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Tencent to tighten age verification checks for gamers amid government crackdown

Posted by | Asia, China, Gaming, gaming addiction, privacy, Tencent, Tencent Holdings, WeChat | No Comments

Chinese Internet giant Tencent has announced it’s bringing in a new system of age checks to its video games which will be linked to a national public security database — in an effort to reliably identify minors so it can limit how long children can play its games.

The new real name-based registration system will initially be mandated for new players of its popular Honour of Kings fantasy multiplayer role-playing battle game.

It will be introduced around September 15, according to Reuters.

Tencent said the planned ID verification system — which Bloomberg couches as equivalent to a police ID check — is the first of its kind in the Chinese gaming industry, and claimed it will enable it to accurately identify underaged players and impose existing play time restrictions.

Last July Tencent said it would impose a playtime maximum of one hour per day for children up to aged 12, and a maximum of two hours a day for those between 13 and 18. But if kids can get around age checks such limits are meaningless.

“Through these measures, Tencent hopes to continue to better guide underaged players to game sensibly,” it said in a statement on its official WeChat account about the beefed up checks. It also said it plans to gradually expand the requirement to its other games.

In total Tencent’s gaming portfolio is reported to have more than 500 million players in China.

The move comes amid a crackdown by the Chinese government on video gaming over fears of health problems and addiction among children.

Late last month a statement posted on the Education Ministry website said new curbs were needed to counter worsening myopia among minors.

Ministers have long said they want to limit the amount of time kids can play games — although achieving that outcome is clearly a major challenge, given the popularity of video games and the proliferation of devices from which they can be accessed.

Tencent’s move to link age verification to a public security database does seem to represent a significant new step towards the government achieving its goal of also controlling kids’ digital activity. And investors reacted negatively to the announcement — pushing Tencent’s shares down more than 3%.

Shares in the company also dived around 3% last week when the government announced its latest gaming crackdown.

Reuters notes that shares in two other major Chinese game developers, China Youzu Interactive and Perfect World, also dropped 5.5% and 3.6%, respectively, as investors digested the regulatory risk.

Last year the Chinese government also tightened general Internet regulations, doubling down on its long standing real-name registration rules.

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There’s more: Google is also said to be developing a censored news app for China

Posted by | Android, app-store, Apps, artificial intelligence, Asia, Beijing, bytedance, censorshit, China, cloning, computing, Facebook, files go, Google, internet service, JD.com, search app, search engine, Software, Tencent, Toutiao, United States, WeChat, world wide web | No Comments

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked.

That’s according to The Information which reports that Google is essentially cloning Toutiao, the hugely popular app from new media startup ByteDance, in a bid to get back into the country and the minds of its 700 million mobile internet users. Like Toutiao, the app would apparently use AI and algorithms to serve stories to readers — as opposed to real-life human editors — while it too would be designed to work within the bounds of Chinese internet censorship.

That last part is interesting because ByteDance and other news apps have gotten into trouble from the government for failing to adequately police the content shared on their platforms. That’s resulted in some app store suspensions, but the saga itself is a rite of passage for any internet service that has gained mainstream option, so there’s a silver lining in there. But the point for Google is that policing this content is not as easy as it may seem.

The Information said the news app is slated for release before the search app, the existence of which was revealed yesterday, but sources told the publication that the ongoing U.S.-China trade war has made things complicated. Specifically, Google executives have “struggled to further engage” China’s internet censor, a key component for the release of an app in China from an overseas company.

There’s plenty of context to this, as I wrote yesterday:

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

As for Google, the company pointed us to the same statement it issued yesterday:

We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.

Despite two-for-one value on that PR message, this is a disaster. Plotting to collude with governments to censor the internet never goes down well, especially in double helpings.

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Latin America’s Movile is quietly building a mobile empire

Posted by | brazil, Column, ifood, Mobile, movile, Naspers, online food ordering, PayPal, playkids, spoonrocket, Tencent, WeChat | No Comments

By 2020, Brazilian mobile giant, Movile, wants to improve the lives of more than one billion people through its apps. The company began its mission in 1998 selling gaming, news and SMS messaging services to mobile operators in Brazil. After receiving its first investment from South African-based global investor Naspers 10 years ago, Movile grew into one of the largest and most successful mobile companies in Latin America, with more than 150 million monthly active users of its apps and estimated revenues over $240 million.

Movile’s app, PlayKids, propelled the company to the global stage. A platform that offers educational products and content for children, PlayKids in 2014 reached more than 6 million downloads within a year of launching, and 5 million active users per month.

