Tencent Revamps Businesses to Expand in Mobile, Grow Overseas
Tencent Holdings Ltd. (700), China’s biggest Internet company, is reorganizing its business units to expand services for smartphone and social-networking users and accelerate growth of its online games operations overseas.
Operations will be split into six businesses including social networks and mobile Internet, the Shenzhen, China-based company said in an e-mailed statement today. Tencent also plans to set up an e-commerce subsidiary, it said.
Chief Executive Officer Pony Ma is diversifying Tencent from a reliance on online games, which account for more than half the revenue. Tencent faces competition from Chinese Internet rivals including Baidu Inc. (BIDU) and Alibaba Group Holding Ltd. in winning users of smartphones such as Apple Inc.’s iPhone. Also, the company aims to expand its social networking sites as Facebook Inc.’s service is restricted in China.
One of the aims of the business revamp is to “embrace the expanding global online games market,” Ma said in the statement.
Tencent will also form divisions for interactive entertainment, online media, corporate development and technology and engineering, it said.
Tencent rose 1.3 percent to HK$227.20 as of 11:04 a.m. in Hong Kong trading. The stock has gained 46 percent this year, the best performance in the city’s benchmark Hang Seng Index.
Profit rose to a record 2.95 billion yuan ($466 million) in the three months ended March 31, helped by rising online game sales in China and South Korea, the company said in a May 16 Hong Kong stock exchange filing.
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