Exclusive Interview with the CEO of Tencent - Ma Huateng

By Yang Yang
Published: 2010-11-10

Corporation, page 25, issue 493, November 6, 2010
Translated by Tang Xiangyang
Original article:

Yang Yang (杨阳), a reporter with The Economic Observer's corporation section, has interviewed the heads of both Tencent and Qihoo over recent days, asking both men about the exciting battle that is taking place for control of China's instant messaging market. Below, we present a translation of an interview with Ma Huateng (马化腾) that Yang Yang conducted last Thursday afternoon. The Chinese text of the interview was posted to our Chinese site on Friday evening and also appeared in this week's edition of the newspaper.

Tomorrow we will publish a translation of Yang Yang's interview with Zhou Hongyi (周鸿祎), chairman of Qihoo. 

Ma Huateng, the CEO of Tencent, had not recieved media interviews for over a year before agreeing to be interviewed by a reporter from the Economic Observer late last week.

In the interview, which was conducted on the afternoon of November 5, Ma Huateng explained his decision to force users to choose between Tencent's QQ instant messaging platform and Qihoo's 360 antivirus software.

On the Decision to block users using Qihoo 360 software:

EO: Tencent's decision to stop providing services to QQ users running Qihoo's 360 antivirus software, is a decision that forces users to choose between the two software programs and has caused widespread dissatisfaction. Did Tencent consider that its decision might deprive web users of their right to choose which software they use?

Ma Hueteng: It was a critical situation. If I had delayed the decision for another three days, QQ users may have been destroyed by 360.

Tencent has complained to the government and the police ever since Qihoo 360 began spamming its users. We had hoped that this could be resolved through legal channels. But we also knew that the legal process would take a long time. From October 29 to November 1, more than 20 million QQ users had been attacked by Koukou Bodyguard (扣扣保镖) [a program developed by Qihoo 360 that is able to block QQ advertisements from popping up and that can also disable other QQ services] and this number was increasing by 10 million plus users every day. If we calculated the rate of infection according to the speed at which the Privacy Protector (隐私保护器) [another program developed by Qihoo 360 that was launced on Sept 27th and which claimed to protect the security of QQ user's private files and data] spread, 80 million QQ users would have been infected within three days.

We had to address the problem on two fronts. We had been hijacked by a secretive and resistant virus that we had never encountered before. This kind of had only ever occured in the area of online games. It had the potential to be very damaging. If Tencent had done nothing, and every one of QQ users had been hurt by this attack, than it would have been too late.

We had to contain the spread of the virus within two days, at the very least we had to ensure that most of our users would not be harmed.

EO: Tencent has long boasted of its technological prowess. Couldn't the problem be solved through technical means?

Ma Huateng: There was no way of doing that. Qihoo's 360 Antivirus software is a basic underlying software while QQ is simply an application. It is like asking a civilian cargo boat to fire on a military vessel, though the military vessel may be small, it's still well armed. We had no choice aside from blocking it. Tencent could manage it technologically, but that would be illegal. Just because they are using illegal methods does not mean that we should follow suit. If we had done that, then they would have complained that we had broken the law by deleting a user's commercial software without the user's consent.

Out last option was to ask users to delete QQ to avoid being attacked, and then reinstall the program.

The situation was especially urgent on November 2. We saw the Qihoo 360 software update had been installed on more than 20 million computers, the update also asked users to import their lists of friends, which would have prompted a second wave of viral infections. Supposing that every user has about 40 friends, there would be more and more users being attacked. It was urgent and we had no choice but to pull the plug. It was impossible for users to know the whole story and it would have be too late whey they did find out.

Everyone knows we can't deny the users' the right to choose. But it is hard for the outside world to understand the predicament that Tencent was in.

EO: How many PCs have installed both Tencent's QQ and Qihoo's 360 Antivirus software?

Ma Huateng: Around 60 percent of QQ users have installed 360, so at least 100 million.

EO: When you made the decision, did you consider how many users would give up QQ?

Ma Huateng: I had no choice. If our users choose to avoid the viral attack by uninstalling QQ and reinstalling it at a later date, I accept that.

On Rivalry:

EO: Have you ever contacted Zhou Hongyi (the chairman of Qihoo)?

Ma Huateng: We met each other a long time ago. This year we didn't meet, but have sent each other short messages. We also exchanged messages in September when Zhou Hongyi felt threatened by the fact that we were developing Diannao Guanjia (电脑管家) [a antivirus software developed by Tencent].

Zhou Hongyi originally invited us to invest in Qihoo 360 - he would sell us a small proportion of shares at a high piece, just like Microsoft invested in Facebook. Then he invited us to attack Baidu together: he would sell the search flow to us and develop software to block the many medical advertisements that appear on Baidu and which account for 30 percent of its income.