From there, Movile turned its attention to an unprecedented strategy of mergers and acquisitions in Latin America. The company’s expansion strategy included investments in more than 20 other mobile companies, such as iFood and Sympla, two of the most prominent players in Latin America’s mobile space today.

Here’s a look at how Movile went from local success story in Brazil to one of the largest mobile companies in Latin America — and its next steps for mobile success worldwide.

The PlayKids launching pad

By 2012, Movile was the largest mobile services company in Brazil. With more than 150 employees, the company established its core offerings in mobile payments, mobile commerce and other B2B mobile solutions. Movile’s teams successfully opened offices in Mexico, Colombia, Argentina and Venezuela, which they achieved through the acquisition of another mobile company with a similar business model, CycleLogic. But it wasn’t until the launch of PlayKids in 2013 that one of Movile’s creations landed in the hands of millions of users around the world.

By June 2014, PlayKids had users in more than 30 countries and was one of the top-grossing children’s apps of all time. The success of PlayKids allowed Movile to build key relationships with tech firms in Silicon Valley, including Apple and Google, for the distribution of the company’s apps, and Facebook for marketing them.

Also by this time, Movile had more than 700 employees working from 11 offices in six countries, and began the next chapter in their story: ramping up their investments in other mobile companies. Movile used this strategy not only to continue its expansion across the region, but also to fend off any foreign competition eyeing Latin America’s increasingly lucrative mobile market. By 2014-2015, Latin America was the fastest-growing smartphone market in the world with 109.5 million smartphone units sold in the region.

Becoming Latin America’s mobile powerhouse

2014 marked a big year for Movile. The company invested $1.6 million into online food delivery startup iFood in the past, but an additional $2.6 million investment in 2014 led to the purchase of an iFood competitor, Central Delivery. Movile’s investments in iFood and its buy-out of the competition took the iFood app from 25,000 orders per month to more than one million orders per month.

Movile’s goal was simple: take a fast-moving startup and help it grow beyond what the founding team ever thought possible.

The insights and data that Movile gathered during its strategic venture capital investments in iFood were critical. During this time, Movile built the foundation for its investments that followed shortly after, and learned how to make them a success. With each new investment, Movile’s goal was simple: take a fast-moving startup and help it grow beyond what the founding team ever thought possible by infusing cash, human capital and any technical resources or expertise that the startup could possibly need.

Movile quickly solidified its M&A strategy, its processes and its position as a leader in Latin America’s mobile market. To continue financing its growth through acquisitions, Movile raised another $55 million from Innova Capital, Jorge Paulo Lemann and FINEP in its Series D round in 2014. This new round of financing led to even more acquisitions, including the acquisition of Rapiddo, ChefTime and FreshTime. It also allowed the company to make additional investments in LBS Local, the owners of Apontador, MapLink, Cinepapaya and TruckPad.

Bundling an empire

In 2015, after a handful of investments in food-related startups, Movile’s appetite for the food and delivery space continued to grow. Naspers and Innova Capital infused another $40 million (Series E) into Movile in 2016. Movile then boosted its iFood and Just EAT platforms with another $50 million. With access to all of Movile’s resources, iFood quickly rose as a leader in online food delivery in Latin America, with 6.2 million monthly orders and a growing presence in multiple countries, including Brazil, Mexico, Colombia and Argentina.

Movile’s venture capital model became so successful that iFood replicated the same model themselves. iFood took part in more than 10 mergers and acquisitions, including the acquisition of SpoonRocket, a San Francisco-based online food delivery service. iFood acquired SpoonRocket’s technology to help it expand its reach across Latin America.

In 2016, Movile’s Rappido app acquired on-demand courier service 99Motos, and then Movile made investments in Sympla (a DIY-ticketing platform for events), while raising another $40 million (Series F) from Naspers and Innova Capital. By 2017, Movile raised an additional $53 million (Series G) from Naspers and Innova Capital, bringing Naspers’ share of Movile to 70 percent.

On the road to one billion

With no shortage of cash, Movile now has plans to put more than half of its latest $53 million Naspers investment into Rapiddo Marketplace. Movile believes they can transform the Rapiddo Marketplace into a one-stop-shop for a variety of consumer transactions ranging from food delivery and event tickets to refilling mobile credit and hailing rides. Included in this ambitious plan is a payments platform similar to PayPal called Zoop, which handles all digital payments and makes the Rapiddo Marketplace a single platform that can integrate many — if not all — of Movile’s other applications.

