Inside Tencent Weibo (0700.HK) - by iChinaStock

INSIDE INSIDE TENCENT WEIBO 0700.HK TENCENT’S MICROBLOGREPORT BYiChinaStock covers Chinesecompanies listed in the US

INSIDE Tencent Introduction “If Facebook is the worlds social graph, then QQ is Chinas social graph.” Chinese IT Blogger Bo Hong (also known by the alias Keso)•  Tencent is one of the three dominant BAT (Baidu-Alibaba-Tencent) firms on the Chinese internet, with strong leadership in social and gaming. •  Social: The glue of Tencent’s huge userbase are its social services, especially its dominant IM application, QQ Messenger. •  Gaming: Tencent monetizes users via micro-transactions in games and other services.•  QQ Messenger is the hub from which Tencent builds up its other products including games, search, portal, e-commerce, mobile, social networks, and microblog (Tencent Weibo). •  Tencent’s QQ Messenger is China’s most popular IM software. Tencent claims that QQ Messenger has more than 674 million “active users”, although Analysys market research estimates that unique active users is closer to one-third of that number (~225 million).•  Tencent (0700.HK) was founded in November 1998. As of May 2011, Tencent’s market capitalization was over $50 billion.

INSIDE Tencent Weibo: Another Spoke In Tencent’s Social HubIn US terms, Tencent’s social hub is as if AIM, MySpace, Facebook, and Twitter were owned by onecompany, and all cross-promoted and synced to each other. Tencent has “locked-in” a huge userbasevia the social graph of QQ Messenger. Tencent Weibo is another spoke on Tencent’s social hub. Whereas Sina Weibo is gaining new users for Sina, Tencent is primarily channeling Tencent spins a tangled web of existing users to a new service. cross-promotion and syncing Qzone (Nickname SNS) * Tencent Weibo is available inside of every one of Tencent’s major social products, indicating that it’s assigned top-priority KEYTencent Pengyou = Messages sync by default (Real-name SNS) External links = Messages sync by optional setting = Status updates by optional setting QQ Messenger (IM) Service is accessible via a dedicated tab: = Tencent Weibo = Qzone Image by = Pengyou * Status updates + “shares” sync by default; photos + diaries are optional Tencent Weibo (microblog)

Microblogging in China •  The first generation of microblogs in China (Jiwai.de, Fanfou, Zuosha, etc.) gained modest popularity but faced severe regulatory constraints due to the sensitive nature of media sites in China. Fanfou was shut down by the government for over a year. •  It was not until Sina Weibo exploded in popularity in 2009-2010 that microblogging became a hot service in China.Infographic Source: CIC Data (www.cicdata.com)

INSIDE Tencent Weibo Key Facts (March 2011)•  Registered users: 160 million*•  Monthly active users: 93 million*•  Monthly posts: 10 billion*•  40% of users register for Tencent Weibo accounts via QQ Messenger.•  12 celebrities have over 10 million followers on Tencent Weibo (many celebrities are pre-selected as accounts to follow by default)•  Tencent Weibo is available inside of every one of Tencent’s major social products, indicating that it’s assigned top-priority •  Post to Tencent Weibo: Via QQ Messenger, Qzone, and Pengyou •  Read Tencent Weibo Posts: Via QQ Messenger, Qzone, and Pengyou•  * = Activity on any Tencent social site is often synced to others by default, but the user is counted as active on both services. User numbers therefore likely overestimate the true level of activity.

INSIDE Timeline of Tencent’s Social Networks QQ Messenger was launched in 1999. Tencent has since used that application’s social graph and traffic to launch two social networks (Qzone and Pengyou) and one microblog (Tencent Weibo). Tencent Weibo Qzone launched Xiaoyou launched, a Pengyou reaches 160 million as a blogging real-name SNS for launched, a real- registered users andplatform, primarily college students name social 93 million monthlyusing nicknames network open to all active users 2005.4 2008.6 2009.1 2010.4 2010.9 2011.1 2011.4 Qzone personal center Tencent Weibo Xiaoyou merged launched (transformation launched into Pengyou towards a social network)

INSIDE USERS: Sina Weibo vs. Tencent Weibo Users: 140 million registered 160 million registered* 93 million active* Demographics: Primarily white-collar urban. Elite-based, Users drawn from Tencent’s userbase, so are started with many celebrities and media tend to be from 2nd and 3rd tier cities and figures. below. User Acquisition: Primarily new users for Sina, though Primarily existing users of Tencent’s other most users are familiar with Sina’s brand social services (QQ Messeneger, Qzone, and portal site. Some also use Sina’s Pengyou). Tencent Weibo may increase user blogging platform. stickniess for Tencent and fights off Sina otherwise poaching from its userbase. Market share by 57% 22% users: (Dec 2010 iResearch) Market share by 87% 9% browsing time: (Dec 2010 iResearch) Other major Chinese internet firms such as Baidu (NASDAQ: BIDU), Sohu (NASDAQ: SOHU), and Netease (NASDAQ: NTES) also have microblogs, but they lag far behind Sina and Tencent.*Note: Tencent’s user numbers likely overestimates the true level of activity on Tencent Weibo

INSIDE FEATURES: Sina Weibo vs. Tencent Weibo Feature Comparison Launch 2009.08 2010.04 Open Platform 2010.07 2010.12 Weibo Groups 2010.12 N/A Sync with MSN 2010.03 N/A iPhone Version 2010.01 2010.05 Android Version 2010.01 2010.05 iPad Version 2010.10 N/A IM Version 2011.03 2011.05 Neither Sina nor Tencent has yet figured out a very successful way to monetize their microblog service, and both remained focused on user growth at presentSource: Mirae Asset, iChinaStock Research

