For people outside China, if they have to choose one animal that the Chinese are most familiar with, probably most of them would go with giant panda. However, there is one penguin that almost every Chinese netizen knows. It is the penguin being used as mascot in the instant messaging software, QQ.
QQ is the most popular instant messaging tool in Chinese community. Notice that I did not use “one of”, because QQ stands out too much to have any strong competitors. Nearly every Chinese Internet user has at least one QQ account. And the company behind QQ is Tencent.
The founder of Tencent is Mr. Ma Huateng (马化腾), one of the top ten richest men in China, according to Forbes. In 1998, Shenzhen, he founded the company named after himself, “Teng Xun (腾讯)”, where Xun means “communications”. I have no idea, since when the English name of this company became Tencent. But I bet Mr. Ma is too busy counting money to be ware of western culture, otherwise he wouldn’t name its own company as one fifth of a rap singer. One thing for sure is, the market value of Tencent is more than five times the value of that singer. In fact, with approximately 150 billion, the market value of Tencent is already close to Facebook.
So how did the story start? Similar with many Chinese startup companies in the 90s, Tencent started by copying other people’s idea. The idea they copied was ICQ (short for “I seek you”). When I asked my wife if she knew the software ICQ, she gave me a negative answer, which immediately made me feel old. If you do not know ICQ, it is perfectly normal, because nowadays people have so many alternatives. But back in the 90s, where people still wrote letters, with pens, ICQ was revolutionary. The instant messaging software gave people a whole new experience with Internet. Therefore, ICQ accumulated a large number of users in just a few years. However, it was not localized in China at all. The English user interface stopped Chinese people from using it. I had an ICQ account when I was in high school. But I did not have a very good command of English language. It took me a while to realize a person randomly added me as contact was a prostitute. She was the one who got disappointed anyway.
That was a perfect chance for Mr. Ma to establish his business. Less than three years after ICQ was released, Tencent developed their messaging software, and named it as OICQ (Oh, I seek you?). Of course, they received a letter from the attorneys of AOL, the owner of ICQ, demanding them to change the name. Finally, the name became QQ.
It was an era that China was experiencing a dramatic change in social structure. The beginning of an unprecedented urbanization that brought massive amount of people away from their home town to start a new life. People were eager to get connected with their old acquaintances and to meet new friends. Hence, even after the dot-com bubble busted, the number of users of QQ kept rising. In 2010, the number of simultaneously online users reached 100 million, larger than the population of Germany.
With the messenger monopoly, Tencent started to build its own ecosystem and extend its business. At first, Tencent brought many apps like QQ games, QQ pet, etc., within its QQ framework. After that, targeting the under aged, Tencent announced their VIP service. With just a few Yuan, people can get a “prestigious” VIP account with “diamonds”. Please don’t ask me, I never spent my money on that, nor do I know the use of those “diamonds”. But there is a good story about the VIP services.
One part of Tencent’s revenue is generated by advertisement. And VIP services include an ad-blocker. Moreover, as VIP users, people are able to detect the invisible contacts. These are quite useful features, at least for some people. In 2001, a smart guy came up with an idea of creating an add-on of QQ, which could provide exactly the same service, except, it was for free. The add-on was called “CoralQQ”. In the first a few years, CoralQQ was tolerated by Tencent, because it was attracting more people to become users of QQ. Tencent even invited the founder of CoralQQ to its third party developers’ convention. However, when QQ achieved monopoly, they sued this developer in 2007, and successfully put him in prison for three years. The accusation was infringement of copyright. Ironic, isn’t it?
Anyway, with the huge earning and user number from QQ, Tencent started to expand to other business area. In 2010, Tencent force its users to upgrade the QQ doctor app to a full security suite, without noticing the users during the installation process. Since network security is the specialty of another Chinese Internet company named Qihoo 360, one month later, a war started.
The media used to call this incident the war of 3Q (360 v.s. QQ), whereas I called it the war on the lower right corner, because they both have icons on the lower right corner of the desktop. Qihoo is a company which practically reinvented malware in China (the notorious 3721 Internet Assistant, I just realize they are very fond of using numbers as software names). At that time, Qihoo had a free security software called 360 Safeguard, which had also a large number of users. It does not take a genius to figure out that this war would never go well.
Very soon, each of the companies started to upgrade their software with the sole purpose of making it to be more incompatible to their competitor’s. 360 provided services to uninstall the app bundle that is bound to QQ. And QQ sent its most infamous message to all of its users. I quote this message as follows: “When you are reading this letter, we just made a very tough decision. Before 360 retracts its offensive add-on for QQ and stops malicious accusation, we decide to stop QQ from running on any PC, which has 360 software installed. We know that it will cause you some inconvenience and we sincerely apologize for it. Meanwhile, we listed the reason for our decision and hope for your understanding and support…” Of course, they did not tell, as a messaging software, how QQ could detect which PC has 360 software installed. And for a period, I think this letter was mocked on Internet more times than the Fuehrer. Everyone was making a “very tough decision”. This war kept upgrading until the government was finally involved. During that period, many users could only use either 360 Safeguard or QQ, but not both. Many other companies either chose side or took advantage of this war. I personally got a key to use Kaspersky Internet Security for free for one whole year. Cannot really complain.
As the mobile industry started to take off, Tencent extended their business into this field also. And this time they did it right. Dated even before Tencent was founded. Mr. Zhang Xiaolong single handedly developed a mail client Foxmail in 1997. I was one of the first users of this software, and was still using it one year ago, before I found the tech support was not available in English. In 2005, Foxmail was purchased by Tencent, along with a developer team led by Zhang. Later Zhang and his team developed the mobile chatting app of WeChat. Remember the Facebook WhatsApp deal? According to CLSA Asia-Pacific Markets, the estimated value of WeChat is three times as high as of WhatsApp.
Please do not misinterpret this story as a criticism of Tencent. Even the company, which has a motto of “don’t be evil”, is giving the information of its users to NSA, I genuinely do not believe fairytales that tell you Internet companies are all about honesty and integrity. While all the Internet companies are claiming that they are making the world a better place, I actually respect Tencent as a true survivor of the law of the jungle.
One of my friends working in the Internet industry told me that Tencent can give a million dollar check to a college graduate, if they value his work. With this momentum and the ruthlessness to its competitors, I do think Tencent will keep its position as the top Chinese Internet company for a long time.