Tencent Holdings Limited provides Internet, mobile, and telecommunication value-added services in China. The Company has an instant messaging community in China. Tencent also provides online advertising services.
In Sohu's case, the rumor mill might also be helping out. A source tells Marbridge Consulting Sohu CEO Charles Zhang and Tencent (TCEHY +1.2%) CEO Pony Ma have talked about merging their companies' online video units. Both Sohu and Tencent trail market leaders Youku and Baidu in China's burgeoning online video market.
Dangdang (DANG +8.6%) is adding to yesterday's big post-earnings gains after Oppenheimer hiked its PT to $15. The firm likes Dangdang's improved efficiency and partnerships with e-commerce rivals (inc. Alibaba's Tmall), and the fact mobile accounted for 13% of Q4 orders.
The WSJ reportsSina (SINA +4.5%) is planning a $500M Q2 IPO for Weibo, and has hired hired Credit Suisse and Goldman to handle the offering.
The paper adds Alibaba (ABABA) will likely up its stake in Weibo to 30% from its current 18% (purchased last year for $568M) in the event of an IPO. Sina currently owns 71% of Weibo, a stake Barclays thinks is worth $4.1B; the company's total market cap currently stands at $5.1B.
Sina has made huge strides in monetizing Weibo in recent quarters. The microblogging service's ad sales rose 46% Q/Q and 125% Y/Y in Q3 to $43.7M, and its value-added service revenue rose 26% Q/Q and 121% Y/Y to $9.7M.
At the same time, Weibo's engagement rates have been pressured by the manic growth seen for Tencent's (TCEHY) WeChat mobile messaging platform. Weibo had 60.2M daily active users at the end of Q3, +11% Q/Q. WeChat ended Q3 with 271.9M monthly active users, +15% Q/Q.
Sina might make an official announcement in tandem with this afternoon's Q4 report.
TD observes Facebook is paying $42/user for WhatsApp ($19B for 450M MAUs), and that assigning a similar multiple to BBM's 80M MAUs would make the business worth $3.36B ($6.41/share). But (while believing the deal highlights the value of messaging platforms) it doesn't think BBM and WhatsApp's valuations are "really comparable," given the latter's smaller scale.
Wells Fargo notes another messaging platform, Viber, was recently sold at a price of $8.57/user ($900M for 105M MAUs), and is skeptical BlackBerry will try to sell BBM rather than monetize it.
While BlackBerry rallies on account of the deal, WhatsApp rivals Tencent (TCEHY -3.2%) and Naver (NHNCF -8.1%) have sold off overseas on worries about tougher competition. Tencent's WeChat is the dominant mobile messaging platform in China, and Naver's Line rules the roost in Japan.
Yesterday: BlackBerry rises AH due to Facebook/WhatsApp
Chinese government agency CNNIC estimates Sina's (SINA -3.9%) Weibo user base fell 9% in 2013 to 281M, thanks to tough competition from Tencent's (TCEHY) WeChat mobile messaging platform.
Sina, which has admitted in the past WeChat's rapid growth is pressuring Weibo engagement, had 60.2M Weibo daily active users in Q3. WeChat had 271.9M monthly active users as of Q3 (not an apples-to-apples comparison), and has 600M+ registered accounts, including over 100M outside of China.
Altogether, CNNIC estimates China had 617.6M Internet users at the end of 2013, and 500.1M mobile Web users.
The service will be aimed squarely at Chinese online/mobile gaming leader Tencent (TCEHY), and will give developers a hefty 70% cut. Alibaba also plans to integrate the service with its Laiwang messaging app (competes with Tencent's dominant WeChat) and the mobile app for its Taobao e-commerce platform.
In addition to Tencent, Alibaba will be taking on a slew of other mobile game distributors, including NQ Mobile's (NQ +1.7%) FL Mobile unit.
Chinese game developer Perfect World (PWRD +10.1%) has skyrocketed in morning trading. Peers Changyou (CYOU +4.1%) and NetEase (NTES +3.5%) are also up sharply.
Also: Alibaba's Alipay online payments unit has struck a deal with Sina (SINA +1.5%) to allow Weibo users to make online and offline payments via Alipay. Sina investors have been expecting the company's partnership with Alibaba (bought an 18% stake last year) to yield service launches that would improve Weibo monetization.
Two months after BlackBerry (BBRY) officially launched iOS and Android BBM apps, the apps are still appearing the iPhone's top-5 free download rankings for the U.K. and Argentina, and have topped iPhone free download charts in Indonesia, Nigeria, and South Africa. The app has also reached #24 in India.
Indonesia, Nigeria, and South Africa have long been BlackBerry strongholds. The company's Indian smartphone share has been relatively small.
Meanwhile, mobile analytics firm Mobidia estimates BBM's weekly usage in markets falling into its "Other Asia-Pac" segment (excludes China, Korea, India, and Japan) is above 100 minutes. That puts it ahead of major rivals such as Tencent's (TCEHY) WeChat, Line, Viber, and Kakao (curiously, no numbers are given for the wildly popular WhatsApp).
In China, where WeChat claims hundreds of millions of users, Tencent's app fares notably better, sporting average usage above 150 minutes.
BlackBerry disclosed last week it has added 40M+ registered iOS/Android BBM users since October. However, the company is taking a gradual approach to monetization; CEO John Chen says he expects "reasonably good revenue" from BBM around the FY16 timeframe.
