What the hack were they up to, MH370?


HackingHackers target information on MH370 probe

The computers of high-ranking officials in agencies involved in the MH370 investigation were hacked and classified information was stolen.

The stolen information was allegedly being sent to a computer in China before CyberSecurity Malaysia – a Ministry of Science, Technology and Innovation agency – had the transmissions blocked and the infected machines shut down.

The national cyber security specialist agency revealed that sophisticated malicious software (malware), disguised as a news article reporting that the missing Boeing 777 had been found, was emailed to the officials on March 9, a day after the Malaysia Airlines (MAS) plane vanished during its flight from Kuala Lumpur to Beijing.

Attached to the email was an executable file that was made to look like a PDF document, which released the malware when a user clicked on it.

A source told The Star that officials in the Department of Civil Aviation, the National Security Council and MAS were among those targeted by the hackers.

“We received reports from the administration of the agencies telling us that their network was congested with email going out of their servers,” said CyberSecurity Malaysia chief executive Dr Amirudin Abdul Wahab.

“Those email contained confidential data from the officials’ computers including the minutes of meetings and classified documents. Some of these were related to the MH370 investigation.”

About 30 computers were infected by the malware, CyberSecurity Malaysia said. It discovered that the malware was sending the information to an IP address in China and asked the Internet service provider in that region to block it.

An IP (Internet Protocol) address is a unique numerical label assigned to each device on a computer network.

“This was well-crafted malware that antivirus programs couldn’t detect. It was a very sophisticated attack,” Amirudin said.

The agency and police are working with Interpol on the incident.

CyberSecurity Malaysia suspects the motivation for the hacking was the MH370 investigations.

“At that time, there were some people accusing the Government of not releasing crucial information,” Amirudin said. “But everything on the investigation had been disclosed.”

Flight MH370 with 239 on board went missing on March 8 about 45 minutes after take-off.

Expert: Spearphishing needs a lot of planning and work

Hacker Anatomy of Spearphishing attack

Spearphishing attacks such as the ones that targeted the Civil Aviation Department and the National Security Council require a lot of planning and work, said a cyber security expert.

These point to either a very skilled attacker or group of hackers who have the know-how to spoof an email address to make it appear as if the message is coming from a familiar sender, said Dhillon Kannabhiran.

He is chief executive of Hack In The Box which organises the annual HITBSecConf series of network security conferences.

He said that sensitive and confidential documents should always be encrypted as an added layer of security against hackers.

How sophisticated an attack was, Kannabhiran said, depended on which version of the Microsoft Windows operating system was on the victim’s computer and how up to date the system security was.

By Nicholas Cheng, The Star/Asia News Network

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USA Today: US print newspapers break-ups without financial support


Gannett, publisher of USA Today and dozens of other newspapers, became the latest to unveil its plan, splitting its print and broadcast operations into two separate units in a move to ‘sharpen’ the focus of each. – AFP

Washington (AFP) – Following an unprecedented series of spinoffs by major US media companies, the print news industry now faces a rocky future without financial support from deep-pocketed parent firms.

The wave of corporate breakups comes with newspapers and magazines struggling in a transition to digital news, and shareholders of media conglomerates increasingly intolerant of the lagging print segment.

Gannett, publisher of USA Today and dozens of other newspapers, became the latest to unveil its plan, splitting its print and broadcast operations into two separate units in a move to “sharpen” the focus of each.

This follows the recently completed spinoff by Tribune Co. of its newspaper group, which includes the Los Angeles Times and Chicago Tribune, and Time Warner’s separation of its magazine publishing group Time Inc.

Two other newspaper groups, EW Scripps and Journal Communications, announced last month they would merge and then spin off their combined newspaper operations while creating a separate entity focused on broadcasting and digital media.

The trend arguably took hold last year with Rupert Murdoch’s split of his empire into separate firms focused on media-entertainment and publishing — 21st Century Fox and the newly structured News Corp.

- ‘Cast out of house’ -

The wave of spinoffs “certainly plays into the perception that these are children being cast out of the house by their parents,” said Mark Jurkowitz, associate director of the Pew Research Center’s Journalism Project.

Newspapers were snapped up by media groups in an era when print was hugely profitable, but other segments of the media conglomerates are now driving profits, such as local television.

“The market doesn’t think much of the newspaper industry’s future,” Jurkowitz said.

