Internet

QQ rakes in cash

Benjamin Joffe of Plus Eight Star, an Internet and mobile consulting firm, looks at the 2007 results of Tencent, the company that operates QQ, China's most website / instant messaging / gaming platform.

QQ announces 2007 earnings | Facebook should look carefully

QQ’s 2007 figures:

* Active accounts: 300 million
o This is 50% more than the number of Internet users in China (many have multiple accounts)
o This is about the size of the US population
* Revenues: 523 million USD
o This is close to 4x Facebook, at 150 million USD
o This is real money from IM/SNS. Something even serious companies like The Economist who just wrote an article titled “Everywhere and nowhere” seem to not believe is possible. We hope they will look outside of Silicon Valley next time.
* Operating profit: 224 million USD
o Facebook recorded a 50 million loss last year. How sad.

Though this should already be enough to raise a bit of interest, the most interesting is the split of revenues:

* Internet services (digital goods, games…): 344 million USD (66%)
* Mobile services: 110 million USD (21%)
* Online ads: 67 million USD (13%)

There are currently 6 Comments for QQ rakes in cash.

Comments on QQ rakes in cash

why the comparison with Facebook?

the two companies and their respective bundles of services strike me as two wholly different ventures in two wholly different markets.

moreover, QQ was launched nearly a decade ago, while Facebook has only just entered its 4 year of operation.

is there something i'm missing here other than Benjamin Joffe (any relation to the disgraced Benjamin Joffe-Walt?) of Plus Eight Star's frail attempt to grab the attention his potential clients a la the tired "forget everything you *think* you know about China and teh internets...."?

full disclosure: i use neither QQ nor Facebook.

Both companies QQ and Facebook are involved in social networking. Instant Messaging, QQ space and discussion groups look to me very similar to Facebook features but just displayed in a different manner.

QQ and FB are still worlds apart. To make this post meaningful I need to know where the revenue came from broken down by channel. Are we talking banner ads in SNS/Social Media?

It does make sense to compare Facebook and QQ. Like Flex said: they are both operating in the social networking market. It also makes sense because Facebook is getting heaps of attention in Western media. Thus it is good to contrast the 'remarkable' success of Facebook with the success of some Asian companies such as Tencent/QQ.

With Facebook coming to China and with Tencent expanding their services, this comparison only makes more sense. I thought the split of revenues was also interesting.

The post being a short extract of the more complete presentation I did recently, please refer to: link

To answer some of the points raised:

(1) Services are different
This is precisely what we find interesting and where to learn from.

(2) QQ started 10 years ago, FB only 4.
That's right.

(3) Disgraced?
I do not know if Benjamin Joffe-Walt is a distant cousin, but we have not worked together so far.

(4) Where the revenue comes from
Please read our complete post or QQ's announcement

(5) Western Media
Though FB is certainly doing a great job, we think there are actually things to learn from Asia and we work at contrasting the "copy" stigma. For more info, please refer to various presentations we share at: link

As QQ is completely embedded in Chinese culture and is what ties together young people socially online, there is every reason to draw the link between Facebook and QQ.

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