America's Road to Fame

Chapter 199 Potato, or Youku?
Knowing that William Chen was coming, Li Ying brought the company's car to pick them up.

After sending Yang Mi home first, Li Ying reported to him the progress during this period, mainly contacting Youku and Tudou for financing.

Chen Weilian checked the current situation of video websites in Huaguo before, and found that up to now, relatively well-known private video platforms include Ku6, Youku, Tudou, LeTV and other websites, but at the end of November last year, Ku11.com was taken down Chen Tianqiao's acquisition of Shanda Network, and he knows that LeTV is destined to be a big pit, so the only options left are Youku and Tudou.

William Chen knows that in this industry, Netflix, which he invested in, is doomed to have difficulty entering the Huaguo market, just like Twitter, which lost the Huaguo market and needs to invest in Weibo on this track, the best way to do it now is through Invest in Huaguo's video website to enter the field of video platform.

Moreover, he recalled that Tudou.com failed to have an IPO because of the founder's divorce case, and eventually merged with Youku to become Youku Tudou.So the best strategy right now is to invest in both sites at the same time.

Another website, iQiyi, is also developing well in the future, but this website has not yet been established.

So Chen Weilian instructed Li Ying to contact these two companies and talk about investment.

Li Ying said that the two companies have responded very positively to the financing requirements of Huaxia Future Capital, which is backed by William Chen Meta Investment Company. This is also normal, because William Chen currently has a lot of resources in film and television. , He owns Future Pictures, Marvel, MGM, and is the largest shareholder of Netflix; in Huaguo, he is also the largest shareholder of Huayi Company.

If he can invest in Tudou or Youku, then for these two video sites, there is a great opportunity to obtain content authorization from these film and television companies, thereby enhancing their own competitiveness.

And these two companies both intend to go to the US for IPO this year. William Chen, who has an American background, can also give a lot of help in this regard. Therefore, it is normal for them to respond positively to the olive branch thrown by William Chen. .

Therefore, after arriving at the Yanjing office of Meta Investment Company, William Chen asked:

"What's the current situation in terms of valuations for the two companies?"

"As for Tudou, their most recent round of financing was in 2008. The scale of financing at that time was 5680 million US dollars, and the pre-money valuation at that time was around 4 million US dollars. $5-5.5 million."

It seems that Li Ying has indeed done a lot of homework. When Chen Weilian asked, she quickly stated the data:
"As for Youku, their last financing was also in 2008, but because the development was not as good as Tudou at that time, the financing amount was only 3000 million U.S. dollars, and the valuation at that time was about 3 million U.S. dollars. If they raise money now, the company's valuation will be at most 4 One hundred million U.S. dollars."

At the same time, Chen Weilian also learned that since 2008, the competition of video websites has become fierce, and various websites have started to burn money to promote marketing models. China Network Television (CNTV) has begun to invest resources into the online video industry, so the competition in this field is very fierce, and correspondingly more and more money is burned.

Therefore, at this time, all video sites have a huge demand for funds. To do online video, not only have a huge demand for bandwidth, servers, and even technology, but also need to start buying content in an environment where the country attaches great importance to copyright. Copyright, so the cost of funds is very huge. Now whoever can get more funds will get a larger market share.

Therefore, while accelerating the frequency of financing, online video platforms including Tudou and Youku have begun to set their sights on IPO listings.Although the subprime mortgage crisis has intensified this year, it seems that it is not a good time to go public.However, it has been burning money and losing money all the time, and it is difficult to sustain it only by financing, and those early investors are also looking forward to earning profits after listing.

After thinking for a while, Chen Weilian said to Li Ying: "Mainly focus on contacting Youku."

"what?"

Hearing Chen Weilian's words, Li Ying showed a puzzled look, and said in a puzzled way:
"But Tudou.com is developing better now, with a higher market share, and has always been ahead of Youku."