Industry consultant Alan Mutter argues that publicly traded newspaper firms still produce an average profit margin of 16 percent, higher than that of Walmart and Amazon.

But Mutter said on his blog that profits and newsroom staffing have taken a huge hit in recent years, and that newspapers have failed to do enough in the digital arena.

“Rather than reliably ‘owning’ their audiences as they once did in print, the internal metrics at every newspaper show an increasing dependence on the likes of Google, Facebook and Twitter to generate the traffic that is the lifeblood of any media enterprise,” he said.

Dan Kennedy, a journalism professor at Northeastern University, said newspapers are recovering from the negative impact of earlier corporate tie-ups.

“It’s really corporate debt and the expectations of Wall Street that have done as much to damage the newspapers business as Craigslist,” Kennedy told AFP.

“Newspaper margins are still pretty good. And when you have newspapers owned by private companies without debt, some of them are doing pretty well.”

Some analysts say that the breakup of big media firms may force publishers to create ways to connect with readers online. “The real problem with newspaper industry has not been with the dead tree part, it is the failure to monetize the digital eyeballs,” Jurkowitz said.

“Unless there is an increase in digital revenue streams it’s hard to imaging them getting out of the situation they are in.”

The industry is closely watching the efforts of newspapers like the New York Times, which is experimenting with new digital access plans, and the Washington Post, which under new owner Jeff Bezos has boosted online readership to record highs.

- ‘Not the death phase’ -

Kennedy said that while newspapers may be profitable and an important part of the community, they may not be able to meet Wall Street’s expectations for growth.

“It’s not a growing business,” Kennedy said.

Private owners can still keep the business in the black, said Kennedy, citing the record of Boston Globe’s new owner, sports magnate John Henry.

But he said that newspapers need to make considerable investments “to make a smart transition to digital” in the coming years.

Peter Copeland, a former Scripps Howard News Service editor and general manager who now is a media consultant, said the breakups are logical and generally positive for newspapers.

“It’s better for the newspapers and TV to be separate,” Copeland said. “They were never a match. They are very different businesses.”

Now, he said the owners “will be able to focus 100 percent on the newspapers.”

Copeland said newspapers may end up severing their corporate ties and going back to their roots of local and private ownership.

“Newspapers always had difficulty” being part of corporate empires, said Copeland.

“I think newspapers are entering another phase. It’s not the death phase, it’s just another phase in the life cycle.” – AFP

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Let us talk money, honey!


Money Talk_honey

IN the old days of match-making, parents ask their prospective son-in-law about his income so that they can assess if he was able to support their daughter comfortably or at least to the level of what she’s been used to.

I suppose this was to ensure a longer lasting marriage.

While having a lot of money is not the cure-all to marital ills, financial issues are apparently a predictor of marriage breakdowns, according to a study done by Dew, Britt and Huston titled Examining the Relationship Between Financial Issues and Divorce.

In modern times, talking about money is a bit insensitive – rendering the person asking like a gold digger.

But perhaps it is actually something practical that we should be talking about to ensure the relationship has another one-up chance of survival.

After all, we are so hung up on making sure our partner has similar interests, complementary goals, good emotional intelligence, and some intelligence quotient. Surely the financial alignment is important,too.

While I do agree that it is quite hard to ask bluntly how much a person is earning on the first or second date,it maybe all right to ask:

1)What is your money management style? Do you pay your self first or last?

2)What percentage of your income do you save?

3)How are you planning for retirement?

4)Which do you think is more important – earning more money or saving more money?

5)How do you feel about sharing financial information with your partner?

6)On a scale of1to 10, how do you think you fare in the money manager role?

7)How do you feel if you have less than three months’ emergency money?

These questions may get you a lot of different responses, and from these responses you get a better gauge about your prospective partner’s view on personal finance.

After all, it’s not about how much money is made but rather how well that money is managed that is the most important.And also, this may help avert a marital disaster.



By AMELIA HONG AND
SENIOR VICE-PRESIDENT OF
SUCCESS CONCEPTS LIFE PLANNERS
The writer can be contacted info@successconcepts.biz
 

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Let the sunshine & natural light in for better health, quality life, more sleep at night


Sunshine_windowsA study has concluded that windows in the workplace could mean up to 173% more white light exposure during the day and an average of 46 minutes more sleep at night. – AFP

A STUDY from Northwestern Medicine and the University of Illinois at Urbana-Champaign indicates that all-day exposure to natural light, even by means of a window, leads to longer sleep duration at night, as well as increased physical activity and quality of life.

