Restart life

Chapter 144 0141 [Getting something for nothing]

The crackdown on QQ actually started last year.

NetEase Popo and MSN were the first to launch, followed by the Chinese version of Yahoo! Messenger, then Sina acquired UC, China Telecom launched VIM, Sohu launched SoQ, 263 launched E-Talk, China Netcom launched Tiantian Instant Messenger, Alibaba launched TradeManager...

This is just a small part of the more recognizable ones; there are over 200 products similar to QQ across the country!
Just when Tencent's top management was in a state of panic, China Mobile stabbed them in the back with remarkable precision.

QQ has always been a money-losing business with questionable profitability, forcing Tencent to rely on Mobile Dream Network to recoup its losses. At one point, Mobile Dream Network accounted for 63.6% of Tencent's total revenue.

Tencent contributes 24% of the profits to Mobile Dream Network (compared to only 7% for Sina, which ranks second), and 70% of the SMS messages processed by Dream Network come from QQ.

Therefore, it seems that Tencent and China Mobile should form a close partnership.

What the hell!

The mobile company, being a large and powerful entity, believed it was responsible for making money for Tencent. Moreover, the revenue sharing agreement signed between Mengwang and Tencent in its early stages was too low: Mengwang received 15%, and Tencent received 85% (with only 70% actually received).

The mobile company's thinking was: Damn it, 70% of them are actually from Tencent, am I doomed to beg for food on my knees?

So, at the critical moment when Tencent was besieged, the mobile company took advantage of the situation and threw out a new contract: a 50/50 revenue split!
It's supposed to be a 50/50 split, but if you factor in all the other miscellaneous stuff, Tencent will only get 42% at most.

Tencent was forced to accept a new contract...

Upon hearing the news, Tencent's stock price immediately fell below its IPO price.

The company has not yet recovered, and Tencent is planning to raise funds to buy back its shares in order to boost its stock price and improve investor confidence.

At this very moment, MSN China colluded to form an anti-QQ alliance!

At this point, Tencent is not yet in its most dangerous situation.

In six months, the Ministry of Information Industry (MIIT) will issue a document to strengthen the supervision of mobile information services, which will be a direct blow to Tencent.

……

Deep city.

An acquisition agreement is being signed.

Zhang Xiaolong officially sold Foxmail (QQ Mail) to Tencent, but he was unwilling to work in Shenzhen. Therefore, Tencent funded the establishment of a research and development center in Guangzhou, with Zhang Xiaolong as its head.

Zhang Xiaolong is the one who later created WeChat.

"Happy cooperation!"

Little Ma shakes hands with Zhang Xiaolong, and reporters snap photos.

The first half of the acquisition ceremony was quite lively and festive.

During the Q&A session at the press conference, Pony Ma seemed to be struggling to keep up.

"Mr. Ma, there are rumors that MSN is forming an anti-QQ alliance. What measures will Tencent take to counter this?" The reporter showed no mercy.

Pony Ma said, "We will continue to work hard to make good products and bring a better experience to users."

Another reporter asked, "Since the 315 exposé last year exposed the rampant overcharging for wireless value-added services, complaints continue to pour in. What corrective measures has Tencent taken?"

Pony Ma said, "Tencent isn't the only company providing wireless value-added services. We have the most business, but we receive very few complaints. It's certain competitors who are disrupting the industry ecosystem. Moreover, we are very law-abiding and have actively cooperated with the Ministry of Information Industry's rectification requirements."

"Tencent's stock price has been below its IPO price since November last year. What measures has Tencent taken to address this?"

"The board has decided to repurchase 10% of the share capital, plus $6000 million worth of stock, in three tranches. The repurchase program will begin next month. Our transformation has been very successful, and the revenue share of wireless value-added services is declining month by month. This indicates that QQ's profitability is continuously improving..."

The reporters' questions were increasingly precise, hitting Tencent's various pain points.

Exhausted and speechless, Ma Yun only stayed at the dinner for a short while before returning to his office to rest with his eyes closed.

Tencent must transform, which will require a change in its corporate structure.

However, Pony Ma doesn't yet have a clear idea of ​​how to transform or modify the system.

"Boom boom boom!"

"Please come in."

Chief Administrative Officer Chen Yidan walked in and sat down opposite Pony Ma: "Our management mechanism has problems. The R line is being dragged down by more than 60 product departments, and the progress of all projects is very slow. We must connect the R line and the M line, implement a product manager system, and let whoever does well form an independent team. Only in this way can we form a fighting force."

“Such reforms face significant resistance,” said Pony Ma.

Chen Yidan said, "But it must be changed. We old folks will definitely support you."

Ma smiled when he heard this, saying that the resistance to reform came from some older people.

After Chen Yidan made his statement: "A company called ByteDance contacted their subordinates and said that MSN invited them to join the anti-QQ alliance. The boss of this company wants to speak with you directly, and the matter has been reported up the chain of command to me."

Pony Ma asked, "What kind of company is ByteDance?"

Chen Yidan said, "It was created by a Peking University student. The core product is called Xiaonei.com, which has similar functions to our upcoming QQ Space. But they only focus on campus social networking, and in just four months, their user base has grown to more than 40. Moreover, the user growth rate is getting faster and faster, and it is estimated that it will break 100 million in another two months."

