Research On The Profit Model Of Tencent

Tencent Holdings Co.,Ltd.(hereinafter referred to as Tencent),as largest Internet company of Asia,the explosive growth process that is more than ten years can be regarded as the epitome of China's Internet industry development.The scientific and effective profit model is the core of the successful operation of the enterprise,and Tencent's profit model has distinctive features such as precision,innovation and epochal.In this paper,Tencent as the research object,mainly uses the literature analysis and case analysis,aiming to explore the typicality of Tencent's profit model,so as to be able to provide reference for other Internet companies.It has great theoretical and practical significance to study the evolutionary process and effectiveness of Tencent's profit model for the healthy and sustainable development of China's Internet industry.This paper divides the development process of the Internet industry into three development stages firstly,which including traditional networks,websites and social networking,mobile apps and social,and summarizes the basic profit model of Internet companies: advertising model,sales model and platform model.As frame of reference,Tencent's development process is divided into three periods: initial period,growth period and stable period,and the profit models of different development periods are summarized: the initial free platform exploring profit model,Development of one-stop online platform adjustment profit model and stable period of all-round open platform stable profit model.Then,from the five dimensions of profit target,profit point,profit leverage,profit source,and profit barrier,the development period and stable period has carried on the thorough analysis.Tencent's profit sources,the value discovery and maintenance of customer,the construction and perfection of company's operating mechanism were studied separately.Through the vertical and horizontal analysis of Tencent's profit model,this paper draws a conclusion that the profit leverage is the core among the five elements of the generalized profit model through customer,marketing,product and profit point,profit object,profit barrier and profit source.Through the in-depth analysis of Tencent's financial data,it is shown that Tencent's constantly evolving profit model can effectively promote the benign change of the company's financial performance,and the benign change of the financial performance provides a lasting power source for the evolution of the company's profit model.On the basis of vertical analysis,Tencent conducted further horizontal analysis with Alibaba and Baidu and analyzed the differences between the five elements of the broad profit model of the three Internet companies.It is concluded that Tencent has the advantages of a wide variety of products,a wide range of profit targets,a stable source of profits,and a high leveraging effect on profits.It also has the disadvantages of product crossover and underreporting.Finally,through a comprehensive analysis of Tencent's profit model,we conclude that the Tencent's profit model has implications for the development of other Internet companies: The development of Internet companies should grasp the key characteristics of profit models such as the accuracy,innovation,and epochal of their profit models.Constantly exploring and being brave to change can achieve healthy and sustainable development.