China’s Tencent, one of the top social networking companies in China, has announced that after a period of increased spending, they will now restructure their business into a more efficient configuration to grow beyond its core business. Tencent is best known for Tencent QQ, an instant messenger not dissimilar to Microsoft’s Live Messenger service, but with enhanced web and mobile capabilities. The new restructure will help the company’s smaller teams gain enough independence to grow faster.
The Wall Street Journal reports that smaller operations such as the e-commerce division will be able to grow faster in the new configuration by pooling “certain of our technology and engineering teams to further develop core technologies and operational platforms so as to better support future business growth.” This means that they will have a centralized engineering team that is more readily able to work with a variety of teams and accomplish goals across the companies. Expect this to also open up the possibility for Tencent to create some sort of cross-platform technology to increase their efficiency even more.
The new groups will include “corporate development, interactive entertainment, mobile Internet, online media, social networking, and technology and engineering”. This definitely seems reminiscent of major American media companies like Viacom or Disney, and reflects Tencent’s broad and ambitious goals.
Tencent just recently announced their 2012 Q1 results and their profits were $467 million, a record for the company and in increase of 2.8 percent from a year earlier. It’s not a huge amount of growth, but that’s because spending increased as Tencent moved to solidify their QQ product’s dominance and spend on the seeds of growing into other parts of the world such as South Korea and the United States. They recently purchased U.S. games publisher Riot Games, in fact.
We’ll keep an eye on Tencent to see if their growth continues at this pace.