Competition Among China Internet Companies

Competition among Internet companies is intensifying after Alibaba bought an 18 percent stake in Sina Corp.’s Weibo, a microblogging service that had more than 60.2 million daily active users from June to September. Tencent paid $448 million in September for a stake in Sogou, China’s third-largest search engine, to expand its Web offerings in the world’s largest market.

More than 84 percent of China’s Internet users regularly access instant messaging, making it the most popular online application in the country, followed by search engines with about 80 percent usage, according to data compiled by Bloomberg.

Tencent’s QQ instant-messaging service had 818 million monthly active users at the end of June, and WeChat had 236 million. That compares with about 1 million instant-messaging accounts in 1999, according to its website.

WeChat Growth

Monthly active users for QQ fell 0.4 percent to 815.6 million people by the end of September from the end of June. WeChat saw monthly active users rise 15 percent to 272 million during the same period. Tencent is counting on WeChat, which targets more upscale users than QQ, for its global expansion. WeChat revenue may reach 4.9 billion yuan next calendar year as the company moves faster than expected in monetizing the application, John Choi, an analyst at Daiwa Securities Group Inc. in Hong Kong, wrote in a Nov. 8 note.

Alibaba plans to boost use of its Laiwang instant-messaging app to 100 million as it seeks to defend its market share and win users from Tencent.

Tencent has also expanded into e-commerce with platforms including business-to-customer website Yixun.com and Paipai.com, which links individual buyers and sellers.

Tencent Founder, Ma is China’s fourth-richest man, with an estimated net worth of $10.5 billion, according to the Bloomberg Billionaires Index.