Three emerging global Web giants to watch

Going where many Western investors feared to tread, three global Web powerhouses -- DST, Naspers, and Tencent -- are moving beyond their home markets and on their way to dominate many parts of global cyberspace.
Written by Joe McKendrick, Contributing Writer

When it comes to Internet rock stars, everyone has been fixated on megasites such as Google, Amazon, and Facebook. But it's a global economy, and a global Internet, and a number of new players are emerging that may be as common household names as Google is today.

A recent report in The Economist identifies three emerging global powerhouses -- DST, Naspers, and Tencent -- that are moving beyond their home markets and on their way to dominate many parts of the global cyberspace. The report observes that the three giants actually have ownership stakes in one another. For example, Naspers just purchased a stake in DST. The report attributes much of their success to a common strategy: "finding promising internet companies in countries where Western investors rarely dare to go."

Three emerging giants include the following companies:

Digital Sky Technologies (DST), based in Russia, has Websites that account for more than 70 percent of page-views on the Russian-language Internet. It's roots are mail.ru, a Russian Web portal. "Today the firm controls many of the country’s leading websites and boasts an interesting mix of owners, including Goldman Sachs and Alisher Usmanov, a Russian billionaire, who holds 27 percent." DST also has a significant stake in Facebook as well.

According to a description on its Website, DST "is focused on proven Internet business models that are actively shaping the industry, including social networking and communications, e-payment solutions, online marketplaces, MMO and social games and vertical specific websites."

Naspers, based in South Africa, is Africa’s biggest media group, and has been around almost 100 years. Naspers is publisher of the Daily Sun, South Africa’s biggest newspaper, and "one of the most ambitious old-media companies anywhere in its move online. It still makes most of its sales—28 billion rand ($3.6 billion) in the year to March—from print and pay-television, but it uses the cash to buy online firms."

According to the Naspers Website, the group’s principal operations are in "Internet platforms (focusing on commerce, communities, content, communication and games), pay-television and the provision of related technologies and print media (including publishing, distribution and printing of magazines, newspapers and books).  The group’s most significant operations are located in South Africa and elsewhere in sub-Saharan Africa, China, Russia, Eastern Europe, the Netherlands, India, Brazil and Thailand."

Tencent is China’s largest Internet company by market capitalization — "and the third-largest in the world," The Economist observes. Tencent, with revenues of $1.8 billion in 2009, is best known for QQ, a popular instant-messaging service with 567 million users, with profits coming from online games and a virtual currency, called Q coins.

Tencent states on its Website that it sees it's mission as "to use Internet-related technologies for the betterment of human life. QQ, Tencent's instant messaging platform, has already profoundly influenced the way tens of millions of Internet users communicate with one another. QQ's ease of use and expansive user base allow for a wide range of personal, social services, and commercial applications. QQ is improving people's lives and expanding people's ways of using the Internet at an unprecedented rate.... Presently, Tencent is aiming its operations at the strategic goal of providing users with a 'one-stop online life service.'"

The Economist also observes that these growing firms are attracting increasing interest from Western investors and venture capitalists.

As with Internet and IT market leaders in North America and Europe, these companies are committed to changing the world through digital interaction. And as the world's Internet adoption grows, these three are likely to be the companies that help make this happen. According to the latest from Internetworldstats.com, 27 percent of the world's 6.8 billion people -- 1.8 billion -- use the Internet. The biggest block of consumers is now Asia, with 42 percent of the world's total. By contrast, only 14 percent are in North America.

This post was originally published on Smartplanet.com

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