Tencent (TCEHY +0.2%) will launch a smart TV in China that features controls and payment integration with the Chinese version of WeChat, Weixin. Tencent has poured $260M thus far in developing its financial services offerings, including WeChat Pay - the new product launch seems to be a move to monetize the app's enormous (and exploding) user base.
No details on pricing have been released, but the company notes the TV will be released before the Chinese New Year (Jan. 31).
Looking ahead, Tencent plans to introduce content-sharing features and roll out user-generated content on the platform.
Tencent (TCEHY +1.1%) has invested RMB1.6B ($260M) in multiple of its companies in the Qianhai Shenzhen-Hong Kong Economic Zone involved in internet finance, Tencent's WeChat Pay, equity investment, and forex exchange services.
Tencent has further plans to invest no less than RMB10B ($1.65B) in the economic zone.
As SA contributor Fusion Zone wrote last week, SINA and Baidu are lurching into financial services as well.
Facebook's $3B and Google's $4B acquisition attempts were reportedly rebuffed, but Tencent (TCEHY) got in as an undisclosed minority investor in Snapchat's last $60M round, TechCrunch writes.
The Chinese giant was allegedly mulling over another investment in the app maker last month as well, this time in a potential $200M round that would value the company at $3B-$4B. The move follows a similar line Tencent took in its expansion bid in South Korea, where it acquired a 14% stake in leading messaging app Kakao Talk.
Tencent (TCEHY) is considering an investment in ephemeral photo messaging app maker Snapchat, The WSJreports. Snapchat is said to be looking to raise up to $200M at a valuation of $3B-$4B. It has already scored $73M in venture funding, most recently hauling in $60M in June.
Founder Evan Spiegel has been open about his admiration of Tencent and its monetization strategy on a number of occasions. Tencent's own foray into messaging, WeChat, boasts 236M active users.
Tencent has ramped up its overseas investments as of late. It has invested over $2B to create a portfolio that includes start-ups such as Fab.com, Everyme, Ark, Sonalight, Loom, Watsi, Couple, and Waddle.
While a relationship could aid Snapchat in an effort to gain a foothold in Asia and monetize its user base, Tencent stands to benefit from expanding its reach in mobile as it battles Alibaba and Baidu.
A day after Delaware's Supreme Court cleared the way for the deals to proceed, Activision (ATVI +0.2%) says it has closed its $5.83B, $13.60/share leveraged recap deal with Vivendi (VIVHY.PK), and that Vivendi's sale of $2.34B in shares (also at $13.60/share) to an investment group led by Activision's CEO and co-chairman has also been finished. (PR)
Not surprisingly, Activision predicts the leveraged recap, which was financed via $4.75B in debt (average interest rate below 5%) and $1.2B in existing cash, will be immediately accretive to EPS.
The two deals leave the investment group, which also features private investment firms and Chinese online gaming giant Tencent (TCEHY.PK), with a 24.7% stake in Activision. Vivendi retains a 12% stake.
China's State Council says gaming consoles, banned since 2000, will be allowed for sale provided they're approved by the Ministry of Culture. The decision opens the door for Microsoft (MSFT +1.1%), Sony (SNE -0.7%), and Nintendo (NTDOY.PK) to begin officially selling their hardware in the Middle Kingdom.
Unofficially, the hardware hasn't been hard to find on the black market, with sellers typically hawking modified systems that support pirated games. However, the government's decision should open the door for console makers and game developers (EA, ATVI, TTWO) to formally market their wares, replete with Chinese-language translations.
Aside from piracy, China's well-established online gaming scene will serve as a challenge for console makers and game developers. Some of the online gaming firms they'll be competing against: TCEHY.PK, NTES, GA, GAME, PWRD, CYOU.
In what could be a trial balloon, the Chinese government plans to lift its ban on "politically sensitive" foreign websites in Shanghai's new free-trade zone, according to government sources talking to Hong Kong's South China Morning Post. Facebook (FB +4.7%), Twitter, and the New York Times are among the sites that will reportedly be made accessible.
In addition, the government plans to allow foreign carriers to bid for licenses to provide Internet services in the free-trade zone. State-owned carriers China Mobile (CHL -0.8%), China Telecom (CHA -1.8%), and China Unicom (CHU -2.8%) have all reportedly been informed foreign companies will be able to compete with them in the area.
For now, the zone only covers 29 sq. km. But sources state it could eventually cover Shanghai's entire Pudong business district (1,210 sq. km), home to the Shanghai Stock Exchange and arguably China's most vital commercial hub.
The report comes shortly after Facebook COO Sheryl Sandberg met with Chinese Web regulators. China already has a well-developed social networking scene, with Tencent (TCEHY.PK) and SINA claiming hundreds of millions of registered users for their respective platforms.
Though Tencent's (TCEHY.PK, TCTZF.PK) acquisition of a 36.5% stake in Sohu's (SOHU +6.9%) Sogou search unit stands to make Sogou a greater threat to Baidu (BIDU +2%), given Tencent's plans to promote Sogou throughout its messaging/gaming empire, Baidu investors appear relieved Qihoo, which was in talks with Sohu, didn't end up reaching a deal.
Research firm CNZZ recently estimated Qihoo now has over 15% of the Chinese search market, and the company itself recently pegged its share at 20%. Acquiring Sogou (estimated 8.8% share) would've given Qihoo additional scale and resources as it challenges Baidu's dominant position.
Meanwhile, Tencent rose 2.5% in Hong Kong overnight, before the Sogou deal was announced. The company's market cap has topped $100B.