To put it plainly, because I declined his offer, he decided to shift his target and attacked us instead, because we were developing our own antivirus software, and he would have been contained by Tencent when attacking Baidu.

Finally he decided to attack us and developed Privacy Protector

EO: It seems Qihoo is attacking Tencent in order to avoid being swallowed up. Is that the way it is?

Ma Huateng: The only way for each of us to survive is to compete fairly with each other. Qihoo did not develop the Koukou Bodyguard over night, even we don't fully understand many of its targets.

We have noticed that Qihoo's 360 antivirus software first prohibited QQ users from upgrading, making it impossible for us to save it. Then it guided users to copy their list of friends which in fact, it was actually stealing users' information. It even replaced the TT browser with a 360 browser because that was an additional source of income.

We thought that when its virus had attacked a large number of users' computers, it would ask users to copy their personal information, including their names, passwords, lists of friends. Then it would develop its own IM software and guide users to import the information. 

This is a plainly an attempt to steal from us, and just like the actions of a Trojan malware, though it claims to be an antivirus software and is protected by the system drive.
We have had all our evidence notarized.

EO: Do you have evidence to prove the final target of 360 is to promote its own IM software?

Ma Huateng: We have some screen shots along with inside information. We have known all along that 360 has been developing IM software and it has been contacting software companies some of which were our past competitors. It has even negotiated with Wang Zhidong to buy the “lavalava” [another instant massager developed by Wang Zhidong].

EO: Did Tencent ever scan users computers and upload their information? Are the private conversations and information of users safe?

Ma Huateng: QQ has been using a "safe module" to scan users' computers since 2006 when QQ IDs were frequently stolen and Trojan viruses were everywhere. Tencent had to protect users. The original design scanned before loading; now it loads and then scans.

Now, Tencent can discover up to 1.7 million Trojan viruses every day. That is why I am determined to develop antivirus software. To be frank, I do not want to do it at all. If the antivirus manufacturers were able to do the job, we wouldn't continue to do it. But if I hadn't done it, all the QQ IDs would have been lost.

As a listed company, for the past ten years or more, they've always been people out there looking to cause trouble for us. If Tencent was doing something dangerous, other companies would have figured out what we were up to. That's why Tencent would never do anything of the kind.

EO: Did Tencent ever upload users' files? Were those files, as claimed by 360, encrypted files?

Ma Huateng: How is that possible? If there were encrypted files then they certainly would have been decoded.

Yes, we scan their computers, but we only do what all these kinds antivirus software is supposed to do. The information QQ uploads are texts that contain Trojan viruses, and some data so we know there isn't an even larger virus somewhere, so Tencent will know how to respond. None of it contains the users' private information. If their computers are safe, QQ does not upload any information.

EO: Does Tencent scan users' computers to find out which software can be easily developed?

Ma Huateng: Would we need to? There are too many market surveys and consulting companies. What Tencent needs is only a market survey. We only need to know the general data - which software has occupied how much market quota. We would not need exact numbers; they are no use for developing software.


EO: Are you afraid that people will see Tencent as a monopoly?

Ma Huateng: Yes. But Tencent is not a monopoly. It is the largest company in many areas, such as web search and online commerce. It has the largest market shares in IM, but that doesn't make it a monopoly. A monopoly would not give users choices, but now users have choices. 

A company will prove to be a monopoly by using methods that hurts its users. Does 360 care more about our users than we do? This whole thing is caused by 360.

EO: But Tencent is powerful, and looks like a monopoly.

Ma Huateng: Ah, Your rivals will always want to compete; they do not want you to be powerful. So they exaggerate every move you make.

Our competitors are always saying "Tencent can't do everything." But if other companies are producing the products, why can't Tencent? That's not fair, either.

EO: The problem is that people believe Tencent's enormous user base makes your company too powerful. 

Ma Huateng: Well what are we supposed to do about that? Our users like our product. There's nothing we can do about that.

EO: The whole industry is worried that since Tencent is so big, it can force users to drop other products. What will happen when the next software or application company has a similar conflict with Tencent? Would you force users to make a decision again?

Ma Huateng: How can that be? This is an emergency. The truth is that we faced a do-or-die moment for our company. People refuse to believe us, even though we have explained it very clearly. Or they don't understand, either way, it's very upsetting.

Links and Sources
Economic Observer:
Exclusive Interview with the Chairman of Qihoo - Zhou Hongyi
Economic Observer: Tencent vs. 360 Commentary Wrap
Economic Observer: China Poll: 360 or QQ?
China Smack: Tencent Stops QQ Service For Any Computer With 360 Installed