“There is increasing evidence that exposure to light, during the day, particularly in the morning, is beneficial to your health via its effects on mood, alertness and metabolism,” says senior study author Dr Phyllis Zee, a Northwestern Medicine neurologist and sleep specialist.

The study was conducted on office workers, and windows in the workplace could mean up to 173% more white light exposure during the day and an average of 46 minutes more sleep at night, researchers concluded.

They also noted a trend of workers with more light exposure being more physically active than their counterparts.

In the study, researchers surveyed 49 day-shift office workers, of which 27 worked in windowless offices and 22 had windows in their offices.

Quality of life and everything health-related was self-reported, whereas sleep was assessed by means of the Pittsburgh Sleep Quality Index (PSQI).

A subset of 21 participants was surveyed for light exposure, activity and sleep by means of actigraphy. Ten of these participants worked in windowless environments and 11 hailed from workplaces with windows.

Actigraphy logs ambulatory physiological data, in this case motion and light illuminance, by means of a scientific wearable device.

“Light is the most important synchronizing agent for the brain and body,” says Ivy Cheung, co-lead author and Ph.D. candidate in neuroscience in Zee’s lab at Northwestern. “Proper synchronization of your internal biological rhythms with the earth’s daily rotation has been shown to be essential for health.”

Sunlight is an important source of vitamin D and a CDC report indicates sun exposure is important even for breast-fed babies, despite the high quantities of vitamin D in breast milk.

The study was published in the Journal of Clinical Sleep Medicine. – AFP Relaxnews

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Are the problems of Malaysia Airlines, symptomatic in other government-linked companies?


MAS logo_girlsLots of public funds will be spent to make things right at MAS, and it will start with the RM1.4bil takeover of the airline.

THE events of MH370 and MH17 have soured the operations of Malaysia Airlines (MAS), where the extent of the damage from these events on its financials will be more accurately shown when the airline reports its quarterly figures next week.

While these tragedies have led to MAS’ major shareholder, Khazanah Nasional Bhd, offering to not only take the company private but also undertake what appears to be an exhaustive overhaul of the airline’s operations, the problems at MAS have been simmering for a long time now.

The airline has been losing money for some time, and previous turnaround plans, in hindsight, were akin to applying bandages when major surgery was needed. Previous turnaround plans might have just delayed what needs to be done now.

But all gloves are off with the upcoming overhaul when it comes to salvaging MAS. Political will appears to be there, judging from comments made by the Prime Minister and the airline will undergo a big transformation on how it operates.

Lots of public funds will be spent to make things right at MAS, and it will start with the RM1.4bil takeover of the airline. The overhaul of MAS should be more than just cosmetic or quick fixes.

While the airline’s revenue will surely slump, MAS also has to deal with its cost. As it stands, experts have pointed out that the size of its cost structure is one that supports a far larger network than what MAS currently operates.

Tackling costs won’t be easy also, given that it is a government-linked company (GLC) with social obligations. In fact, MAS, like its other GLC brethren, has commitments that most private companies just don’t have.

Will the overhaul of MAS take into account just how far it needs to go to remove a certain portion of such obligations, and if it is happening in MAS, are other GLCs too shouldering the same kind of burden as MAS is?

It has been long suspected that the airline has been losing lots of money due to leakages and some have even alluded to political interests having their fingers in the pie.

Khazanah should undertake a thorough review of the supply chain, and conduct forensic accounting if needed to ensure corruption is weeded out of the company. MAS needs to make sure that the services and supplies bought are at market rates and of a fair value.

For Khazanah, it needs to revisit its GLC transformation programme and see whether it has been as effective as what the market expected it to be. There has been a series of colourful books and manuals issued, and among them, the red book. Just how far have the initiatives of the red book, which deal with procurement, been successful in reducing costs?

But the need to ensure support for its social obligations can be tough on a GLC. For one, if the contracts given or services and goods acquired are inflated beyond an acceptable amount, then it will just balloon cost. Social obligations that relate to the need for support to help companies grow in scale is understandable, but not handouts.

Even Petroliam Nasional Bhd president and chief executive officer Tan Sri Shamsul Azhar Abbas has inferred that there is pressure from Government interference and the need to back vendors that charge quite a bit above market prices.

