China’s Tencent Sees Market Cap Hit $66 Billion, Passes Facebook [UPDATED: Not Yet!]
Mark your calendars: China’s social media giant has surpassed America’s leader in terms of the total value of their shares. Yes, Tencent’s (HKG:0700) market cap is greater than Facebook’s (NASDAQ:FB) right now, with Tencent’s market capitalization currently at HK$419.84 billion –
that’s US$66.6 billion – compared to Facebook’s $62.24 billion.
[UPDATE July 20th: Thanks to a reader for pointing out that I hit the wrong currency conversion option, using Chinese RMB rather than Hong Kong dollars. So, doing the correct conversion, the Tencent market cap was actually $55 billion yesterday, still somewhat short of Facebook's level. Sorry for the false alarm. But it's going to happen soon!].
Tencent listed on the Hong Kong Stock Exchange in June 2004 priced at HK$3.70 per share. It’s trading right now at HK$228. It’s a significant moment for Tencent, which runs a number of social services in the country that are the biggest in their field: the biggest in social gaming; the biggest in group messaging apps with WeChat; the biggest in instant messaging with QQ, the biggest in online profiles with QZone; and the biggest in microblogging with Tencent Weibo .
If we look at the country’s top social services – in this excerpt from an infographic on China’s rising social media – you’ll see that three of them are Tencent’s:
But Tencent is not invincible. It has struggled in a number of crucial areas as well. One of the biggest failures has been in e-commerce where its own efforts – with Paipai for C2C selling, and QQ Buy for B2C and online storefronts – have come to little, and been out-gunned by Alibaba’s Taobao and Tmall sites. In mobile, too, it hasn’t co-ordinated quite the same coherent mobile strategy of some of its rivals, like Baidu and Alibaba, which have gone so far as to create their own mobile platforms and smartphones.
Nonetheless, Tencent is a force to be reckoned with both at home and abroad, and its rise in value and continued diversification should serve as a lesson to Facebook. Remember when Facebook bought that group messaging startup called Beluga? Well, nothing came of it. It was just an acquisition for talent. But when Tencent saw the potential of group messaging apps for smartphones, it went ahead and created its own – WeChat, or “Weixin” in Chinese – and it’s now the most used app of its kind in the world with over 100 million users. And it did that pretty organically, without forcing its QQ users into it. Facebook, as Zuckerberg surely knows in private, is a bit of a one-trick pony, and is very vulnerable to, say, social gaming companies pulling out, or to the rise of Google+. But there’s no-one that could take Tencent down in one fell swoop.
[Hat-tip to Asia-based startup luminary Benjamin Joffe - and judge at our Startup Arena contests! - for communicating about this in a tweet. He’s @benjaminjoffe on Twitter]