My last post on the cooperation between Netease and China Telecom can be found here:
There is a major battle brewing between the titans of China gaming industry. In the next 1 to 2 years, a true show down is happening between the overwhelmingly dominant player in China (that is Tencent) and the highest quality player (Netease).
This show down is largely happening without being noticed by the Wall Street. It seems all the analysts were concentrated on the mobile gaming area, they completely missed the true battle that is happening in front of them.
The outcome of this battle can be whether Tencent can re-tend its absolute dominant position in China's online gaming industry, or whether Netease can grow by 300% or 400% in the next couple of years and become a true competitor to Tencent. This will be the battle to determine the state of China's online gaming industry for the next 10 years.
Unfortunately, I just don't have time to write about them at this point. Hopefully, I will have some free time in a couple of months to documents this epic battle.
In this article, I will briefly talk about another area between Netease and Tencent.
Tencent's WeChat had becoming the most important new product on both the online and mobile industries. But it might just got a real potential competitor. From the following article (in Chinese)
Netease and China Telecom
Netease and China Telecom formed a new company and developed a new WeChat competitor.
Before now, WeChat doesn't really have much competitors. Sina is concentrating on its Weibo product. All three telecom companies in China are state own companies. Those state own companies are horrible in developing new products.
But an entity between Netease and China Telecom can be a real threat to Tencents.
Technology wise, Netease is better than Tencents. China Telecom is a state own monolith. It can provide service for free that Tencents can't match.
Of course, the devil is in the detail. If China Telecom is willing to give up control to Netease, we then will have a real battle with Tencents.
Again, Netease is the true winner in all this. Even if the joint venture didn't pan out, it will give Netease products access to China telecom users (I don't know what is the total users now, but in 2009, it had 192 million fixed line users, 62 million mobile users, and another 62 million broadband users).
At this point, there is no official announcement. But the rumors are getting more and more credible.
About this Blog
The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.
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