Baidu and its rivals (4) - Tencent

Note: This article is reprinted from "Playing the Violin to Cows", authored by Hong Bo. Please acknowledge the source if you choose to share it further.

In July 2006, Tencent CEO Pony Ma attended the "Baidu World" conference with much fanfare, supporting Robin Li, seemingly declaring a good relationship between the two companies to the outside world, akin to the relationship declared by British Prime Minister Chamberlain in Munich with Hitler in 1938. However, I believe that on each company's respective monitoring lists, the other occupies a very prominent position. In other words, Baidu and Tencent are bound to clash at some point, just like Britain and Germany during World War II.

If there were a ranking of the most favored companies by young Chinese internet users, Tencent and Baidu would undoubtedly be the top two. In eight years, Tencent transformed a small software program that was not initially well-received by everyone into the world's most active online community, boasting 232.6 million active accounts and 24.5 million concurrent online users. Its market capitalization of HK$47 billion (US$6 billion) is approximately 1.8 times that of Baidu. Starting last year, Baidu began to significantly strengthen its community building efforts. Leveraging the enormous success of MP3 search and Tieba (a forum), Baidu gradually expanded into areas based on human interaction such as personal spaces and social circles. Baidu is transforming itself from merely being an information tool for users into an activity platform for netizens. In essence, Baidu is gradually moving away from the Google model and adopting the Tencent model.