Tencent Acquires Comsenz and Becomes Leader of Chinese BBS

China's largest Internet company Tencent acquires a Chinese social networking development company. The deal was reportedly worth more than 60 million dollars.

Tencent enters China's BBS market

Tencent is China's No.1 online game operator and operates famous IM service and portal QQ. Comsenz is a Beijing-based social-networking provider which is behind the Discuz online discussion board platform which is extremely popular in China and also other community products.

Over 80% Chinese sites are running its BBS and over 70% of the BBSs are built on Discuz system. Comsenz also developed some other free social software like UCHome with which you can easily set up a Facebook-like social network.

Google invested 1 million dollars in Comsenz two years ago. Comesenz will now operate an a subsidiary of Tencent.

The consequences of the acquisition

First consequence of Comsenz's acquisition by Tencent is that million of Chinese sites will be seen as powered by Tencent instead of powered by Discuz!.

Besides, all the search engine of the BBSs built on Discuz system will be powered by Tencent’s search engine Soso. This could help Soso improve its low market share in China's search market against its main competitors, namely Baidu and Google.

In addition, Tencent might integrate its services like QZone and its microblogging service into the Discuz platform. QQ number could also be used as login with all Discuz powered BBS, so that QQ number could become the truly ‘OpenID’ in Chinese web.

Tencent wants to remain China's biggest Internet company

Other Chinese Internet giant Alibaba recently acquired Comsenz’s competitor PHPWind to enter China's BBS market. Tencent’s move on Comsenz is therefore clever in order to counter Alibaba.

BBS plays a very important part in Chinese eCommerce market since people often look for and exchange information about products. The question is now to see whether Tencent will take advantage of Discuz to promote its Paipai eCommerce platform in order to compete with Alibaba.

Tencent which owns 10% of Russian Facebook investor Digital Sky Technologies could look for more acquisitions as it seeks to expand overseas.