Posted by: Guo Cheng Gang on 2009.06.08 11:51 in guo

User habits and government control make it hard for foreign companies to succeed in China's Internet market. Google (Nasdaq:GOOG) has been overshadowed by Baidu (Nasdaq:BIDU) and Facebook by Kaixin001. But no company typifies this type of domestic coup better than Tencent (700.HK), the Internet service provider who released instant messaging tool "OICQ" (read: Oh, ICQ) in 1997, before renaming the service "QQ" and building a user base of more than 300 million.

Tencent now uses the QQ IM platform to promote its search, e-commerce, social networking, blog and news services, but, so far, not many products have been monetized successfully.

One of the latest releases to launch VIP, i.e., for-a-fee, service is QQ Music, which fills the iTunes gap and may wean Internet users off Baidu's MP3 search with its real-time streaming music and download library.

Though they may not be making money yet, lesser-known Tecent products -- including micro-blogging site Taotao.com and download accelerator, media player, browser, and input software -- rival those of more specialized companies like Twitter, Xunlei and Stormcodec.

Though it may be taking leads from the competition, both foreign and domestic, Tencent has proven itself to be a good developer with a great brand. And, if it is able to successfully cash in on up-and-coming services, Tencent has the potential to surpass leaders like Sina (Nasdaq:SINA) and Sohu (Nasdaq:SOHU) to become the epitome of a Chinese new media group.