On January 19, Google agreed a patent licencing deal with Tencent, marking the search giant’s first such deal with a Chinese tech firm. The cross-licensing deal is intended to minimise the possibility of ligation over patent infringement, allowing both companies to access each other’s patent portfolios.
While the financial details have not been revealed, Google has confirmed the deal covers a broad range of products and represents a long-term agreement. There is also scope for future collaboration, with an understanding the companies will develop future technologies together.
Although Google has signed similar agreements with Samsung and Cisco in the past, the partnership with Tencent represents a turning point in its commercial dealings in China. Google effectively withdrew its search services from China in 2011, citing a suspected cyberattack and resistance to self-censorship regulations as its motivation. Many of its products, such as its search engine, app store and Gmail service, are currently blocked in mainland China.
Partnering with Tencent represents a turning point in Google’s commercial dealings in China
However, social media and gaming firm Tencent could present a route back into the market, with its social messaging service, WeChat, the largest in China and boasting one billion users worldwide.
Over the past year Google has increased its presence in China, launching an AI lab in Beijing and introducing a new version of its translation app. In December, Google invested $120m in Chinese live-stream gaming app Chushou, which offers similar live streaming services to those of Google-owned YouTube. The investment in rival Chinese counterparts is a big step towards Google circumventing the regulations that make the Chinese tech market so difficult to penetrate.
The deal also follows a year of massive growth for Tencent, which posted a profit of $2.7bn in November and became the first Chinese tech company valued at over $500bn shortly after. In a bid to continue this development, the firm has recently made a string of high-profile investments, including the acquisition of a 10 percent stake in Snapchat last year.
The patent agreement with Google is another marker of Tencent’s rapid expansion and increasing global influence.