Chapter 541 Fighting in the Arena

Chapter 541 Fighting in the Arena

In Silicon Valley, companies are busy eating their own rice bowls.

Unless you step into some brand new entrepreneurial track, or directly acquire and merge a company, and indirectly grab the track like Google acquired YouTube, it will be difficult to reach into other people's bowls.

The reason why the famous Microsoft encountered antitrust investigation and was besieged by a group of Silicon Valley companies in the 1990s was mainly because Bill Gates was greedy and wanted to use the huge user base of the Windows operating system to incubate his own browser.

Back in 1997, the U.S. judicial authorities accused Microsoft of monopolizing the operating system market and illegally bundling IE browser with Windows operating system, creating unfair competition.

This antitrust investigation lasted for more than four years. Silicon Valley peers were very sad and busy adding insult to injury to support Netscape Navigator, which was bullied by Microsoft.

There is no way. Microsoft Windows is too big. Once it starts to do other businesses, it will easily bring disaster to others. Colleagues must be on guard.

Behind many industry rules is actually a balance reached after a conflict of interest occurs, rather than true fairness and justice. Once their interests are affected, their bandit nature will immediately be exposed. TikTok, Warwick, and electric vehicles are all typical examples.

It’s different here in the mainland.

In fact, many markets are more open and free, and the business atmosphere is more relaxed than that of foreign markets that have long been "implicitly monopolized."

As long as you do business in an orderly manner and don't jump up and down like Jack Ma after getting rich, and arrange the taxes to be paid and the benefits to be provided to employees, Fan Wumian believes that business is actually quite easy to do.

On the other hand, in Silicon Valley, YouTube was being held back and smeared by others. It received a new lawsuit almost every one or two days, and its legal costs were as high as two to three million US dollars a month. This consumed YouTube's working capital like crazy, forcing it to accept the acquisition proposal, which was obviously legalizing the rogue business war.

The international version of Weibo, which is just starting out and is currently exploring the market, has not yet attracted any attention due to its small size. Its users are mainly Chinese Americans and other Asians.

Once he starts to show some potential, he will most likely be targeted by competitors such as Facebook and Microsoft MSN. Fan Wumian can't think of a good solution, except to find a strong ally, share some of the profits and ask others for support.

When making a living on someone else's turf, there are certain rules that you have to abide by. After dividing some of the benefits, you can still keep a piece of the pie. If you don't help others get on board to make money, there is a high probability that the table will be overturned and you will be left with nothing in the end.

Comparing the two, it is no wonder that Fan Wumian feels that the mainland market is really suitable for Penguin Group's expansion.

It is like the Chinese version of Microsoft. It also has a large number of active users, but there is no need to worry about "anti-monopoly" troubles. It is very suitable for incubating some Internet companies and building a nearly complete Internet ecosystem around the core business of social platforms.

As long as companies operate in compliance with the law, pay taxes in full and on time, and create a large number of high-paying jobs, they are good companies in the eyes of mainland officials, and they compete for the market based on their strength.

Tudou.com is a little different. It touches upon the interests of major TV stations, so it is necessary to ease the relationship and benefit from it together.
After inspecting Dajiadian.com, Zhang Tao, the founder of this Internet company, arranged a lunch at the State Guesthouse.

There were also bosses of several other Internet companies, including "Xiaonei", a social platform company, "Mowang", a portal website company, and the founder of "Wufa Tongcheng".

According to Zhang Tao, they formed a group when they gathered to study, and after asking about financing yesterday, everyone was eager to meet Fan Wumian and Xiao Ma Ge, and there was no way to refuse.

He just wanted to have another meal of the State Guesthouse's state banquet dishes such as "Boiled Cabbage", "Squirrel Mandarin Fish", "Wensi Tofu", etc. He also felt that it would be nice to have more contact with mainland Internet industry practitioners and learn about the latest trends in the industry, so Fan Wumian did not choose to refuse.

