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No, Tencent isn’t about to burn Reddit down – TechCrunch

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No, Tencent isn’t about to burn Reddit down – TechCrunch

Ahoy, it’s doom and gloom for Reddit after the company welcomed investment from Chinese censorship overlord Tencent.

Well, not quite.

The reality is, in fact, it’s quite the opposite. In recruiting the company behind one of the internet’s largest and vibrant social networks — chat app WeChat — and countless blockbuster games, Reddit has pulled off a major coup and banked a huge amount of cash, both of which can help it grow to the next level.

But, right now, reports in the U.S. are suggesting otherwise. You might have seen a range of negative stories surface in the past week following Reddit’s latest round of investment — first reported by TechCrunch — which is led by Tencent and values the company at $3 billion.

Triggered by a Gizmodo story last week, fear is being stoked that a deal with the “Chinese censorship powerhouse” could lead Reddit awry and bankrupt its morality, well, whatever of that it has left. Reddit users, not ones to be slow on humor, have already plastered the site with content that would be forbidden in China, including Winnie the Pooh, the cartoon character often used to represent Chinese President Xi Jinping.

Gizmodo referred to Tencent as “one of the most important architects of the Great Firewall,” and that’s a refrain that has been repeated in countless other reports.

I get it, it‘s a delicious irony; one of the lawless parts of the internet combining forces with a company that aggressively monitors and censors its users. Plus, Reddit is already blocked in China.

But, unfortunately for Gizmodo, the fears are overblown and its descriptions of Tencent are at best naive and at worst deliberately misguided.

China’s censorship system

Tencent is no “architect” of China’s Great Firewall internet censorship program. It’s one of a number of companies which, from its success, finds itself a prominent target for the government with little room to wiggle out.

Tencent sits in an awkward position, for sure. It is the largest internet company in China — it became the first $500 billion firm in Asia last year — and that makes it a core part of the government’s ongoing campaign to control Chinese internet space.

After an unprecedented crackdown on the Twitter-like service Weibo in 2012, when the government closed down comments for three days, China’s censorship became more proactive rather than reactive. That approach leaves fewer traces, for one thing, and it allows Beijing to shift responsibility to the platforms themselves, which fear the repercussions of angering authorities.

That’s to say that today’s dynamic sees China’s top internet companies, including Tencent, instructed to monitor the content produced by their users and, where necessary, remove it.

Reddit CEO Steve Huffman delivers remarks on “Redesigning Reddit” during the third day of Web Summit in Altice Arena on November 08, 2017 in Lisbon, Portugal. Web Summit.

Censoring social networks is one thing, but censoring WeChat — Tencent’s prized asset and China’s top messaging app with more than a billion monthly users — is another thing altogether. Tencent has been roundly (and rightly) criticized for implementing a range of “silent” blocks that, for some terms, prevent messages from being sent or picked up by the receiver.

Likewise, it has also purged millions of accounts from WeChat following numerous rounds of government-led initiatives that crack down on media, pornography and unsubstantiated rumors.

Those crackdowns and censorship moves are not false, but Gizmodo is painting a picture that suggests Tencent is complicit in cleaning its slate.

The truth is that the company, even a company of its size, has no choice in the matter when the Chinese government comes knocking with demands. To ignore the summons, or fail to act, would cause Tencent — a publicly listed company — serious problems that would not reflect well for shareholders. Adhering to these demands is expensive and resource-intensive, as it requires a new “content checking” division with specialist employees hired and trained. In short, it is certainly not something companies willingly opt-in to.

A rite of passage

Tencent is definitely not in control of the agenda, as anyone with an eye on tech in China can tell you. The company suffered a poor end to 2018, in part because the Chinese government decided to freeze new game licenses.

That left Tencent unable to monetize its new roster of games, a situation that saw it lose countless hundreds of millions in revenue and saw its share price drop by nearly 50 percent between March and October. The freeze has only just thawed, with a handful of licenses tentatively distributed this year.

So much for the Chinese government looking after their own.

