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Tencent Q4 Revenue Surges, Fueled By Gaming And Messaging

Strong growth in revenue from online games and social network services in China helped Tencent Holdings ( TCEHY ) deliver stronger than expected revenue when it reported fourth quarter earnings Thursday morning. Tencent reported revenue of $4.7 billion, beating the consensus estimate of $4.3 billion and up 45% year over year in local currency. Profit fell short as Tencent continues to aggressively invest in video and mobile. Tencent reported earnings per share minus items of RMB0.76, up 21% from a year ago. Equal to 12 cents at the current exchange rate, EPS missed the consensus estimate by a penny. Tencent is among China’s Internet leaders along with e-commerce king Alibaba ( BABA ) and search leader Baidu ( BIDU ). Other China Internet leaders include  e-commerce company JD.com ( JD ) and gaming company NetEase ( NTES ). Tencent shares traded over the counter in the U.S., were up 2.5%, near 20, in morning trading in the stock market today . Its primary stock listing is in Hong Kong, where it is a component of the blue-chip Hang Seng index. Revenue from online games, its largest revenue source, rose 33% to $2.46 billion, primarily driven by growth from smartphone games. The result was helped by an expanded game portfolio as well as higher revenue from PC games, thanks to popular titles and new games launched in 2015. Revenue from its social network and messaging services rose 37% to $1.1 billion. The increase was mainly driven by growth in subscription revenue as well as higher revenue from virtual item sales.

Google Update Boosts Ranking Signal For Mobile-Friendly Web Pages

Alphabet ( GOOGL ) unit Google said Wednesday that it is launching an update to mobile search results to help users find more mobile-friendly Web pages. “Getting good, relevant answers when you search shouldn’t depend on what device you’re using. You should get the best answer possible, whether you’re on a phone, desktop or tablet,” the company said in a blog post . Last year, the company said it would use “mobile-friendliness as a ranking signal on mobile searches.” Beginning in May, Google said, “we’ll start rolling out an update to mobile search results that increases the effect of the ranking signal to help our users find even more pages that are relevant and mobile-friendly.” The company said the goal of the upgrade was to “help our users find even more pages that are relevant and mobile-friendly,” although Google didn’t specify how much of an impact it expects the change to have. Sites that area already deemed mobile-friendly will not be impacted by the update. In November 2014, Google started labeling sites as “mobile friendly” to indicate which pages were size optimized to be read on smaller screens. Then, in February 2015, Google announced plans to roll out mobile ranking changes on April 21. A Web page is eligible to wear the “mobile-friendly” label if it avoids software such as Flash that is not common on mobile devices and uses text that is readable without zooming. Mobile-friendly sites also place links far enough apart so a user’s finger can easily tap the correct one. Google started using the label as a ranking factor worldwide in April. Google’s Mobilegeddon — its rollout of major changes to its search algorithm last April 2015 giving priority to mobile-friendly websites that adjust the look of a Web page on smaller screens — likely had a modest impact on advertising, analysts said. Google offers a Webmaster Mobile Guide with more details for web developers. Look for Google’s mobile-friendly test tool here . The search leader faces tougher competition from U.S.-based rivals led by Facebook ( FB )  and foreign stalwarts such as China search leader Baidu ( BIDU ) .  

Tencent Expected To Maintain Hot Growth In China Internet Field

Tencent Holdings ( TCEHY ), China’s leader in messaging and gaming, is set to report Q4 earnings Thursday before the market open, with double-digit growth in both EPS and revenue expected by Wall Street. Tencent is among the China’s Internet leaders along with e-commerce king Alibaba ( BABA ) and search leader Baidu ( BIDU ). Other China Internet leaders include  e-commerce company JD.com ( JD ) and gaming company NetEase ( NTES ). The consensus estimate is for Tencent to report revenue of $4.26 billion, or 27.76 billion yuan, up 32% in local currency. Earnings per share minus items are expected to rise 32% as well in local currency, to 13 cents, or 0.83 yuan, as polled by Thomson Reuters. Tencent is China’s leader in online gaming, followed closely by NetEase. On Feb. 24 NetEase reported Q4 earnings that beat estimates. Tencent is also the leader in mobile chat services with its popular WeChat program. On Nov. 10, Tencent reported its strongest revenue growth in five quarters with its  Q3 earnings  report, though profit fell short of expectations, due mainly to aggressive investments in mobile. Tencent is traded over the counter in the U.S., with its primary stock listing in Hong Kong, where it is a component of the blue-chip Hang Seng index. On the OTC, Tencent was near 19.50, down a fraction, in afternoon trading in the stock market today . China e-commerce company JD.com reported Q4 earnings on March 1 that showed strong revenue growth and a lower-than-expected loss, defying concerns of economic weakness in that country. JD offers a wide range of electronics, apparel, home appliances, food and beverages and other general merchandise and competes in China’s burgeoning e-commerce arena against Alibaba. A year ago, JD formed a strategic partnership with Tencent.