Tencent makes a killing in Q2 again + “Inside Tencent” report on its way

The 2009 edition of our our popular “Inside Tencent” report will be released in the coming days! We will have a promotion for the first orders. Contact us if you would like more details.

While the economy is slowing globally and advertising dollars are drying up, a few companies are still doing pretty well. One of them is certainly Tencent in China, whose IM service combined with virtual goods, games, social networking and more is still happily making millions.

Fasten your seat belts, here are the results for 2Q09

• Total revenue: USD421.3 million (+79.9% YoY)
• Revenue from ads: USD35.6 million (+9.1% YoY)
• Operating profit: USD204.8 million (+82.8% YoY)
• Operating margin: 48.6%
• Cash position: USD1.1 billion

+8* Comments

• Tencent makes more money in one single quarter than Facebook might do in 2009.
• Its revenue might reach over USD2 billion this year, double from 2008.
• Advertising represents barely 8.4% of its business.
• Tencent’s operating profit might be over USD800 million in 2009, more than the acquisition price of MySpace by News Corp.
• Despite some investments domestically and overseas, Tencent still has over USD1 billion in the bank. What could they buy?

More details about operations

Tencent has three main streams of revenues: Internet value-added services (IVAS), mobile and telecommunications value-added services (MVAS) and online advertising.

• Registered IM accounts: 990 million
• Active IM accounts: 448 million
• PCU (IM): 61.3 million
• PCU (casual games): 6.2 million
• IVAS paying subs: 40 million
• MVAS paying subs: 17.2 million

+8* Comments

• Tencent is going to reach the unprecedented number of 1 billion registered accounts soon
• 448 million are active accounts for 350 million Internet users in China, meaning that many users have multiple accounts (QQ being the “new and improved email” it is hardly surprising).
• 40 million are paying web users, which is about 10% conversion rate from active to paying. Pretty good by online communities standards. More, the ARPPU for IVAS is USD2.6/month. How does that compare to Facebook?
• For mobile, the ARPPU is USD1.33/month.
• Let’s keep in mind that the average income of Internet users in China is 400 USD.

If your business has to do with virtual goods, social networking, online gaming and you haven’t heard of Tencent by now, you must be in hiding waiting for WWII to end.

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+8* | Plus Eight Star finds where Asia is ahead of the curve and helps your business get there too.