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How Tencent became the world’s most valuable social network firm with barely any advertising

By Salvatore Cantale, IMD Business School and Ivy Buche, IMD Business School The Chinese technology giant Tencent recently overtook US rival Facebook to become the world’s most valuable social network company, with a market capitalisation of US$540 billion ($675 billion). Yet it is sitting on an advertising goldmine. Just 18% of its total revenue in […]
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Tencent. <a href="https://www.shutterstock.com/image-photo/beijing-china-april-29-2017-tencent-664094911?src=H7l-Ab8Y_NCvry3nSag1Mw-1-0">testing / Shutterstock.com</a>

By Salvatore Cantale, IMD Business School and Ivy Buche, IMD Business School

The Chinese technology giant Tencent recently overtook US rival Facebook to become the world’s most valuable social network company, with a market capitalisation of US$540 billion ($675 billion). Yet it is sitting on an advertising goldmine. Just 18% of its total revenue in the 2016 fiscal year came from online advertising. Compare this with Facebook’s model: advertising makes up 98% of its total revenue.

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china
social media
social network
social networking
social networking sites
tencent
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