If a path does not yet exist, Movile will simply build, acquire or bundle its way to make it happen.

Movile’s mission is no easy feat; however, if the company is to achieve its goal of touching the lives of one billion people through its apps, there may never be a better time. Movile’s all-in-one mobile platform concept is reminiscent of China’s Tencent, which established a number of successful paid services based on its applications. Tencent is currently worth half a trillion dollars and rising, with investments from Naspers and earnings of almost $22 billion last year.

Tencent allows merchants in China to sell their products and receive payments through WeChat, China’s largest mobile messaging app used by more than one billion people. Using an application with widespread adoption and popularity, Tencent is able to continuously add layers and layers of services, precisely what Movile plans to do now with its mobile companies in Latin America.

Movile believes it can be just as successful as Tencent because the Latin American mobile market strikes a number of similarities with Southeast Asian countries. On the other hand, skeptics believe that since Latin America lacks a WeChat-like application to unify the region, it will be difficult to achieve the same level of success. But if we’ve learned anything from Movile, it’s that if a path does not yet exist, Movile will simply build, acquire or bundle its way to make it happen.

Wavy, Movile’s latest endeavor, could achieve this. The business, which bundles Movile’s 400+ content partner companies, 100 million active user base and 40 Latin American mobile carrier businesses, is already one of the largest global players in this space based on sheer numbers alone. The Wavy portfolio incorporates a wide range of products, including educational content and apps, B2B messaging services such as chatbots, SMS, RCS and voice messaging, as well as partnerships with companies in the gaming, bots and apps space.

The race is on among global mobile platform providers and device manufacturers to become the first to offer a total mobile user experience. However, there are very few companies that will ever be able to replicate the range of products and services Movile has developed, making it one of the most remarkable mobile success stories of our time — and one that’s not over yet.

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Chinese government admits collection of deleted WeChat messages

Posted by | Apps, Asia, China, Government, Mobile, privacy, Security, surveillance, Tencent, WeChat | No Comments

Chinese authorities revealed over the weekend that they have the capability of retrieving deleted messages from the almost universally used WeChat app. The admission doesn’t come as a surprise to many, but it’s rare for this type of questionable data collection tactic to be acknowledged publicly.

As noted by the South China Morning Post, an anti-corruption commission in Hefei province posted Saturday to social media that it has “retrieved a series of deleted WeChat conversations from a subject” as part of an investigation.

The post was deleted Sunday, but not before many had seen it and understood the ramifications. Tencent, which operates the WeChat service used by nearly a billion people (including myself), explained in a statement that “WeChat does not store any chat histories — they are only stored on users’ phones and computers.”

The technical details of this storage were not disclosed, but it seems clear from the commission’s post that they are accessible in some way to interested authorities, as many have suspected for years. The app does, of course, comply with other government requirements, such as censoring certain topics.

There are still plenty of questions, the answers to which would help explain user vulnerability: Are messages effectively encrypted at rest? Does retrieval require the user’s password and login, or can it be forced with a “master key” or backdoor? Can users permanently and totally delete messages on the WeChat platform at all?

Fears over Chinese government access to data held or handled by Chinese companies has led to a global backlash against those companies, including some countries (including the U.S.) banning Chinese-made devices and services from sensitive applications or official use altogether.

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Our digital future will be shaped by increasingly mobile technologies coming from China

Posted by | alibaba, alibaba group, Amazon, america, america online, Android, Apple, AWS, China, Column, eCommerce, Expedia, Facebook, Getty-Images, Google, Michael Moritz, Mobile, operating systems, Priceline, shanghai, smartphone, TC, United States, WeChat, world wide web, Yahoo | No Comments

Since the dawn of the internet, the titans of this industry have fought to win the “starting point” — the place that users start their online experiences. In other words, the place where they begin “browsing.” The advent of the dial-up era had America Online mailing a CD to every home in America, which passed the baton to Yahoo’s categorical listings, which was swallowed by Google’s indexing of the world’s information — winning the “starting point” was everything.

As the mobile revolution continues to explode across the world, the battle for the starting point has intensified. For a period of time, people believed it would be the hardware, then it became clear that the software mattered most. Then conversation shifted to a debate between operating systems (Android or iOS) and moved on to social properties and messaging apps, where people were spending most of their time. Today, my belief is we’re hovering somewhere between apps and operating systems. That being said, the interface layer will always be evolving.

