just 1 percent of them pays a buck each to upgrade a weapon, Tencent still rakes in $10 million. Hong Bo is a Beijing-based tech blogger. He says that among the world's big Internet companies, only Tencent makes most of its money from consumers, not advertising.

HONG BO: (Through translator) Many people didn't think this model could achieve any significant scale. Tencent is the first to prove that they could make this their primary business model and achieve a market value of over $100 billion.

KUHN: Both Tencent's revenue and market value have now surpassed those of Facebook. This has made Tencent's 43-year-old founder, Ma Huateng, one of China's richest men. Ma means horse in Chinese and he goes by the English name of Pony. Tencent declined requests for an interview. Speaking to state television last year, Pony Ma described how he sees Tencent evolving.

(SOUNDBITE OF ARCHIVED RECORDING)

MA HUATENG: (Foreign language spoken).

KUHN: What we want to do is become an economic system - a platform, he says. We want to invite our partners on to that platform to develop new services.

In other words, Ma wants Tencent to cater to Internet users' every need so Tencent has been buying up shares in other Internet companies, trying to create a company that's WhatsApp, PayPal, Uber, Amazon and Yelp all rolled into one. Internet industry analyst Xie Wen points out that combining all those functions into a seamless whole is, technically speaking, a very tall order.

Xie Wen: (Through translator) Tencent's weakness is that its content is too jumbled. It has too many services and products. It hasn't even integrated its messaging apps, QQ and WeChat. So Tencent faces the biggest challenge among its peers.

KUHN: Tencent's main Chinese rivals are the search engine Baidu and the e-commerce giant Alibaba. They too are snapping up smaller companies, trying to construct their own one-stop shops. They haven't done very well either in getting a foot in the door of Western markets. Tech blogger Hong Bo says differences in language, culture and politics will take years for them to overcome.

BO: (Through translator) I think most Chinese firms see the American market as their final destination - the place they ultimately want to get access to. But it's very difficult for them to do that at this stage.

KUHN: Huong notes that like its Chinese peers, Tencent got its start copying foreign technologies. But he says that they have since improved on and surpassed those technologies. He says that Tencent is now capable of real innovation and for that, it is worth watching. Anthony Kuhn, NPR News, Beijing. Transcript provided by NPR, Copyright NPR.