SAN FRANCISCO/HONG KONG: Chinese Internet giant Tencent Holdings said on Thursday it could help Snapchat owner Snap publish video games and improve ad sales after acquiring a 12 percent stake in the US social media network.
Snap’s disclosure in a US regulatory filing that Tencent had recently bought 145.8 million of its shares on the open market set off a wave of speculation among investors about the relationship between the firms.
Shares in Snap closed at $12.91 on Wednesday, down 14.6 percent, as investors pummeled the company for slow user growth and treated Tencent’s move as an investment rather than the precursor to an acquisition.
Tencent’s shares do not have voting power and it will not have a board seat, but the two companies broadly believe in cooperation that goes beyond passive investing, according to Snap’s filing on Wednesday. Tencent on Thursday described a potentially close relationship.
“The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed as well as to share its financial returns from the growth of its businesses and monetization in the future,” it said in an emailed statement. It also referred to the potential for “newsfeed ads.”
Games and a newsfeed have not been a part of Snapchat, although the company on Tuesday said it was planning a redesign.
Analysts say Tencent, the world’s largest gaming company by revenue, has benefited from its social media apps for the phenomenal popularity of its smartphone games such as Honour of Kings, and will need the help of local social networks in promoting its games in overseas markets.
The Snapchat app, though, is banned in China, where non-Chinese social media networks are generally restricted, although some videos originating in China were visible on the network on Wednesday presumably because of technological workarounds.
US investment analysts said they did not expect a change in that regard.
It is unlikely that Snap “would ever be allowed to establish a foothold in China even if their relationship with Tencent were deeper,” Brian Wieser, senior analyst at Pivotal Research Group in New York, said in a report to clients.
The companies operate on different scales. Tencent’s holdings include messaging apps QQ and WeChat, both ubiquitous in China, and its market capitalization of $469 billion (SR1.75 billion) is among the largest in the world. Snap’s is $15 billion.
While Snapchat focuses on sharing pictures and video between friends, WeChat offers payment processing and more. Tencent said that it expected Snapchat to continue to grow, particularly in “affluent Western markets” such as the US and Europe.
“The China market is in some ways more advanced in social media and messaging than the US is,” said Rebecca Fannin, founder of Silicon Dragon, a website that writes about China and California’s Silicon Valley.
“Tencent might have teams come in and work with them,” Fannin said.
Snap declined to comment beyond a filing in which it said the California company was inspired by Tencent’s creativity and entrepreneurial spirit and grateful to continue a productive relationship.
Snap has an office in Shenzhen, China, where Tencent has its headquarters, to assist in the manufacture of Spectacles, Snap’s sunglasses that have a built-in camera.
Tencent has aspirations to assume a global role in technology and may be buying shares with that strategy in mind, said Lindsay Conner, a Los Angeles lawyer who has represented Chinese companies in the US.
“They often invest in companies to have a seat at the table, to understand businesses better, to see where the leading edge is between technology and content, and to have an insight into technology they should adopt or license,” he said.
Tencent first became an investor in Snap in 2013. The total size of its investment has not been disclosed. Although Snap’s shares began to trade publicly in March in the hottest debut of a US tech stock in years, results since then have sent Snap shares down below its IPO price of $17.
Tencent says could help Snapchat add games, boost ad sales
Tencent says could help Snapchat add games, boost ad sales
Education spending surges 251% as students return from autumn break: SAMA
RIYADH: Education spending in Saudi Arabia surged 251.3 percent in the week ending Dec. 6, reflecting the sharp uptick in purchases as students returned from the autumn break.
According to the latest data from the Saudi Central Bank, expenditure in the sector reached SR218.73 million ($58.2 million), with the number of transactions increasing by 61 percent to 233,000.
Despite this surge, overall point-of-sale spending fell 4.3 percent to SR14.45 billion, while the number of transactions dipped 1.7 percent to 236.18 million week on week.
The week saw mixed changes between the sectors. Spending on freight transport, postal and courier services saw the second-biggest uptick at 33.3 percent to SR60.93 million, followed by medical services, which saw an 8.1 percent increase to SR505.35 million.
Expenditure on apparel and clothing saw a decrease of 16.3 percent, followed by a 2 percent reduction in spending on telecommunication.
Jewelry outlays witnessed an 8.1 percent decline to reach SR325.90 million. Data revealed decreases across many other sectors, led by hotels, which saw the largest dip at 24.5 percent to reach SR335.98 million.
Spending on car rentals in the Kingdom fell by 12.6 percent, while airlines saw a 3.7 percent increase to SR46.28 million.
Expenditure on food and beverages saw a 1.7 percent increase to SR2.35 billion, claiming the largest share of the POS. Restaurants and cafes retained the second position despite a 12.6 percent dip to SR1.66 billion.
Saudi Arabia’s key urban centers mirrored the national decline. Riyadh, which accounted for the largest share of total POS spending, saw a 3.9 percent dip to SR4.89 billion, down from SR5.08 billion the previous week.
The number of transactions in the capital settled at 74.16 million, down 1.4 percent week on week.
In Jeddah, transaction values decreased by 5.9 percent to SR1.91 billion, while Dammam reported a 0.8 percent surge to SR713.71 million.
POS data, tracked weekly by SAMA, provides an indicator of consumer spending trends and the ongoing growth of digital payments in Saudi Arabia.
The data also highlights the expanding reach of POS infrastructure, extending beyond major retail hubs to smaller cities and service sectors, supporting broader digital inclusion initiatives.
The growth of digital payment technologies aligns with the Kingdom’s Vision 2030 objectives, promoting electronic transactions and contributing to the nation’s broader digital economy.