The starting point, just like a rocket’s launchpad, is only important because of what comes after. The battle to win that coveted position, although often disguised as many other things, is really a battle to become the starting point of commerce.  

Google’s philosophy includes a commitment to get users “off their page” as quickly as possible…to get that user to form a habit and come back to their starting point. The real (yet somewhat veiled) goal, in my opinion, is to get users to search and find the things they want to buy.

Of course, Google “does no evil” while aggregating the world’s information, but they pay their bills by sending purchases to Priceline, Expedia, Amazon and the rest of the digital economy.  

Facebook, on the other hand, has become a starting point through its monopolization of users’ time, attention and data. Through this effort, it’s developed an advertising business that shatters records quarter after quarter.

Google and Facebook, this famed duopoly, represent 89 percent of new advertising spending in 2017. Their dominance is unrivaled… for now.

Change is urgently being demanded by market forces — shifts in consumer habits, intolerable rising costs to advertisers and through a nearly universal dissatisfaction with the advertising models that have dominated (plagued) the U.S. digital economy.  All of which is being accelerated by mobile. Terrible experiences for users still persist in our online experiences, deliver low efficacy for advertisers and fraud is rampant. The march away from the glut of advertising excess may be most symbolically seen in the explosion of ad blockers. Further evidence of the “need for a correction of this broken industry” is Oracle’s willingness to pay $850 million for a company that polices ads (probably the best entrepreneurs I know ran this company, so no surprise).

As an entrepreneur, my job is to predict the future. When reflecting on what I’ve learned thus far in my journey, it’s become clear that two truths can guide us in making smarter decisions about our digital future:

Every day, retailers, advertisers, brands and marketers get smarter. This means that every day, they will push the platforms, their partners and the places they rely on for users to be more “performance driven.” More transactional.

Paying for views, bots (Russian or otherwise) or anything other than “dollars” will become less and less popular over time. It’s no secret that Amazon, the world’s most powerful company (imho), relies so heavily on its Associates Program (its home-built partnership and affiliate platform). This channel is the highest performing form of paid acquisition that retailers have, and in fact, it’s rumored that the success of Amazon’s affiliate program led to the development of AWS due to large spikes in partner traffic.

Chinese flag overlooking The Bund, Shanghai, China (Photo: Rolf Bruderer/Getty Images)

When thinking about our digital future, look down and look east. Look down and admire your phone — this will serve as your portal to the digital world for the next decade, and our dependence will only continue to grow. The explosive adoption of this form factor is continuing to outpace any technological trend in history.

Now, look east and recognize that what happens in China will happen here, in the West, eventually. The Chinese market skipped the PC-driven digital revolution — and adopted the digital era via the smartphone. Some really smart investors have built strategies around this thesis and have quietly been reaping rewards due to their clairvoyance.  

China has historically been categorized as a market full of knock-offs and copycats — but times have changed. Some of the world’s largest and most innovative companies have come out of China over the past decade. The entrepreneurial work ethic in China (as praised recently by arguably the world’s greatest investor, Michael Moritz), the speed of innovation and the ability to quickly scale and reach meaningful populations have caused Chinese companies to leapfrog the market cap of many of their U.S. counterparts.  

The most interesting component of the Chinese digital economy’s growth is that it is fundamentally more “pure” than the U.S. market’s. I say this because the Chinese market is inherently “transactional.” As Andreessen Horowitz writes, WeChat, China’s  most valuable company, has become the “starting point” and hub for all user actions. Their revenue diversity is much more “Amazon” than “Google” or “Facebook” — it’s much more pure. They make money off the transactions driven from their platform, and advertising is far less important in their strategy.

The obsession with replicating WeChat took the tech industry by storm two years ago — and for some misplaced reason, everyone thought we needed to build messaging bots to compete.  

What shouldn’t be lost is our obsession with the purity and power of the business models being created in China. The fabric that binds the Chinese digital economy and has fostered its seemingly boundless growth is the magic combination of commerce and mobile. Singles Day, the Chinese version of Black Friday, drove $25 billion in sales on Alibaba — 90 percent of which were on mobile.

The lesson we’ve learned thus far in both the U.S. and in China is that “consumers spending money” creates the most durable consumer businesses. Google, putting aside all its moonshots and heroic mission statements, is a “starting point” powered by a shopping engine. If you disagree, look at where their revenue comes from…

Google’s recent announcement of Shopping Actions and their movement to a “pay per transaction model” signals a turning point that could forever change the landscape of the digital economy.  

