Tencent (0700.HK), China’s leading provider of Internet and mobile / telecommunications value-added services, is now the official and exclusive Internet sponsor of the 2010 World Expo.

Why is this significant?

- The World Expo has a 150 year history.
- The next World Expo will be held in Shanghai May 1-Oct 31, 2010 and is expecting over 70 million visitors.
- Tencent is the exclusive provider of all online and offline technology aspects of the World Expo and its over 200 partners. This includes all online content, interactive / e-commerce platforms, virtual communities and all other value-added services.

In return, Tencent will not only receive the right to use the World Expo logo and trademark, but will also become the sole internet partner for all World Expo sponsors whose websites will make use of the World Expo’s registered trademark. According to Tencent, the company’s sponsorship of the World Expo is the largest amount the company has ever invested.

Tencent recently reported $523 million in revenues (36% Y-O-Y increase) and $224 million in operating profits (43% operating margin) for 2007.

Tencent knows how to make money and they do so successfully across all of their businesses…

Value added Internet services (digital goods, games, micro-transactions): $344 million (66%)
Mobile services: $110 million (21%)
Online advertising: $67 million (13%)

…and I would expect them to do so through this unique and long-term relationship.

I am surprised that Alibaba.com, one of Tencent’s competitors, did not fight for this honor given their incredibly strong government ties, equally impressive internet businesses (B2B, C2C, Online Payment, Search) and dire need of diversified revenue opportunities. I would watch Tencent closely as their strength seems to be growing and across many industries, which could include B2B before you can say, “Open Sesame!”