If such pressure is existent in the national oil company that is different from other GLCs, then one can hypothesise that such pressure is prevalent among GLCs.

There needs to be a balance between social obligations and market value. GLCs cannot go on supporting programmes at inflated costs if the companies they are supporting have not shown improvements or are detrimental to their own well-being. This is because doing so will have a telling effect on the performance of the companies.

Should its costs become inflated as a result of such support, then there could be implications on the performance of the GLCs. For one, investors will make that distinction and attach a lower market multiple for GLC companies compared with its private-sector peers. Some will say that it is already being seen in some GLCs.


By: JAGDEV SINGH SIDHU The Star/Asia News Network

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Japanese surrendered on Aug 15: It’s dangerous for Japan to sow seed of war; hard to warm up frozen ties with Tokyo


Video: 8.15, remembrance of the Chinese suffering and victory over Japanese invasion

It is dangerous for Japan to sow seed of war

BEIJING, Aug. 15 (Xinhua) — To mark the 69th anniversary of its defeat in the World War II, the Japanese government has, as usual, duly advised its citizens to observe one minute of silence in honor of the deceased.

Prime Minister Shinzo Abe, however, has a separate agenda. Despite the cancellation of a planned visit, he sent an offering Friday to the notorious Yasukuni Shrine, which honors top war criminals, through his aide Kouichi Hagiuda.

Such a show of “compromise and sincerity,” as some put it, is hardly acceptable, particularly given the recent barrage of remarks and moves by Japan’s rightist politicians which lay bare their unrepentant attitude toward the WWII.

One who forgets and denies history does not deserve a future. It has become a matter of urgency for the current Japanese leaders to truly reflect upon the lessons of history so as to avert a risky future.

During the WWII, a militaristic Japan ruthlessly trampled over its Asian neighbors and slaughtered tens of millions of people there. Yet, Japan was also considered a victim of the war as countless innocent civilians in the country were killed by U.S. nuclear retaliation.

The unconditional surrender of Japan in 1945 put an end to the bloody war in the Asia-Pacific and ushered in a new era of peace and development for the whole region, including Japan, which has since kept its extreme right-wing forces in check and tugged itself out of the quagmire of war.

Remarkably, Japan has created an enduring economic miracle which saw it once grow into the world’s second largest economy.

It is reasonable to say that Japan’s post-war success has testified the fact that peace, not war, is the cornerstone for development.

Sadly, a new generation of rightists in the country have chosen to ignore that. With Prime Minister Abe at the helm, Japan, bent on shaking off its war-renouncing pacifist reins, has once again embarked on a precarious path and blatantly challenged the post-war international order of peace.

By doing this, Japan is sowing the seed of another war.

Notably, the Abe administration has sugarcoated its military ambitions with rhetoric touting “peace” and “security,” while former Japanese militaristic rulers had used similar tactic to disguise their unquenchable thirst for aggression.

What has also sounded the alarm is that Japan has been deliberately flexing its muscles against China. From the purchase and naming farce of China’s islands, to the constant hyping up of China’s “military buildup,” Japan’s increasingly provocative actions are not only tearing the two nations further apart, but also putting the hard-won peace and security in the whole region at stake.

Some might say history always repeats itself, yet it is unwise for Japan to reckon that China, along with other WWII victims as well as those peace-loving people on its own land, would stand idle in face of the brewing threats of war.

It is highly advisable for those who did wrong in the past to stop playing with fire and avoid leading their country further down the dangerous road.

By Lili Xinhua

Hard to warm up frozen ties with Tokyo

As the 69th anniversary of Japan’s surrender in WWII, August 15 has become the perfect time for Japanese nationalists to put on a farce to draw world attention. Will Japanese Prime Minister Shinzo Abe visit the notorious Yasukuni Shrine? This has become the most disconcerting mystery in the geopolitics of Northeast Asia.

Abe released some messages, saying he wouldn’t visit the Shrine. But media outlets guessed he might offer tribute instead. This could be called a positive signal sent to China from a Japanese perspective. It was also reported that he is looking forward to having a bilateral meeting with Chinese leaders at the forum of Asia-Pacific Economic Cooperation (APEC) in Beijing in November.

Bitter confrontations over historical issues have dragged both China and Japan into a tug-of-war. With years of friendliness buried, China and Japan seem to be locked into a blood feud.

