Despite drop in earnings and pressure from Microsoft, internet firm bets on a hit with online Fantasy
Instant messaging and online games provider Tencent Holdings said yesterday it remained optimistic about prospects for the rest of year, despite a quarterly drop in net profit and the threat of increased pressure from global software giant Microsoft Corp in the mainland internet sector.
The Hong Kong-listed mobile and internet services company said first-quarter net profit dropped to 96.95 million yuan from 116.34 million yuan in the previous quarter and 106.46 million yuan in the year-ago period.
Revenue fell 4.5 per cent from the previous quarter to 300.47 million yuan.
The announcement came just days after Microsoft formed a joint venture with Shanghai Alliance Investment to expand its MSN internet services in China.
Tencent chief strategy and investment officer Martin Lau acknowledged 'all internet companies would face pressure from the increased competition', but added that Microsoft's move 'sends a strong signal that China remains a very strong internet market'.
He argued that Tencent would continue to prosper with its 'differentiating strategy of bundling valued-added services' to compete with MSN's relatively 'no-frills' messenger programme.