INSIDE DEMOGRAPHIC DIVIDE: Sina Weibo vs. Tencent Weibo •  China’s war of the weibos may not be aUrban Elites winner-take-all market. Sina is entrenched1st tier cities with urban elites while Tencent controls a huge segment of mass market users. •  In traditional social networks, for example, Tencent is a leader with Qzone and Pengyou, but has lost urban elites to Renren, Kaixin001, Douban, and increasingly Sina2nd tier cities Weibo. •  2nd and 3rd tier cities are key battlegrounds as each is aggressively trying to expand beyond its traditional audience.3rd tier cities •  It will likely be challenging, but not impossible, for Sina Weibo to make progress in lower-tier cities. It is likely near-impossible for Tencent Weibo to capture urban elites.4th and below Social networks tend to spread outward from a core of elites.

INSIDE FUTURE: Sina Weibo vs. Tencent WeiboChinese IT blogger, Bo Hong (also known by the alias Keso), comments: “Only one firm is capable of becoming Chinas Facebook: Tencent. The two (Facebook and Tencent) may be dissimilar in outward appearance, but the core of each is closely related: the social graph… Sina Weibo is too close to being a form of media, to the point of being removed from peoples daily lives. To the populations of third and fourth tier Chinese cities, its still very foreign. In terms of users, Tencent Weibo has already surpassed Sina Weibo. In terms of traffic, the two are also close. But in terms of media influence, it will be very difficult for Tencent Weibo to surpass Sina Weibo.”

INSIDEA Look Inside Tencent Weibo t.qq.com

Weibo Set-up I The default setting is to follow all a user’s QQ Messenger friends on Tencent Weibo. Tencent uses its existing social graph to populate Weibo.

Weibo Set-up II Send Qzone status updates to Weibo Send QQ status updates to Weibo Recommend my Weibo to my QQ friends Show my latest Weibo posts to my friendsInvite your QQ Messenger friends to WeiboInvite your email contacts Weibo Email contacts come from QQ Email or Qzone

Homepage Before Log-in

Homepage After Log-in Post Weibo Recommended Users

Weibo Feed Like Sina Weibo, Tencent Weibo is far richer than Twitter’s minimalist microblog. It allows embedded pictures, videos, emoticons, and threaded comments. And one can express FAR more in Chinese than English in 140 characters.Repost of original Animated emoticons weibo with added comments Hashtag Original post with picture Click to see all 153 reposts and comments

Weibo Re-Post Re-post and comment #1 Like Sina Weibo, re-posting on Tencent Weibo is far richer than Twitter’s minimalist microblog. It’s more similar in form to status updates on Facebook, though posts are visible to all. Original post (with picture embedded) || @ user comment #1 (added by default New (second) comment on this weibo post when “re-post” is selected) Add: hastag (topic) | @ user | emoticon Share to Qzone

Weibo Events

Weibo Applications

QQ Messenger – Posting to Weibo IM Default Page Weibo on QQ Messenger External links to QQ services (opens in browser) Includes Qzone, Weibo, Mail, etc. Toggle between QQ services (opens in QQ Messenger) IM | Groups | Weibo | Recent Contacts WeiboQQ Messenger friends Post Weibo Weibo Feed QQ Messenger status of user is his latest Tencent Weibo

Qzone – Posting to WeiboQQ user name and ID Friend trends (default Qzone feed) Qzone status update syncs to Weibo by default Indicates new Weibos to read Opens Weibo directly on the same page Qzone “friend trend” feed is populated with content from Weibo friends—even if never added in Qzone

Qzone –Weibo Setup Qzone-Weibo setup Blogs in Qzone sync to Weibo Photos in Qzone sync to Weibo Status updates in Qzone sync to Weibo “Shares” in Qzone sync to Weibo These two are checked bydefault, so Qzone content is sent to Weibo. These then count as “active” Tencent Weibo users Weibos sync to Qzone

Pengyou – Posting to Weibo Indicates new Weibos to read Post Status UpdateOpens Weibo directly Default is for Pengyou status on the same page update to send to Qzone, but Weibo, and QQ Messenger (status update) may also be selected

Pengyou – With Weibo Inside By selecting the Weibo tab in Pengyou (see previous slide) the entire page is turned into the Tencent Weibo, without shifting to Weibo’s t.qq.com domain Post Weibo

Weibo – Content from Qzone, Pengyou, etc. Tencent spins a tangled web of cross-promotion and syncing. Many users may be intentionally “active” by accessing Weibo via other Tencent social services or unintentionally active because services are synced by default. Your Posts Post from Qzone Post from Pengyou

INSIDE ABOUT ICHINASTOCK Snowball Finance is a financial media platform that includes two sites. One is iMeigu.com, a Chinese-language site that covers all US-listed stocks. The other is iChinaStock.com, an English-language site that covers Chinese stocks listed in the US. Each site provides stock quotes, business news, and analysis. Snowball Finance has also established my.iMeigu.com, a Web 2.0 platform for global investors to share news and insights on stocks they follow. Snowball Finance also publishes the iChinaStock 30 Index, a representative sample of Chinese stocks on the NYSE and NASDAQ.© March 2011 iChinaStock

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Inside Tencent Weibo (0700.HK) - by iChinaStock

by iChinaStock on May 24, 2011

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