Tencent-Spotify inventory swap follows investments in Tesla, Snap and extra

Chinese language billionaire Pony Ma doesn’t flaunt his methods like Alibaba’s Jack Ma or Japanese mogul Masayoshi Son.

Pony Ma’s firm, Tencent, has moved with the stealth of its founder this 12 months, making a collection of investments in Western firms which can be vital, however not splashy: A 5 percent stake in Tesla, a 10 percent stake in Snap, an funding in Essential Products, and now, reportedly, a 10 percent stock swap with Spotify.

With the potential exception of social media firm Snap, these firms — a carmaker, a cellphone maker and a music streaming app — have little to do with WeChat and video video games, all a part of Tencent’s core companies.

But they do have one thing in frequent: They’re among the many few firms which can be thought-about contenders towards firms like Fb, Apple, Amazon and Google.

Tencent might not be well-known to American shoppers, but it surely lately grew to become the primary Asian tech firm to be valued over $500 billion, on the heels of firms like Facebook and Amazon. And its lengthy loved a ‘frenemy’ form of relationship with the largest U.S. Web corporations.

Amazon helped again Tencent’s funding in Important’s new cellphone, for instance, and Tencent-backed “League of Legends” is a well-liked attraction on Amazon’s gaming platform, Twitch. On the identical time, Tencent launched a U.S.-rival to Amazon Internet Companies.

Analysts have pointed to WeChat’s reputation in China as a significant problem for Apple — which in response has tried to beef up its personal messaging platforms and provide immediate cooperation with Chinese language lawmakers. (When requested about this relationship lately, Apple CEO Tim Prepare dinner mentioned, “I see Tencent as considered one of our greatest and finest builders,” and pledged to work extra with Tencent going ahead.)

Fb’s relationship with Tencent is maybe probably the most rivalrous. In accordance with a report in Bloomberg Businessweek, Fb CEO Mark Zuckerberg swooped in on Tencent’s talks to amass WhatsApp whereas Ma was recovering from again surgical procedure.

And along with its stake in Tesla, Tencent has additionally an autonomous automobile undertaking, a well being diagnostics platform, promoting providers, and different “moonshot” initiatives that ought to sound acquainted to any investor in firms like Alphabet.

As 2017 involves an in depth, it is extra clear than ever that Tencent is a silent menace to American expertise giants. The corporate lurks beneath the guise of mid-sized firms throughout Silicon Valley, able to ambush.

When critics have questioned whether or not upstarts like Snap or Spotify can tackle Fb and Apple, Tencent has come to their protection behind the entrance traces and strengthened their odds.

Maybe the enemies of Tencent’s enemies can look ahead to extra huge checks.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.

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