Revisiting Future Path

143 Kick Baidu

Tencent was unable to break through the layers of containment in Spring and Autumn. Under the declining trend, internal rifts gradually formed, and Ma Huateng was finally forced to end the strategy of confronting Spring and Autumn by reducing equity.

This 6% equity is Tencent’s compensation for land cessation.

In terms of sincerity, the sincerity of the Tencent founder team is still sufficient.

However, Wei Dongsheng is not eager to profit through Tencent's equity appreciation. If Chunteng Games' status cannot be guaranteed, there is no essential difference between 15% and 21%.

Zeng Li Qingfu also assured Wei Dongsheng: "Tencent has already established a joint venture with Chunqiu Chunteng Games, and it is a huge mistake to operate "QQ Hall" and "QQ Fantasy Country" on its own. In order to prevent Tencent's management from going alone and wantonly harming the interests of shareholders, MIH proposed To implement the one-vote veto system, the Tencent team must obtain the understanding of Chunqiu and MIH for all decisions involving strategic direction and large amounts of funds. Any decision that Chunqiu feels is harmful to its own interests and voted down, Tencent must give up unconditionally."

Wei Dongsheng nodded.

If it is such a condition, it is worth talking about.

Wei Dongsheng responded in good faith to Zeng Liqing, Zhang Zhidong and others: “Chunqiu agrees in principle to the one-vote veto system and is also willing to start negotiations on equity adjustments.”

Tencent's decline is a company with a market value of billions of Hong Kong dollars. The 6% equity is also a change involving hundreds of millions of capital. Trivial negotiations must be carried out to restrict each other's rights and obligations. Wei Dongsheng's statement was not the end of the confrontation between Spring and Autumn and Tencent, but the start of the process of negotiation and settlement of the matter.

Wei Dongsheng seemed to be satisfied with the 6% equity when he expressed his position. In actual operation, the appetite of the Chunqiu interest group is not limited to 6% equity.

With more people, your thoughts will become mixed.

Just like the system of the state, officials are officials, and the country is a country. The elders of the nine cabinets, who are stronger than top political clubs, cannot arbitrarily **** national interests with their own will. Huaguo is a large collective of 1.3 billion people, and Chunqiu Group is a small collective of 50,000 employees. Over time, with the cohesion of Chunqiu Group, Chunqiu Group gradually breeds collective will and has the interests of Chunqiu Group.

Chunqiu Group is currently in the shadow of Wei Dongsheng. Wei Dongsheng said to the east, Chunqiu Group must go east. However, where Wei Dongsheng was noncommittal and where Wei Dongsheng did not want to spend his energy, Chunqiu Group had already made its own decision on interests.

Like Tencent, Wei Dongsheng regards it as a corner and does not pay much attention to it. Whether it’s 15% equity or 21% equity, this move is enough to keep Chunteng Game as an auxiliary. However, Wei Dongsheng does not care about 15% equity or 21% equity, the collective will of Chunqiu Group does. Wei Dongsheng ignores Tencent again. Tencent is also a potential Internet company. If there is a chance to tear a piece of fat on it, how can Chunqiu Group give up willingly.

As a result, Wei Dongsheng started the negotiation calmly, but what MIH and Tencent waited for was the swords and swords that the Spring and Autumn Negotiation team had prepared for a long time. For the founder team such as Ma Huateng, Zeng Liqing, and Zhang Zhidong, Tencent is their business and their painstaking effort; for MIH, Tencent is a financial investment, and they want to make money from Tencent’s equity appreciation; Yu Wei Dongsheng comes It is said that holding shares in Tencent is to keep Chunteng Games, and is the aileron of Chunqiu Network; for Chunqiu Group, Tencent is a chopping block that does not cut the fat.

Tencent’s founder team attaches great importance to Tencent’s future. For Tencent’s survival, many aspects are willing to compromise; MIH cares more about whether Tencent is worth bullish. If Tencent has no hope, no amount of equity will be a bunch of figures. The Chunqiu negotiating team had the upper hand and refused to compromise. After a series of fierce confrontations and four-dimensional space, Chunqiu gave up the development of instant messaging tools, Tencent gave up the development of online game business and other complex exchanges of interests, the final equity ratio obtained by Chunqiu Group far exceeded Wei Dongsheng’s Imagine.

According to preliminary negotiations, after the adjustment of Tencent’s equity: the proportion of shares outstanding on the exchange was reduced to 20%, Chunqiu held 35%, MIH held 25%, and Tencent’s founder team and management held 20%. Chunqiu became Tencent’s largest shareholder.

20% of the increase in the shareholding ratio of Spring and Autumn, 6% came from Ma Huateng, and the rest came from the transfer of MIH and the repurchase of circulating shares. Since everyone is betting on the future rather than the present, MIH and Tencent's management asked Spring and Autumn to acquire their shares at a premium. Considering that Tencent’s stock price has recently hovered between HK$3 and HK$4, Spring and Autumn announced a two-fold premium, which means that it will increase its holdings of this 20% stake on the condition of HK$8 per share for a total of HK$2.688 billion.

Chunqiu also put forward its own conditions, except that hundreds of millions of Hong Kong dollars for repurchasing tradable shares will be put on the market immediately, and the remaining about two billion Hong Kong dollars will be postponed: if a formal contract is signed before October 2005, Chunqiu will be October 2005 One-sixth was paid before, one-third before October 2006, one-third before October 2007, and the last one-sixth before October 2008.