The conflicts over historical issues are no longer limited to different understandings of history. They have become a major manifestation of the geopolitical rivalry between both sides. A sober mind can tell that such a conflict can only result in a lose-lose situation: Japan is losing its upper hand in the international community due to its irresponsible attitude toward history, and China has spent too many unnecessary resources and attention on it.

But now, it could be anticipated that warming Sino-Japanese ties are still impossible, even though Abe acted mildly on the Yasukuni Shrine issue this year and Chinese leaders might meet him at the APEC forum.

On historical issues, both sides are just speaking to themselves. These issues have become a battle of public opinion in the international community. In this case, only national strength matters.

Japan was the side which took the initiative in the historical issues, as it was in full authority of whether to visit the Shrine and revise history books. But China has established a system to penalize provocative Japanese government officials. China has got back part of the initiative. The fact that China is getting used to the political deadlock and carries forward economic cooperation also requires full attention. The unfolding tensions between both nations have not inflicted many losses on China, which is able to sustain a long-term standoff with Japan.

China’s rise has changed many foundations of the former Sino-Japanese ties, and we must accept and get adapted to the fundamental changes.

The biggest force that can transform Sino-Japanese relations is the rise of China. It probably won’t make Japan and China regain rapport, but it will drive Japan to assess the outcome of a full confrontation with China.

In the past 20 or 30 years, China has not been engaged in such tense relationship with a major power as it does with Japan. There are so many uncertainties ahead, and Japan is destined to offer unavoidable and significant challenges to China’s confidence and patience when the latter is rising.

Source: Global Times Published: 2014-8-15 0:23:01

69 years later, Japan still unrepentant after nuclear attacks from US

Sixty-nine years ago, mushroom clouds rose over major population centers for the first (and fortunately, only) time in the history of warfare. At approximately 8:16 a.m. on August 6, 1945, the U.S. dropped an atomic bomb on the Japanese city of Hiroshima. Three days later, the Army Air Force dropped a second bomb on Nagasaki.

Nagasaki mayor questions policy on A-bomb day

TOKYO – The mayor of Nagasaki criticized Prime Minister Shinzo Abe’s push toward Japan’s more assertive defense policy, as the city marked the 69th anniversary of the atomic bombing.

Nagasaki mayor questions policy on A-bomb day
Nagasaki Mayor Tomihisa Taue reads out the Peace Declaration at the Peace Park in the city on Aug. 9, 2014, during a ceremony marking the 69th anniversary of the U.S. atomic bombing of the city. [Photo/IC]

In his “peace declaration” speech at the ceremony in Nagasaki’s Peace Park, Mayor Tomihisa Taue urged Abe’s government to listen to growing public concerns over Japan’s commitment to its pacifist pledge.

Thousands of attendants, including US Ambassador Caroline Kennedy and a record number of representatives from 51 countries, offered a minute of silence and prayed for the victims at 11:02 a.m., the moment the bomb was dropped over Nagasaki on Aug 9, 1945, as bells rang. They also laid wreaths of white and yellow chrysanthemums at the Statue of Peace.

The US dropped two atomic bombs on Japan in August 1945, prompting Tokyo’s World War II surrender. The first on Hiroshima killed 140,000 people and the Nagasaki bomb killed another 70,000.

The anniversary comes as Japan is divided over the government’s decision to allow its military to defend foreign countries and play greater roles overseas by exercising what is referred to as collective self-defense. To achieve that goal, Abe’s Cabinet revised its interpretation of Japan’s war-renouncing constitution.

Pacifism, enshrined in the constitution, is the “founding principle” of postwar Japan and Nagasaki, Taue said.

“However, the rushed debate over collective self-defense has prompted concern that this principle is shaking,” he said. “I strongly request that the Japanese government take note of the situation and carefully listen to the voices of distress and concerns.”

Polls show more than half of respondents are opposed to the decision, mainly because of sensitivity over Japan’s wartime past and devastation at home.

Representing the Nagasaki survivors, Miyako Jodai, 75, said that Abe’s government was not living up to expectations.

Jodai, a retired teacher who was exposed to radiation just 2.4 kilometers (1.5 miles) from ground zero, said that the defense policy that puts more weight on military power was “outrageous” and a shift away from pacifism.