Google’s multi-front battle against Apple, Facebook and Amazon is weighted. Amazon is the most threatening. It’s the most durable business of the four — and its model is unbounded on two fronts that almost everyone I know would bet their future on, 1) people buying more online, where Amazon makes a disproportionate amount of every dollar spent, and 2) companies needing more cloud computing power (more servers), where Amazon makes a disproportionate amount of every dollar spent.  

To add insult to injury, Amazon is threatening Google by becoming a starting point itself — 55 percent of product searches now originate at Amazon, up from 30 percent just a year ago.

Google, recognizing consumer behavior was changing in mobile (less searching) and the inferiority of their model when compared to the durability and growth prospects of Amazon, needed to respond. Google needed a model that supported boundless growth and one that created a “win-win” for its advertising partners — one that resembled Amazon’s relationship with its merchants — not one that continued to increase costs to retailers while capitalizing on their monopolization of search traffic.

Google knows that with its position as the starting point — with Google.com, Google Apps and Android — it has to become a part of the transaction to prevail in the long term. With users in mobile demanding fewer ads and more utility (demanding experiences that look and feel a lot more like what has prevailed in China), Google has every reason in the world to look down and to look east — to become a part of the transaction — to take its piece.  

A collision course for Google and the retailers it relies upon for revenue was on the horizon. Search activity per user was declining in mobile and user acquisition costs were growing quarter over quarter. Businesses are repeatedly failing to compete with Amazon, and unless Google could create an economically viable growth model for retailers, no one would stand a chance against the commerce juggernaut — not the retailers nor Google itself. 

As I’ve believed for a long time, becoming a part of the transaction is the most favorable business model for all parties; sources of traffic make money when retailers sell things, and, most importantly, this only happens when users find the things they want.  

Shopping Actions is Google’s first ambitious step to satisfy all three parties — businesses and business models all over the world will feel this impact.  

Good work, Sundar.

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Pinterest rolls out its own version of QR codes

Posted by | advertising, Mobile, Pinterest, qr codes, Startups, TC, WeChat | No Comments

 If you are walking around a retailer, you might have seen a sign or something along those lines posted to check out its Pinterest account for additional content or products — but there was not really a seamless way to get to that account. Taking a cue from the prevalence of QR codes around the world, Pinterest is rolling out its own variation of QR codes for retailers and brands. Read More

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Beijing’s public transport system gets an app for paying fares — but Apple isn’t invited

Posted by | alibaba, Android, Apple, Apple Pay, Asia, China, computing, e-commerce, mobile commerce, mobile payments, smartphones, technology, WeChat | No Comments

 Apple continues to be locked out of China’s massive mobile payments space. The latest reminder came this week when Beijing’s transportation system opened up to smartphone payments… via an Android app. Already Tencent’s WeChat Pay and Alibaba’s Alipay services dominate China’s mobile payment space, which is estimated to have processed $3 trillion last year,… Read More

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Now anyone can build features for Cola messenger

Posted by | Apps, imessage, iOS, messages, Mobile, mobile app, Social, Startups, WeChat | No Comments

4d2f871f-6ce6-4823-83d8-704ca4d8a79e Cola, a messaging app that integrates apps into chats, is opening up its developer kit today to enable anyone to build new apps.
The updated version available today comes with 12 “bubbles” that are essentially applications that run inside the messaging app. Users can share weather and flight information, gifs, and more without creating accounts with individual tools. The… Read More

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It might be time to stop looking for the WeChat of the West

Posted by | Apps, chat apps, chatbots, China, Column, Mobile, TC, Tencent, WeChat | No Comments

wechat I was recently in China, which meant I was living on WeChat. All my meetings were arranged through the app. I authenticated my identity for free Wi-Fi at shopping malls with WeChat. I checked in for a flight by scanning a QR code through WeChat. I watched office workers in Shenzhen pay for their lunches with WeChat. On the subway, most people were chatting with friends on… you know what… Read More

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Reports of the death of apps have been greatly exaggerated

Posted by | app stores, Apps, Column, facebook messenger, Google, Mobile, mobile apps, Snapchat, TC, Viber, WeChat, WhatsApp | No Comments

ios8 One of the problems with technology maturation frameworks like the Gartner hype cycle is that you never know where you stand. That is certainly the case with mobile apps today. Depending on whom you ask, the app economy is either poised for significant growth or about to take a serious nosedive. Read More

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