Understanding Naspers and their Tencent investment

“The investment strategy at the time was to find a replacement revenue source for its traditional print media business – which it forecast would decline in the advent of digital media”

That’s a quote from an article describing Naspers, a South African media company, in the 1980s. Koos Bekker – now the Chairman – had suggested that there was potential for a new type of pay TV in South Africa, similar to HBO.

The narrative is immediately familiar. A media company tries to branch out to digital media in order to make up for the shortfall in print. But this is not that kind of story. Instead of cautiously investing a little on the side, Naspers transformed themselves from a legacy media company to one of the most interesting and prominent internet investors in the world.

What makes the story about Naspers even more interesting is that their transformation wasn’t solely driven by clarity of vision. It was – and is – driven by necessity after having hit the investment equivalent of winning the Powerball – their investment in Tencent in 2001. But having an unbelievably successful investment as a listed company is a double edged sword. Naspers’ journey has been both complicated and has led to some extraordinary secondary effects.

I explain this and much more in my latest essay called: The double edged sword of success: Understanding Naspers and their Tencent investment.

Please take a look and share your thoughts!