“Please stand by our commitment to peace. Please do not forget the sufferings of the atomic bombing survivors,” Jodai said at the ceremony.

The number of surviving victims, known as “hibakusha,” was just more than 190,000 this year across Japan. Their average age is 79. In Nagasaki, 3,355 survivors died over the past year, while 5,507 passed away in Hiroshima.

Abe kept his eyes closed and sat motionless as he listened to the outright criticism, rare at a solemn ceremony.

In his speech, he did not mention his defense policy or the pacifist constitution. He repeated his sympathy to the victims and said Japan as the sole victim of nuclear attacks has the duty to take leadership in achieving a nuclear-free society, while telling the world of the inhumane side of nuclear weapons.

The speech had minor tweaks from last year’s, after Abe faced criticism that the speech he delivered in Hiroshima was almost identical to the one from the previous year, Kyodo News reported.

Nagasaki mayor questions policy on A-bomb day
Japanese Prime Minister Shinzo Abe (2nd from L) offers a moment of silent prayer at 11:02 am on Aug 9, 2014, the exact time the US atomic bomb was dropped 69 years ago, during the ceremony at the Peace Park in Japan’s southwestern city of Nagasaki.[Photo/IC]
Nagasaki mayor questions policy on A-bomb day
Nagasaki residents pray and place lanterns on Motoyasu river to commemorate the victims of the bombing 69 years ago.[Photo/IC]
- China Daily/Asia News Network

Hiroshima nuclear bombing, 69th anniversary: 8:15am, the moment Japan will never forget, until ..

China’s Internet giants, Tencent to undercut Alibaba with billion chat app users


CHINA's Internet giants


Tencent Holdings Ltd. (700) faces the prospect of losing its position as Asia’s most-valuable Internet company this year after Alibaba Group Holding Ltd. (BABA) goes public. The Shenzhen-based company isn’t going to concede quietly.

Tencent is taking on Alibaba in almost every business related to the Web, from games to security to search. In the latest escalation of the battle, Tencent is expanding in messaging services and using the technology to drive customers to its e-commerce partners — in a direct challenge to its rival.

The fight exposes a rare vulnerability for Alibaba, which is planning an initial public offering that may be the largest in U.S. history.

Tencent has an enormous lead in messaging, with about a billion users for its QQ and WeChat products, compared with Alibaba’s last target of 100 million for its offerings.

Tencent is projected to report a 52 percent surge in profit when it announces second-quarter results today, bolstered by messaging.

“Tencent is using Mobile QQ and WeChat to take traffic away from Alibaba and direct people to e-commerce platforms backed by itself,” said Bill Fan, a Hong Kong-based analyst at China Securities Co. “Instant messaging hasn’t been Alibaba’s strong point, but it sees the viral effect that Tencent’s app is having so it’s trying to develop similar services.”

Photographer: Brent Lewin/Bloomberg Alibaba Group Holding Ltd., 24 percent owned by Yahoo! Inc., is competing with Tencent… Read More

Tencent’s two technologies let people trade messages over mobile phones and tablets, akin to the WhatsApp service that Facebook Inc. (FB) agreed to acquire this year for $19 billion.

QQ, which began as an instant-messaging service on desktop computers and was repurposed for use on mobile devices, has about 848 million monthly active users. WeChat, known as Weixin in China, has 396 million. (WhatsApp has more than half a billion active users.)

Most Valuable

The success of the messaging services has helped boost Tencent’s market value to about $161 billion, making it the most valuable Internet company in Asia.

Alibaba will compete for that title after it goes public. The latest estimate is that after the IPO the company could be valued at $187 billion, according to a survey of 11 analysts by Bloomberg. Tencent shares declined 0.2 percent as of 9:52 a.m. in Hong Kong trading, while the benchmark Hang Seng Index was unchanged.

Alibaba is trying to close the gap in messaging. In September, it started offering a service called Laiwang. Still, Tencent has continued to expand the features available through its apps to maintain its lead

Photographer: Brent Lewin/Bloomberg
QQ and WeChat helped triple Tencent’s mobile-game revenue to 1.8 billion yuan in the… Read More

“In the latest version of QQ, we have upgraded it to a platform for food, drinking and entertainment, and the number of cities we cover is also expanding,” said Dowson Tong, president of the company’s social network group that oversees QQ, in a recent interview.

