{"id":550427,"date":"2006-10-06T07:17:37","date_gmt":"2006-10-06T07:17:37","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/550427-attracting-eyeballs.html"},"modified":"2006-10-06T07:17:37","modified_gmt":"2006-10-06T07:17:37","slug":"attracting-eyeballs","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/550427-attracting-eyeballs.html","title":{"rendered":"Attracting eyeballs"},"content":{"rendered":"

But next to QQ, MySpace<\/a> is small fry. QQ boasts almost half a billion registered users, of which 224m are active \u2014 that means that nearly one in five people in China uses the service. QQ\u2019s Web portal also generates more Web traffic than MySpace, according to Alexa Internet, which tracks the popularity of the world\u2019s websites. <\/font><\/p>\n

QQ<\/a> is fifth in Alexa\u2019s Web rankings; MySpace is sixth. MySpace is owned by Rupert Murdoch\u2019s News Corp Murdoch, an Australian known for his conservative political views, has been lauded for his pioneering investment in MySpace. <\/font><\/p>\n

Yet, in China, it is QQ owner Tencent Holdings, which is 36%-owned by SA media group Naspers, that rules new media. <\/font><\/p>\n

Though Murdoch has enjoyed some success in China with his Star pay-TV service, when it comes to new media in China, it\u2019s Koos Bekker, not Rupert Murdoch, who rules the roost. <\/font><\/p>\n

\u201cWe were very lucky,\u201d says Antonie Roux, CEO of MIH\u2019s global Internet business. MIH is the operations arm of Naspers, with interests in more than 50 countries comprising pay-television platforms, Internet operations, instant messaging (IM) services and related technologies. <\/font><\/p>\n

Naspers acquired a stake in Tencent in June 2000, not long after the dot-com bubble had been pricked. \u201cTencent was looking for a final round of funding. We had an opportunity to buy a stake in what was then a privately held company. We bought in when they were just starting to gain traction [with QQ].\u201d <\/font><\/p>\n

Roux says that at the time Tencent\u2019s revenues were virtually nonexistent but that the company was winning the important race for consumers\u2019 \u201ceyeballs\u201d. <\/font><\/p>\n

With the early pain absorbed, Naspers is now smiling all the way to the bank. In the six months to June 30 2006, Tencent recorded a profit of about US75m on revenues of $171m (at current exchange rates). <\/font><\/p>\n

From earlier investments, Naspers had learnt that sending SA expatriates to China to try to run investments there was not the right approach. <\/font><\/p>\n

\u201cWe cannot think like Chinese consumers,\u201d Roux says. \u201cWe made a mistake because we didn\u2019t realise that at first.\u201d <\/font><\/p>\n

With Tencent and QQ, Naspers has taken a hands-off approach. Tencent has 2900 employees, all of whom are Chinese. Naspers\u2019s only representation is two directors who sit on the Tencent board. \u201cWe have assisted them in top-level stuff but can\u2019t take credit for what they have achieved. We can\u2019t even speak the language,\u201d Roux says. <\/font><\/p>\n

Explaining why he thinks QQ has become so popular, Roux says that unlike other Asian markets, such as Japan and Korea, console gaming never took off. \u201cIf you play console games, you don\u2019t meet other people. Single-child families in China may have contributed. IM from early on was seen as a social network. QQ originated out of the desire of the Chinese to communicate with one another,\u201d he says. <\/font><\/p>\n

Because IM applications show people when their friends or family are online \u2014 a concept known as \u201cpresence\u201d \u2014 it gives them a sense of belonging. IM, Roux says, proved to be the embryo of a vast social network in China. <\/font><\/p>\n

QQ now provides people with games, virtual pets and virtual homes. It operates payment platforms and its own, vast, eBay-type auction system. It has become the biggest Web media portal in China. <\/font><\/p>\n

Though QQ was not first to market, it has been the most successful new-media company. Roux attributes this to the speed with which Tencent reacts to its users\u2019 needs and demands. \u201cI have never seen a company that lives so close to its users,\u201d he says. <\/font><\/p>\n

QQ makes money from advertising \u2014 on the portal and the IM client application \u2014 as well as from subscription fees for various products. It runs the biggest casual gaming portal in China. It also makes money from ringtone downloads and picture messages. <\/font><\/p>\n

Almost 15m QQ users pay for value added services; another 10m cough up a monthly subscription to use QQ\u2019s IM application on their cellphones. <\/font><\/p>\n

Efforts to expand outside China have not proved particularly successful. A scaled-down English version of QQ was launched in SA a few years ago but didn\u2019t take off. \u201cThey haven\u2019t done any work in the past four years on the English version,\u201d Roux says. <\/font><\/p>\n

Roux does say, though, that Naspers is eyeing the vast Indian market and hints that an announcement about expansion in India could be forthcoming soon. (Naspers has already said it is eyeing opportunities in print media in both India and Russia. It recently opened offices in New Delhi and Moscow. See story on page 50.) <\/font><\/p>\n

It\u2019s possible though unlikely, then, that Naspers could find itself in competition with MXit Lifestyle. The SA mobile IM company has identified India as one of the markets it might venture into (see main story). <\/font><\/p>\n

MXit, however, is focused exclusively on IM for mobile devices, whereas QQ is broader.<\/font> <\/p>\n

Discuss this article<\/a> <\/font><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s bigger than YouTube It\u2019s bigger than eBay Heck, it\u2019s even bigger than MySpace It\u2019s called QQ and you\u2019d be forgiven if you admitted you\u2019d never heard of it. Most people outside China haven\u2019t.<\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-550427","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/550427"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=550427"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/550427\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=550427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=550427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=550427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}