"Like Sohu's alumni directory?" Pony Ma asked. Chen Yidan said, "An evolved version of an alumni directory based on Web 2.0. This student is very interesting; he's currently a freshman."

Pony Ma's heart skipped a beat: "How about we acquire Xiaonei.com?"

Chen Yidan shook his head: "Xiaonei.com and QQ Zone overlap. Moreover, Xiaonei.com called to say that MSN offered $50 to acquire a 20% stake in Xiaonei.com. They flatly rejected this offer, and MSN is discussing renegotiation. If MSN is willing to compromise, it may acquire a 15% or 10% stake in Xiaonei.com."

"They overestimate themselves," Little Ma commented.

Given the current situation of Xiaonei.com, a valuation of $300 million to $400 million is quite reasonable.

If it exceeds this, most venture capitalists will shake their heads.

The second wave of internet investment has not yet taken off in China!
Tencent is currently facing a severe cash crunch. It has just acquired an email business, is establishing a research and development center in Guangzhou, and will next spend a huge sum of money to buy back its own shares.

In addition, Tencent's business is currently bloated and it is thinking about how to reform, so it is not a good time to acquire Xiaonei.com.

"Should I call him?" Little Ma asked.

Yes. I'll send you his phone number.

Chen Yidan added, "I searched online and found that this guy is also an internet celebrity and a bestselling author. He also runs a game company, which is growing very rapidly. Some time ago, he criticized 'Wolf Totem,' which garnered a lot of media attention."

"He's got some serious issues." Little Ma picked up his phone.

Chen Yidan silently left the office.

The call is connected.

"Hello, this is Ma XX."

"Mr. Ma, could you send me 10 five-digit QQ numbers?"

"Ok?"

Little Ma was instantly dumbfounded. He thought the other party wanted to discuss some kind of cooperation, but they immediately asked for a five-digit QQ number.

Chen Guiliang said, "I'm a loyal QQ user. I've loved QQ since I was a child. This time, MSN's investment offer was so generous, but I didn't agree... Well, maybe I will eventually agree. Maybe MSN can even make some concessions."

"Anti-QQ Alliance, right?" Pony Ma asked. "What does MSN want you to do?"

Chen Guiliang said, "This is a confidential matter in business negotiations, and I must abide by business ethics until the negotiations are concluded. However, including Taobao, nine companies have already joined the MSN anti-QQ alliance."

“I already know this news,” said Brother Ma.

Of course, it was MSN's early release of the news that continued to undermine investor confidence and kept Tencent's stock price from rising.

Chen Guiliang asked, "If I terminate negotiations with MSN, can I make two deals with Tencent?"

"What kind of deal?" Little Ma asked.

Chen Guiliang said, "Please help me publish two articles on Tencent.com for free, one promoting my game 'Three Kingdoms Kill' and the other promoting my novel 'Those Things of the Ming Dynasty'. Please give me a featured spot on Tencent.com's game channel, a banner ad for 'Three Kingdoms Kill' for five days, and a side ad for a month. Please give me a 50% discount on the advertising fees."

"You called me just for this?" Little Ma was speechless.

Chen Guiliang laughed and said, "It's a small business, I can't afford advertising fees. I know my own limitations, I wouldn't dare to ask Mr. Ma for an exorbitant price. Let's make friends, maybe we'll have a chance to cooperate in the future. In return, I can give Tencent products a 50% discount on advertising space on Renren.com."

What kind of reciprocation is this? It's purely about attracting business for Renren.com!
It's not just about collecting advertising fees. In the future, when Ao Yanchen discusses advertising business, he can also promote it like this: "The advertising effect of our Renren.com is very good. Even Tencent advertises on Renren.com..."

This will greatly help Renren.com expand its advertising business.

What was a big deal for Chen Guiliang was insignificant to Xiao Ma.

Little Ma, on the contrary, valued those 10 five-digit QQ numbers more.

Because high-end business professionals in China, especially senior executives of large companies, now almost exclusively use MSN. Even if you normally use QQ, you'll be required to use MSN when contacting other companies.

This trend is spreading to small and medium-sized companies.

Little Ma said, "I can give you 10 five-digit QQ numbers. You're an internet celebrity, and I hope you'll publicly declare on your blog and Renren homepage that you usually use QQ for work."

“Sure,” Chen Guiliang said. “If the ads on Tencent Games Channel can make my game ‘Three Kingdoms Kill’ free, for twice the time I just mentioned, I can even write a blog post listing all the advantages of QQ over MSN.”

This suggestion caught Pony Ma's eye.

Yes, we could ask well-known bloggers to help us publish some advertorials on QQ.

The two sides reached an agreement without further discussion.

Half an hour later, Chen Guiliang received a text message containing 10 QQ numbers and passwords, as well as the phone number of the person in charge of Tencent's advertising department.

Chen Guiliang announced with great pleasure: "In recognition of the outstanding contributions made by Ao Yanzhen, Guo Feng, and Dong Qianqiu to the company, each of them is hereby awarded a five-digit QQ number. Other employees will also be awarded five-digit QQ numbers for any outstanding achievements in the future!"

Xie Yang had been eyeing Chen Guiliang's six-digit QQ number for a long time. He thought to himself that he was doing quite well, and since Chen was an old classmate, he figured he would definitely be among the next wave of rewards.

Ao Yanchen, however, pondered: Why do I feel something's not right? This reward is completely free, like getting something for nothing.

(End of this chapter)