PR crisis: 360 VS. Tencent

Yiwen Yu (Even)

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In 2010, there was a huge dispute between two of China’s most successful Internet service company and they took their grudge towards each other to the public. These two parties were Tencent and Qihoo that will be introduced as follows.

One party is the Tencent Holding Limited, which is the largest and the most successful Internet service company in China, providing mass media, entertainment, Internet and mobile phone value-added services and operate online advertising services.A1 Tencent’s well-known instant messager, Tecent QQ, is the world’s largest online community and has 612.5 million active users.A2 The other party is Qihoo. It is an Internet security service provider whose “360 safeguard” came to be China’s No.1 security software within the first year after launch, covering no less than 75% of China Internet users and thus becoming the second most popular desktop client software. Also, it capitalize on its 300 million clients base and develops free anti-virus software, browser etc. and achieves success as well.A3

Basically, they are not competitors. But Tencent sued 360 for unfair competition, claiming that 360 violated the account users’ private security. 360 denied that and also claimed that Tencent obtained a huge amount of profits by scanning accounts’ users’ hard disk. Both of them called names through desktop pop-ups. During the warB, some monitor tools like Microsoft Process Monitor, Comodo and AVG discovered that QQ was not normal chatting software. Especially AVG reported QQ as a spyware. Then many QQ users said that their QQ had been installed a third-party advertising plug-in unit. On the side of Tencent, it united other IT companies to issue a joint sstatement boycotting 360, which were Baidu, Kingsoft, Maxthon and Keniu. Those are the biggest Chinese searching engine provider, a famous professional security software provider in Chinese domestic market, a professional and popular browser producer, and a new security software producer, respectively. It seems like that Tencent’s preparation was very comprehensive. However, in this battle array some companies’ tools or software were not as good as 360, which helped 360 gained more supporters. This situation directly caused QQ lost about 60% users. Ultimately, Tencent decided not to be compatible with 360 and asked users to make the only option between QQ and 360. As a result, a majority of users chose 360 and transferred to using other instant messengers such as MSN. Simply, Tencent lost the game.

Based on the specific information about the war listing as Appendix B, I think Tencent didn’t handle well with this problem in the PR crisis.

  1. Tencent PR team didn’t react at a right timing. They did not try to solve the problem completely at the beginning of the war, instead, kept attacking 360 and was not honest about their own products.
  2. Tencent PR instrumentality created serious lapses in the union with other companies. Because some members of its union were 360’s defeated opponents, the users would definitely supported 360 more than Tencent.
  3. Tencent PR team only published two letters to explain the problems that 360 mentioned to the public. However, writing letters were too simple to gain trusts from users.
  4. Tencent PR team gave a press conference to the public, but what is funny that the manager of PR department cried in the conference. First, it shows obviously the failure of the PR team because what users or the public needs were the explanation. They must be professional to deal with the problem, not in this way. Also, it showed how fragile the team was. Any one will suffer stresses, especially successful people. It is related to a large company reputation. How come a manager of the PR department couldn’t undertake the responsibility and solve the problem positively as a good leader.

In short, Tencent’s market capitalization is currently the world’s third largest Internet company. It had the opportunity to become one of the high-end level enterprises like Microsoft, Google and Apple. But with the rapid growth and development for these years, it was short-sighted in profit earnings and ignored the enterprise’s own brand image, which led itself to be farther and farther away from Microsoft, Google and Apple.

Appendix A

1 Biographical Dictionary of New Chinese Entrepreneurs and Business Leaders: http://books.google.com/books?id=24P3M4hrpWwC&pg=PA111&dq=Ma+Huateng&hl=en&ei=KyJ0TPO8MovQsAOjyPmcCA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCcQ6AEwAA#v=onepage&q=Ma%20Huateng&f=false

2http://im.qq.com/online.shtml#live

3360 vs QQ, Internet security company picks fight with China’s NO. 1 software giant: http://www.chinahush.com/2010/10/31/360-vs-qq-you-steal-private-information-oh-yeah-your-wealthy-ceo-cheats-housing-allowance/

Appendix BA3

The war:

Oct 11th, 360 released China’s first “privacy protection white paper” to account for its recent new software “360 privacy protector”. 4 hours later, Tencent declared in the name of “QQ product team” that 360 was discrediting QQ, and unprecedentedly push the message to its 100 million online QQ users through pop-outs. The fight leads to Tencent prosecuting 360 in form for unfair competition. In turn, 360 released 3 comments on the lawsuit, saying will begin countercharge Tencent for defaming 360 with pornography connection and blocking the downloading page of “360 privacy protector”.