Revenue Boost

Tencent has integrated games more tightly into its messaging services to capitalize on the China online gaming market, which IResearch projects will expand to 225 billion yuan by 2017.

QQ and WeChat helped triple Tencent’s mobile-game revenue to 1.8 billion yuan in the first quarter from the previous three months.

That trend likely continued in the second quarter. Tencent’s profit rose to 5.59 billion yuan in the three months ended June, according to the average of 11 analysts’ estimates compiled by Bloomberg.

That would make the second successive quarter with profit growth of more than 50 percent. Earnings climbed 61 percent in the three months ended March 2011.

QQ was the first iconic product billionaire Ma Huateng created at Tencent in 1999, two years after AOL Inc. (AOL)’s messaging service took off.

As more Chinese accessed the Internet, instant messaging became the most popular online app. Ma restructured QQ’s divisions in 2012 to take it mobile and the effort paid off.

Photographer: Brent Lewin/Bloomberg
QQ was the first iconic product billionaire Ma Huateng created at Tencent in 1999, two… Read More

Last year, 83 percent of China’s Internet users subscribed to Mobile QQ and 80 percent to WeChat, compared with Laiwang’s 23 percent, according to a survey among almost 4,000 people by Shanghai-based IResearch in June.

Stake Purchases

Tencent is now leveraging its vast user base to go after a bigger share of the China e-commerce market, which IResearch estimates will more than double from last year to 21.6 trillion yuan ($3.5 trillion) in 2017.

The company in March took a 15 percent stake in JD.com Inc., a direct competitor to Alibaba, and folded its own e-commerce assets into the venture. This year, Tencent has also agreed to buy 19.9 percent of Craigslist-like 58.com Inc. and take a 20 percent stake in Dianping.com, a website similar to Yelp Inc. that users review restaurants in China.

Single Click

Tencent has been working closely with JD.com and Dianping, directing traffic from Mobile QQ and WeChat to the websites, said Tong.

Those steps are beginning to yield results. A new single-click link to JD.com from Weixin produced an eightfold increase in daily transaction volumes compared with an earlier access that took two clicks, JD.com said in June. This month a similar integration with JD.com was provided to users of Mobile QQ.

Still, Tencent and its partners are far behind in e-commerce. Alibaba, which operates platforms including Taobao Marketplace and Tmall.com that connect retail brands with consumers, accounted for 76.4 percent of total mobile retail transactions in China, according to its IPO filing to the U.S. Securities and Exchange Commission.

The fact that Tencent wrapped its e-commerce assets into JD.com shows it wants to limit its investment in the segment, said Yao Yue, a Shenzhen-based analyst with Morningstar Inc.

“Even if Tencent’s instant messaging apps can direct a lot of traffic to JD.com, at the end of the day it still depends on who has the better shopping service, and Alibaba’s Taobao is dominant,” said Yao.

Alibaba hasn’t been able to achieve the same success in mobile messaging so far. The company in 2004 started Aliwangwang, a PC-based instant messenger for buyers and sellers, that is now used for negotiating prices, customer services and delivery notifications on its Taobao marketplace. It also has a mobile version called Wangxin.

Lagging Behind

Laiwang was started by Alibaba to broaden its reach, after billionaire founder Jack Ma alluded to Tencent being ahead in the messaging race at a Credit Suisse conference in March 2013.

“We also invested heavily, but we are not that lucky and not creative, so creative like Tencent, which has WeChat, such a powerful thing,” Ma said at the conference.

Ma has vigorously tried to promote Laiwang and said the company wouldn’t pay bonuses to staff who didn’t get 100 clients for the app before Nov. 30 last year, according to a post on the company’s microblog.

In an attempt to generate revenue from Laiwang, Alibaba said in January it would offer games on the app. A month later Alibaba’s Ma said the company’s achievement on mobile applications wasn’t satisfactory.

Alibaba spokeswoman Florence Shih declined to comment on the company’s mobile strategies, citing pre-IPO restrictions.

Jin Yuan, a Shenzhen mobile phone user, underscores the lead that Tencent has in messaging. Jin has been a QQ subscriber for the past 13 years and says Tencent does a better job of making messaging apps that are easy to use.

“I use QQ to keep in touch with friends I’ve known since the PC age and I use it for a lot of group chats,” Jin said. “I like to use WeChat a lot for sharing information about good places for food.”

By Lulu Yilun Chen Bloomberg

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