During the dinner, Wang Xing, the founder of Xiaonei.com, stood up, raised his glass, and introduced himself positively:
"My company has just finished discussing an acquisition with Oak Pacific International Group. They signed a contract with me last week and acquired my company for $1600 million. I must toast to Mr. Fan and Mr. Ma. I am thinking about which direction I should take to start my second business. I may need your help at that time so that we can make a fortune together!"

Fan Wumian was particularly interested in this talented person who later founded "Meituan.com", which was one of the main reasons why he agreed to come for dinner. He raised his hand and smiled politely:
"Please sit down, Mr. Wang. Just order whatever you want. There's no need to be so formal. Oak Pacific International Group is also a venture capital company with foreign capital background that helps American investors find high-quality Internet projects in the mainland, right? It seems that in the past two years, many mainland companies have had their shares taken away by foreign capital."

Wang Xing nodded and said:
"Well, most of the funds of well-known venture capital companies now come from the United States. They have a longer-term vision and do not like to interfere with specific management. They can also assist in listing in the United States. They are more formal than other local venture capital companies."

"Many domestic investors lack Internet thinking. For example, Mr. Sun's MoNet was acquired by a company that only offered 1850 million RMB. It was sold to a US company at the same time as mine for 700 million USD."

"It feels great to cooperate with Penguin Group and Mr. Fan. You have a lot of resources. Mr. Fan gave Shanghai Dongcai Information RMB 200 million in financing some time ago, right? I just had dinner with the founder of this company the day before yesterday. He said that he only talked to you, Mr. Fan, for a few minutes, and the funds were deposited into his company's account as soon as the contract was signed. It was very quick and neat."

Fan Wumian took a sip of white wine:

"I am trying to do fund business and have just submitted an application to Bank of China Hong Kong to borrow HK$20 billion to invest in fund management and securities asset management. He uses Internet thinking to create a stock forum, which just meets my needs. To do venture capital business is to cast a wide net to catch big fish. If Boss Wang encounters an interesting entrepreneurial direction in the future, he can call me. It is really not easy to sell the company for 1600 million US dollars."

Xiao Ma also said:
"In fact, I have paid attention to your Xiaonei.com before. I feel that it meets the needs of QQ and can increase user stickiness. But later, under the suggestion of Mr. Fan, we shifted our attention to the Weibo project. Otherwise, I am afraid we would try to contact and cooperate with Xiaonei.com."

Wang Xing was a quick talker and good at socializing. He replied:

"If I can cooperate with Penguin Group, then I don't need to sell it off. Penguin Weibo is a stroke of genius. It has turned the closed social ecosystem of Personal Space into an open one. I like using it very much. Whether it is the user experience or the monetization channel, it is much better than Xiaonei.com. I feel that Penguin Group's stock price is seriously undervalued."

Although he knew that it was just polite talk, Fan Wumian still felt relieved after hearing it, and continued:

"I am still very confident in the potential of Penguin Group. We are setting up a dedicated venture capital company internally and will invest in suitable projects if we find them."

Fan Wumian has already discussed this with Xiao Ma Ge.

Instead of developing a product on your own to compete with similar competitors in the hope of saving money, it is better to directly engage in Silicon Valley-style mergers and acquisitions.

In this way, Penguin Group can maintain its good reputation in the industry and avoid a head-on confrontation with its competitors.

Currently, the pricing power of many industries in the mainland is controlled by foreign countries. For example, many Internet companies are cheap, and given the size of Penguin Group, it is not difficult to acquire them.

After eating the delicious food, Fan Wumian asked again:

"There is a company called Joyo.com that is competing with Taobao. How is this company doing?"

The boss of Wufa Tongcheng has already received RMB 500 million in first-round financing from Penguin Group in exchange for the second-round priority financing rights, 35% of the shares and 20% of the voting rights.

After listening to Fan Wumian, he explained:
"As early as 2004, Joyo.com was acquired by Amazon for $7500 million. It does not advertise crazily, nor does it spend money to grab users, but its service is quite good. The prices of goods on the platform are a bit expensive. I think users now generally buy things from Taobao. After saving store rent and more management costs, the prices are cheaper than those in physical stores." (End of this chapter)