What's going on?

Tencent, the owner of WeChat and various other tech companies, saw its stock jump 5% on Thursday after it reported better-than-expected financial results. That turned it into the most valuable Chinese tech firm – surpassing Alibaba.

What does this mean?

Tencent�s WeChat is sometimes called China�s Facebook because it is both a social media platform and a messaging app. It�s growing its advertising revenue much like Facebook (e.g. via a �newsfeed�). But WeChat also acts as a platform for services, like money transfers, for which it collects a fee from the vendor.


Tencent also makes a huge amount of money from mobile gaming, which is an area that�s growing massively in popularity. All told, investors were encouraged that Tencent is well placed to take advantage of future tech trends.

Why should I care?

For you personally: WeChat�s model (e.g. offering more services on top of messaging) is coming to an app near you.
Facebook is expected to start connecting its users with businesses via WhatsApp and Messenger. Tacking on services for its more than 1 billion users could be a game-changer for Facebook (and perhaps for messaging apps from other companies). That�s one reason why investors care so much about a tech company�s level of engagement (e.g. the stickiness of its users): more ways are coming to monetize your activity.


The bigger picture: Chinese tech firms are starting to show some big-time leadership.

Uber bowed out of the country and sold itself to China�s Didi. Tencent is a market leader in mobile gaming. WeChat might be pioneering the messaging-app business model. And Alibaba is a global leader in e-commerce. China appears to be, at the very least, closing the gap with Silicon Valley in terms of tech leadership.