Tencent’s dream to beat Toutiao

6 min read 

On March 24th, when Tencent announced COO Mark Ren as the new president of Online Media Group (OMG), it heralded a new era for Tencent to compete with Toutiao, a news cluster App which claims 600 million users in China.

For Mark Ren, starting a new with a clean slate, this move had been in the blocks for over three months. Now that he’s finally getting his big move. It is said that Mark Ren even went as far as to reject several past internal activities to reflect on how to adjust OMG, yet this has thus far not been confirmed.

Recently, according to LeTV financial reports, OMG’s new round of adjustment is about to get underway. These measures are likely to kill the channel system and direct at Toutiao. According to internal information from LeTV, OMG’s future architecture may involve the following adjustments and personnel appointments:

  1. Establish a new original content department to merge the entire Tencent original content team, set up a video content center, an original center and an information center as three sub-sectors. Li Lun, deputy editor-in-chief of Tencent and former CCTV producer , will be in charge of this department. Tencent’s deputy editor-in-chief Ma Teng will be responsible for the original center, reporting directly to Li Lun.
  2. Set up a large content operation department that’s responsible for all network content and product management. Wang Yongzhi will be in charge of this department.
  3. Tencent sports will remain relatively independent.
  4. Tencent vice president Lin Songtao will be in charge of Daily Express, and Tencent open platform general manager Hou Xiaonan in charge of the Tencent Penguin Accounts. Lin Songtao was the first product manager of Tencent, one product called Yingyongbao was built by him. In addition, the former Vice President of OMG Huang Hai, who was in charge of technology products, has resigned from Tencent.
  5. The advertising sales department has already been adjusted before, including the cancellation of the advertising department, the establishment of KA customer and sales management center, it is reported that the adjustment additionally dropped a number of middle-level managers. Furthermore, it is rumored that the OMG’s advertising Newell Push and Tencent CDG effect advertising businesses will be merged.
  6. OMG and Tencent Interactive Entertainment Group (IEG) will now focus on video, games, film, literature and animation. On the other hand, Tencent Penguin Pictures will remain focused on the film and television, whereas Tencent Pictures itself will shift its attention to the big screen.

A well-known news app called Huxiu verified an insider at Tencent, the source claims to not have been informed about these adjustments. Although the rumor has circulated internally for quite some time, the report of LeTV financial seems to have provided the required verification.

At the moment, Mark Ren presides over three major business groups of the seven at Tencent, namely IEG (Interactive Entertainment Group), MIG (Mobile Internet Group) and has reportedly just taken over OMG (Online Media Group).

After graduated from College in 1998, Mark Ren joined Huawei. In 2000 he joined Tencent which was just founded one year before, yielding him a veritable veteran and a steady winner.

With a very low-key personality, Ren’s performance is quite the opposite. Practicing the famed “double 50%”: income from the gaming industry accounted for more than 50% of Tencent’s revenue, and Tencent Games accounts for more than 50% of the industry.

[epq-quote align=”align-right”]Mark Ren is believed to be the best choice to beat Toutiao.[/epq-quote]

In 2013, Tencent only had 4 defined business groups, and he took charge of 3 (IEG, SNG and MIG). Nowadays, Tencent has 7 business groups, yet he remains in charge of 3 (IEG, MIG and OMG). His impression to the outside world was “thinking, daring, and pioneering spirit”. In the various factions of Tencent, he is a man of achievement and pattern, as well as entrepreneurial with redeemable qualities.”

From these recent adjustments, we are witness to his courage and resolute determination.

OMG was originally in charge by Singaporean SY Lau, with independence in Beijing, far away from headquarter in Shenzhen. Yet their considerable distance from each other led to some discorded communication. SY Lau has been in the advertising business for over 10 years, so OMG’s positioning within Tencent can be described to a certain extent as traditional advertising.

After Mark Ren took over, it was completely different. From the above article 4 and 6, he was able to lend the ability of SNG and IEG to OMG, for the first time OMG and other groups of major business groups to get through, this is the biggest change of this time.

This ability to make Shenzhen headquarter resources and energy on secondment to Beijing is clearly not what SY Lau had before.

Furthermore, who exactly is Lin Songtao? Lin is Tencent’s first product manager, built the Android App store Yingyongbao. As with Mark Ren, is the steady winner of Tencent, and to win the type of military exploits, such a person can not be moved by ordinary people.

According to a former Tencent employee who worked closely with Lin Songtao at that time, Yingyongbao had been circulating internally for several years, but was met similar fate as with the present Daily Express – tepid, slumbering – until Lin Songtao took over and revived the project.

Mark Ren let Lin take over Daily Express, hoping that the latter would once more be able to reverse its fate. This put a great deal of expectation on Lin Songtao’s shoulders, since the Daily Express’ strategic position was to beat Toutiao. It was probably also Ren’s intention to let Hou Xiaonan take charge of Tencent Penguin Accounts.

From another point of view, Ren’s move to OMG fully proved his distrust of the Beijing team. Currently the most popular channel of Tencent’s network are Tencent sports, lead by Wang Yongzhi, whom Ren has now promoted to oversee the large content operations. Others including Tencent microblog (similar as Twitter), Weishi (short video) and Daily Express, are also half-dead.

In addition, Tencent President Martin Lau hopes that Ren can accelerate OMG’s algorithm recommendations, amongst other technological breakthroughs, to create a complete content ecosystem that integrates the company’s resources. This creates a collaborative platform to share information and company-related content, accelerating the upgrading of OMG’s products, increasing OMG’s and IEG’s content and entertainment ecology strategic linkage. Ultimately, the goal is to lead the network media business to a strategic high ground, and simultaneously pushing the businesses to a higher level.

Obviously, technology has replaced manpower as the most influential factor for OMG. This is basically the route of Toutiao. What Tencent had to do was take Toutiao’s route and make Toutiao at the end of the rope. This is also the Tencent’s advantage in its history.

So what about the people who were part of the original content in Beijing? Ren hope that they can find their roles in mutual entertainment – what’s why to get through video, games, film, literature and animation.

The ongoing suspense is that whether the Daily Express can succeed under the leadership of Lin Songtao, and supported by Mark Ren.

Tencent’s dream to beat Toutiao depends on the success or failure in this battle.

 

This article by Chaochen Zhou originally appeared in Huxiu and was translated by Pandaily.

Click here to read the original Chinese article.

 

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