Although there are still many trivial details that need to be negotiated in a see-saw style, the general direction of Spring and Autumn and Tencent's suspicion has been set.

The conflict of interest is gone, and the atmosphere is harmonious.

Tencent’s 35% stake, Chunqiu Network increased its shareholding to 5%; Chunqiu Group directly held 5%; Chunqiu Software increased its shareholding to 10%; Ma Huateng’s 6% shareholding reduction was directly transferred to Dongsheng Holdings, plus the previous 9% shareholding Wei Dongsheng indirectly controls 15% of Tencent’s equity, more than Zhang Zhidong and Ma Huateng combined.

Wei Dongsheng so despised Tencent's position, but weirdly became Tencent's largest individual shareholder, it is really unpredictable. When the equity adjustment contract was finally signed, Wei Dongsheng, as Tencent's largest natural person shareholder, once again came to Shenpeng.

At the celebration dinner that night, Ma Huateng also attended and met Wei Dongsheng accompanied by Zeng Liqing. Ma Huateng always has a poker face that is not angry and pretentious. Perhaps considering that the atmosphere is a bit embarrassing, Zeng Liqing deliberately changed the subject and started: "I heard that Spring and Autumn Search will also be listed in the United States?"

Wei Dongsheng: "No."

Zeng Liqing was surprised: "Is this news a misinformation?"

Wei Dongsheng: "It's just a strategy to attack Baidu's listing."

Zeng Liqing and Ma Huateng were awe-inspiring.

In Wei Dongsheng's plan, holding shares in Tencent is a scrap, and Chunqiu Search is the main battlefield.

The Chunqiu Public Relations Department resolved the constraints of the State Council Information Office, and immediately invested heavily in the search field to burn money to seize the market.

Measured by user traffic as a parameter, in the Chinese search engine market in the first half of 2004, Baidu occupied 29.1% of the market share, ranking first; 3721, yahoo, Yisou, and other Yahoo products accounted for 26.6% of market share, ranking second; Google It has a 19.7% market share, ranking third; Chunqiu Search has a market share of 13.1%, ranking fourth.

After a year of burning money online and offline, the Chinese search engine market in the summer of 2005 has undergone a major change. Spring and Autumn search has made great strides, rising from 13.1% to 57.5%, ranking first; Google declined slightly. With 16.5% market share, Baidu ranked second; Baidu dropped from 29.1% to 15.5%; due to the conflict between Zhou Hongyi and Yahoo, and the advancing of Spring and Autumn Search, the situation was worse than Baidu, plummeting to 6.4%.

In just one year, the Spring and Autumn Period search burned money to the first place.

In mid-2005, the characteristics of the search engine market were very clear. From 2003 to 2004, HC Search or Zhongsou, which boasted the number one search in Chinese, has been quietly forgotten. Its cooperation model with portals is not recognized by the capital market, and its market share under the new standards is also negligible. The real players in the search engine field are only four heavyweight players, including Chunqiu, Baidu, Google, and Yahoo. Among them, Yahoo is at the stage of internal and external troubles. The river is in decline and the decline is very obvious. If there is no means to recover, Yahoo may soon be out of the team.

The three search engines, Chunqiu, Baidu, and Google, all have distinct characteristics.

Chunqiu replaces Baidu's former position. It is called Chunqiu domestically and Google abroad. In order to combat Baidu’s brand reputation, since most of Baidu’s user traffic comes from pirated MP3 music and pirated online novels, Chunqiu drove Chunqiu Literature to continue to sue Baidu for infringements on behalf of the online novel camp. On the other hand, it deliberately focused on this aspect of publicity to completely stigmatize Baidu. It is simple and rude to establish a new image for Baidu: illegally find Baidu.

Use Chunqiu at home and Google abroad to find Baidu illegally.

Through the deliberate guidance of the Spring and Autumn Propaganda Department, this sentence has become the subjective impression of Chinese netizens on the three search engines of Chunqiu, Google and Baidu. In fact, as Wei Dongsheng’s most important business, Chunqiu Search has a technical background that is not weaker than that of Google, and has always been maintained at a level that surpasses Google for half a year to a year. However, search engines have characteristics of the service industry, and their quality is linked to user big data. The larger the user scale and the wider the user sample distribution, the better the user's subjective experience.

Google has huge market support in Europe, America and other countries, and has rich experience in handling English searches. The user experience in this area naturally surpasses Spring and Autumn Search; of course, Spring and Autumn Search also has its own advantages. The user experience when handling Chinese searches easily crushes Google. When Google’s loyal users failed to search for Chinese information, more and more people began to try to switch to Spring and Autumn Search.

Spring and Autumn search burns money to buy traffic and has the ability to retain users. Naturally, Baidu, which is hitting it, has nothing to fight back.

As mentioned earlier, from 2001 to 2004, Baidu was very poor and had no capital to play money-burning games with Spring and Autumn Search. In June 2004, Baidu made its third financing and only received US$15 million from eight venture capital investors including DFJ and Google. With this scale of financing, Baidu will have another two rounds, and don't even think about playing a game of burning money with Chunqiu Search. Baidu wants to play the game of burning money, the only trick is to go to the US to go public to find the wrongdoer to provide funds.

In fact, as early as the third round of financing, Baidu was already preparing to go public in the United States in the second half of 2005. Since Baidu has been poor for a long time and dare not expect to get rich, Baidu's valuation of itself is very low.

However, in order to kill Baidu, Chunqiu Search didn't want it to get $100 million.

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