These issues affect every tech company in China with a meaningful presence. Getting hit by government demands and censorship requests is a rite of passage for tech startups in China, like a dreaded badge of honor that shows your service has grown suitably influential to be considered a threat.

That happened to ByteDance, the company behind TikTok, the current social darling for many U.S. media. Last year, its CEO was forced to issue a groveling apology after it had “overemphasized growth and scale over quality and responsibility.”

The company resolved to increase its content checkers (read, censorship police) from 6,000 to 10,000 people, a move likely made to appease the government. Still, it was made an example of, with a number of TikTok apps removed from app stores and shuttered on the word of authorities.

Welcome to the club!

But it isn’t just Chinese companies.

Tencent became Asia’s first $500 billion company thanks to a stock rally — today it is worth around $425 billion [Photographer: Qilai Shen/Bloomberg via Getty Images]

Choices

Apple, the self-proclaimed protector of freedom, removed every unlicensed VPN from its China-based App Store at the behest of the government in 2017. While, in a rare move that runs counter to its core privacy focus, it relented to state rules and agreed to store Chinese iCloud user data on Chinese soil, through a government-backed cloud service provider, no less.

The difference between Apple and the likes of Tencent and ByteDance is that the U.S. company has a choice. It entered China voluntarily and it has complied with free speech-quashing demands to keep its revenue flowing.

Tencent and ByteDance, as the biggest internet players, would have a tough time moving outside of their native China and remaining in business. Maybe, in today’s censorship-heavy era, some Chinese companies wish they had started out in Hong Kong or another domain, but few markets have the opportunity that comes with 800 million internet users.

The point is that they have no control over censorship demands and no leverage to push back. To blame them — and paint them as co-conspirators, even “architects” — is misleading.

Tencent, in fact, has a reputation as a skillful investor that can be an asset for non-Chinese companies.

Its capital and guidance helped Fortnite creator Epic Games completely revamp its business into the smash hit success that it is today. Elsewhere, Tencent is the largest single investor in Snap — CEO Evan Spiegel has said he often seeks its guidance — and its other deals include Tesla, Discord, Kik and more, none of which have resulted in the introduction of censorship.

Yes, Reddit and Tencent are strange bedfellows, but that’s exactly the point of venture capital. The best founders surround themselves with different opinions, perspectives and experiences to ensure that they are evaluating all possible strategies. Tencent can give Reddit unique insight which, for those who use it, can only be a net positive for the future health of Reddit’s business and continued service.

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Image recognition startup ViSenze raises $20M Series C – TechCrunch

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Image recognition startup ViSenze raises $20M Series C – TechCrunch

ViSenze, a startup that provides visual search tools for online retailers like Rakuten and ASOS, announced today that it has raised a $20 million Series C. The round was co-led by Gobi Ventures and Sonae IM, with participation from other backers including returning investors Rakuten and WI Harper.

Founded in 2012, ViSenze has now raised a total of $34.5 million (its last round was a Series B announced in September 2016). The Singapore-based company, whose clients also include Urban Outfitters, Zalora, and Uniqlo, bills its software portfolio as a “personal shopping concierge” that allows shoppers to find or discover new products based on visual search, automatic photo tagging, and recommendations based on their browsing history. ViSenze’s verticals include fashion, jewelry, furniture, and intellectual property.

ViSenze’s latest funding will be used to develop its software through partnerships with smartphone makers including Samsung, LG, and Huawei. The company has offices in Asia, Europe, and the United States, and claims an annual revenue growth rate of more than 200 percent. Other startups in the same space include Syte.ai, Slyce, Clarifai, and Imagga.

In a statement, Rakuten Ventures partner Adit Swarup said “When we first invested in ViSenze in 2014, retailers had just started seeing the benefits of powering product recommendations with image data. Today, ViSenze not only powers recommendations for the largest brands in the world, but has helped pioneer a paradigm shift in e-commerce; helping consumers find products inside their favorite social media videos and images, as well as initiate a search directly from their camera app.”