It's no wonder that Li Ying didn't understand why Chen Weilian made such a decision. Although in the current video website market, Tudou.com and Youku.com are slightly ahead of other websites, such as Ku6.com, after being acquired by Shanda Network , the development is not smooth, and the market share has been declining.

However, among the two websites Tudou and Youku, Tudou.com still occupies the leading position. Not only does it have a slightly higher market share, but also Tudou.com has always had the highest valuation. A lot can be seen.

Even everyone in the industry is generally optimistic that Tudou.com will lead Youku and become the first video website with a successful IPO. If this achievement is achieved, it can even be called the world’s first video website to be successfully listed in the United States. It was earlier and more famous, but in 2006, Google acquired Youtube at a sky-high price of US$16.5 billion, and it has not yet listed its IPO.

Therefore, if it can be the first to be listed successfully, not only can it get a large amount of valuable development funds, but also as the world's first online video website that is successfully listed, it will definitely attract the attention of the world, thus greatly increasing its popularity. far ahead.

However, William Chen knew that although Tudou submitted its listing application to the US SEC earlier than Youku by more than a month, because of the dispute over the division of marital property in the divorce of the website founder Wang Wei, his The ex-wife filed a lawsuit during the listing period of Tudou.com, demanding to obtain 38% of the shares of Moduquan Tudou, the core operating platform of Tudou.com, and filed an application for preservation of this part of the shares. Therefore, the court froze this part of the shares, resulting in Tudou. Net failed to go public this time.

Thus, a "potato clause" was born, which means that investors require the marital status of the founders or main managers of the companies they invest in to be changed only after the approval of the board of directors, especially the majority of investors.This is also the request made by investors after Tudou.com's failed IPO in order for similar situations to reappear.

In the end, Youku’s successful IPO became the world’s first online video company listed in the United States. Not only did it get funds to increase the progress of promotion and technological change, but it also gained great popularity, leaving Tudou behind. .

After Wang Wei, the founder of Tudou.com, finally reached a compensation agreement with his ex-wife and resolved the divorce turmoil, the IPO succeeded again half a year later. However, the entire market situation had changed at that time. The IPO of Tudou.com was not successful, and even broke on the same day, which was in stark contrast to the stock price of Youku.com, which rose by more than 110% on the day of listing.

In addition, in the past six months, Youku has seized the opportunity to catch up. Therefore, the market value of Tudou.com is less than a quarter of that of Youku. In 2012, it was acquired and merged by Youku. 160% of the stock purchase of Tudou, the results of the two parties in the new company's shareholding ratio is 3:1, we can see how miserable Tudou was.

Therefore, since this is the case, and the current valuation of Tudou is higher than that of Youku, why doesn't William Chen directly invest in Youku?
Some people will say that it is possible to invest in Tudou now and resolve the divorce of the founder Wang Wei in advance.But if this is the case, Tudou.com is the first to be listed successfully, then the future development may not be worse than Youku, and then there is a high probability that the subsequent mergers and acquisitions will not be achieved. Then William Chen invests in two competing companies at the same time. What is the significance of doing so? Where is it?

Besides, he knows that although online video sites seem to be lively now, in the end, these sites still have to rely on giants to survive, because this industry burns too much money, and it is impossible for them not to be a giant.

Just like later, when LeTV collapsed, the BAT giants were one person and one family—Baidu’s iQiyi, Ali’s Youku Tudou, Penguin’s Penguin Video...

In this case, it is impossible for him to support two websites at the same time, so it is better to support Youku to compete with other giants after Youku acquires Tudou under normal circumstances.

Now that this decision was made, William Chen said directly to Li Ying:

"Personally, I am more optimistic about the development of Youku.com, so you go and talk to them. I can accept the valuation of 4 million US dollars. I hope to invest at least 1 million US dollars, accounting for 20% of the shares."

Well, since the boss has already made a decision, then Li Ying has to execute it, so she followed William Chen's order and contacted Youku CEO Gu Yongqiang.

(End of this chapter)