QQ pop-up (upper) says:

“QQ Product Team’s official Statement: Recently one company launches privacy protector, framing QQ spying on users’ private files. We hereby asseverate that Tencent always values privacy protection, and never spys on users’ privacy. We urge users to keep clear mind to distinguish wrong from right, do not fall for one company’s security threatening trap.”

360 pop-up (lower one) says:

“360 Was Revenged upon by Tencent for Protecting User Privacy: Since 360 privacy protector exposed QQ’s suspicious spy on user privacy, 360 has been revenged upon by Tencent’s whole network pop-ups. Latest evidences show that QQ in the disguise of “Super blacklist” has been scanning users’ hard drives as a way to make huge profits.

Tencent’s thirst for profit is not limit to this. According to media exposure, Tencent CEO Ma Huateng is worth nearly 30 billion yuan, yet he still claims housing allowances.”

Fuse:

Tracing a few years back, we can see how one thing leads to another, and come to understand what the fuss is all about.

In late 2006, Tencent launched QQ Doctor 1.0, a small anti-Trojan tool to protect QQ user account. But as 360 grows into the country’s second popular desktop client, Tencent smells threat.

Jan 21st, 2010, QQ Doctor 3.2 launched with an interface that assembles 360 safeguard. Meanwhile, it was giving out half-year free trial of Norton Anti-Virus. According to 360, QQ Doctor forced its way into approximately 100 million computers overnight, market share skyrocketed to 40% during the Spring Festival.

360 was sensitive enough to call back some of its employees on Spring Festival off to counter QQ’s sudden challenge. Soon, 360 Safeguard users was reminded that “the debug plugin installing by QQ Doctor bears danger, stopping installation is recommended.”

Due to 360’s quick reaction and QQ Doctor’s premature launch, many people uninstalled QQ Doctor, making its market share drop below 10%.

May 25th, 2010, founder of 360 Zhou Hongyi wrote over 40 posts on his own Netease Weibo (tweeter), telling the bitter story between 360 and Kingsoft (another anti-virus software). Pissed Kingsoft sued 360 who in turn crossed action. And ranting goes on and on between the two. Seeing the two fighting, Tencent captured the opportunity to secretly upgrade its QQ Doctor to 4.0 and switched its name to QQ Computer Keeper, which added all of 360’s popular functions such as cloud anti-Trojan, plugin clearer etc. The user experience it created was almost the same as that by 360.

During the mid-autumn festival break in September, many QQ users noticed that their QQ Software Manager and QQ Doctor were upgraded to QQ Computer Keeper without any reminder. Though there is no solid data to tell exactly how many installation/upgrade, the act is said to raise the market share of QQ Computer Keeper in scale.

Covering 360 Safeguard’s main functions such as security protection, system maintenance and software management etc.,  and with QQ’s unbeatable user base, the upgraded QQ Computer Keeper is believed to pose direct threat to 360’s survival in the field of Internet Security.

Again, sensitive 360 reacted immediately. On Sept 27th, 360 launched its Privacy Protector to go face to face against QQ by reminding users that “some” chatting software was spying on client system’s private files and data without consent. The Privacy Protector also claimed that it can monitor and expose such unethical behavior of QQ.

Pending result:

And that is how the war breaks out. 360 brings the issue of privacy to the public and successful triggers netizen’s concerns and panic about QQ client software. According to an online survey conducted by Netease, 60% out of 3140 netizens choose to uninstall QQ software first when QQ and 360 have conflicts living on their desktop. (The poll starts from Sept 27 till now.)

The war between 360 and Tencent QQ actually reflects the fierce competition to conquer user desktop. Tencent has 600 million loyal users, it wants to finish 360 through packaged installation; whereas 360 holds its “security” shield to undermine QQ’s loyalty base by using user’s fear. However, who wins the client terminal war is not very important to us users, all we hope for is peace for our desktop.

Another resource for using QQ, one of the most popular chat/social media tool in China! pretty cool!!

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