Other participants in the round included returning investors Singapore Press Holdings (SPH) Ventures, Raffles Venture Partners, Enspire Capital, and UOB Venture Management, as well as new investors Tembusu ICT Fund, 31Ventures Global Innovation Fund, and Jonathan Coon’s Impossible Ventures.

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Tesla prepares to offer Model 3 leasing to boost demand: Electrek

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Tesla prepares to offer Model 3 leasing to boost demand: Electrek

FILE PHOTO: A row of new Tesla Model 3 electric vehicles is seen at a parking lot in Richmond, California, U.S. June 22, 2018. REUTERS/Stephen Lam

(Reuters) – Elon Musk’s Tesla Inc is preparing to launch its leasing products for Model 3 to boost demand, news website Electrek said on Tuesday, citing an email sent to employees.

The email stated that employees will be able to lease a Model 3 within the next two weeks, Electrek reported citing sources familiar with the matter.

The email did not say when consumers could lease the sedan.

A Tesla representative said that no decision has been made about when Model 3 leasing will be available.

Over the past year, Tesla has talked about using leasing to boost demand for the Model 3, but the automaker has been reluctant to introduce the measure because of its effect on GAAP financials.

Reporting by Rishika Chatterjee and Philip George in Bengaluru; Editing by Lisa Shumaker

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Qualcomm urges U.S. regulators to reverse course and ban some iPhones

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Qualcomm urges U.S. regulators to reverse course and ban some iPhones

(Reuters) – Qualcomm Inc is urging U.S. trade regulators to reverse a judge’s ruling and ban the import of some Apple Inc iPhones in a long-running patent fight between the two companies.

FILE PHOTO: A Qualcomm sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai, China November 6, 2018. REUTERS/Aly Song/File Photo

Qualcomm is seeking the ban in hopes of dealing Apple a blow before the two begin a major trial in mid-April in San Diego over Qualcomm’s patent licensing practices. Qualcomm has sought to apply pressure to Apple with smaller legal challenges ahead of that trial and has won partial iPhone sales bans in China and Germany against Apple, forcing the iPhone maker to ship only phones with Qualcomm chips to some markets.

Any possible ban on iPhone imports to the United States could be short-lived because Apple last week for the first time disclosed that it has found a software fix to avoid infringing on one of Qualcomm’s patents. Apple asked regulators to give it as much as six months to prove that the fix works.

Qualcomm brought a case against Apple at the U.S International Trade Commission in 2017 alleging that some iPhones violated Qualcomm patents to help smart phones run well without draining their batteries. Qualcomm asked for an import ban on some older iPhone models containing Intel Corp chips.

In September, Thomas Pender, an administrative law judge at the ITC, found that Apple violated one of the patents in the case but declined to issue a ban. Pender reasoned that imposing a ban on Intel-chipped iPhones would hand Qualcomm an effective monopoly on the U.S. market for modem chips, which connect smart phones to wireless data networks.

Pender’s ruling said that preserving competition in the modem chip market was in the public interest as speedier 5G networks come online in the next few years.

Cases where the ITC finds patent violations but does not ban the import of products are rare. In December, the full ITC said it would review Pender’s decision and decide whether to uphold or reverse it by late March.

In filings that became public late last week ahead of the full commission’s decision, Apple for the first time said that it had developed a software fix to avoid running afoul of Qualcomm’s patent. Apple said it did not discover the fix until after the trial and that it implemented the new software “last fall.”

But Apple said that it would need six months to verify that the fix will satisfy regulators and to sell its existing inventory. Apple asked the full commission to delay any possible import ban by that long if the commission reverses the judge’s decisions.

In a filing late on Friday, Qualcomm argued that Apple’s disclosure of a fix undermined the reasoning in Pender’s decision and that the Intel-chipped phones should be banned while Apple deploys its fix.

“Pender recommended against a remedy on the assumption that the (Qualcomm) patent would preclude Apple from using Intel as a supplier for many years and that no redesign was feasible,” Qualcomm wrote. “Apple now admits—more than seven months after the hearing—that the alleged harm is entirely avoidable.”

Reporting by Stephen Nellis in San Francisco; Editing by Lisa Shumaker

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