In the Internet bubble in recent years, almost everyone has joined in the feast, and they have made all kinds of incredible moves.
Everyone should know that the survival of Internet companies depends on seizing traffic as quickly as possible and expanding their customer base as much as possible, even if this will cause huge losses, they will not hesitate.
Expansion or survival, you can only choose one outcome.
Therefore, all Internet companies are waving the money raised from financing in order to occupy more and more traffic.
There is no doubt that in this crazy gambling game, what Li Yuan said is inevitable - traffic for the sake of traffic, and has long forgotten how to monetize traffic!
Due to the large amount of hot money from Wall Street, one after another poured into Silicon Valley. When the market was highly prosperous, a large number of start-up Internet companies carried out stock IPOs, easily making huge amounts of money in the stock market. Even if they never made a profit,
Or in some cases, you don’t even have any income yet. You are still opening the door to convenience. The euphemistic name is - you are betting on the future!
In that case, the longevity of a company is measured by its cash burn rate. This means the time it takes for a company that is neither profitable nor has a viable business model to squander all its financing.
Of course, in order to compete for traffic, we must continue to increase exposure. In this situation of involution, it gradually turns into advertising bombing.
In order to seek to expand their customer base, including TV advertisements, print advertisements and targeting professional and easy-to-use events, many Internet companies have adopted a variety of methods, and even come up with meaningless but impressive names.
For example: Yahoo! Parallel lines! Ahem.
Especially in the field of media advertising, the 34th Super Bowl held this year suddenly attracted sponsorship from 17 Internet companies, each paying more than 2 million US dollars for a 30-second advertisement?
Damn it! More than 2 million US dollars was burned in 30 seconds without blinking an eyelid?
There is even a CBS-backed website, iWon, which gave away $10 million to one lucky contestant during a half-hour primetime show on CBS.
This is simply a crazy world. Have Internet companies now burned banknotes as papyrus?
Of course, such an easy way to make money has also attracted a large number of speculators. Suddenly everything was going downhill.
Some traditional companies apply for a domain name, open a website and say they are an Internet company, and then start financing with their eyes closed and just bragging about it.
Many young entrepreneurs drive to Silicon Valley and open a website to do business. Various Internet companies seem to have sprung up like mushrooms after a rain:
have
And no one has to worry about running out of money at all, because Wall Street is behind them. As long as they wait until the IPO is successful, they will immediately become multi-millionaires and billionaires. Then they can escape victoriously together...
Did you notice? In this era, the concept of fresh food delivery has emerged. It cannot be said that these Internet models are wrong, but they are too advanced. If you are half a step ahead, you are a genius, if you are one step ahead, you are a madman!
But as long as you can come up with "concepts", you can still make waves in Silicon Valley and Nasdaq.
In addition, Wall Street began a financial flood, and a large amount of hot money poured into the stock market. This also encouraged speculation to a certain extent.
Thinking about it from the perspective of ordinary Americans at that time, these Internet companies were rising so well on Nasdaq, and I had money. Although I didn’t understand what the Internet was, other people were investing in it. Why didn’t I go?
How about giving it a try?
With this mentality, investors gradually lose their rationality and think that as long as they invest directly in Internet companies, they will definitely rise anyway.
Entrepreneurs are even more crazy when they see this situation. Anyway, as long as they put on the name of an Internet company, they will definitely succeed, and they will be done.
Investors stare at those entrepreneurs, as if they are saying: Start a business? One that is listed on Nasdaq? Just give them money.
Driven by the joint efforts of investors and entrepreneurs, this drama has even been pushed to outer space.
It should be said that this kind of crazy speculation has objectively promoted the development of the Internet.
In just ten years, the proportion of American households owning computers has increased from 15% to about 50%. Computers have changed from a luxury product to a household necessity, similar to major appliances such as washing machines and televisions.
Everyone has discovered that using computers can do many things that were previously impossible, such as online shopping, chatting, sending emails, etc., which is very convenient. The number of Internet users has also grown rapidly with the growth of computer users. It only took four years
The Internet alone gained 50 million users, while it took 13 years for televisions and 38 years for radios to reach the same number of users!
Obviously, the popularity of the Internet also depends on the stock market. Such popularity has caused computer IT to rapidly decline from a professional luxury product to a cheap daily necessities.
And this kind of growth rate also brings a lot of traffic, which in turn inflates the Internet bubble even bigger? Pushes the stock price higher?
Obviously, among this group of lunatics, as long as someone maintains a trace of sobriety, they can judge that the bubble is getting bigger and bigger, and a financial crisis is imminent.
Against this background, Li Yuan hurried to Los Angeles. He had no control over the affairs of other Internet companies, but at least he needed to cool down the parallel lines.
…
"Martin, Elna. This is my secretary, Miss Ying." On the way out of the airport, Li Yuan took the initiative to introduce them to each other.
Martin smiled and said: "Boss, you came just in time. There is a yacht party this weekend. Our company has rented a luxury cruise ship. It can accommodate 6,700 people."
"Oh? What theme?"
"It's a barbarian carnival? You are only allowed to wear leaves. Hehe." Martin smiled with an unclear meaning. Anyway, men should understand, "Also, in order to celebrate the successful launch of "Savage", we invited many distinguished guests.
And... an actress! No way, this is Hollywood! Hahaha!"
This chapter is not over yet, please click on the next page to continue reading! Li Yuan is a little confused. Does such a bad thing need to be celebrated? And he also rented a luxury cruise ship in a big way?
After asking, he found out that it was not Martin and Elna who were lavish, this was already a trend in the Internet circle.
Just in the past few months, Internet companies have become even more crazy than before.
Some companies just add an e- in front of their name or add an e at the end and then publish a business plan. Investors think it is an Internet company with investment value and spend money like crazy. Just a newly listed Internet company.
Can raise tens of millions of dollars.
Communication companies and network companies that provide services to Internet companies are also favored by investors. In 1999 alone, Qualcomm rose 26 times, and there were 12 other stocks that rose more than 10 times.
The stock price of the Internet service company Akamai quadrupled on the first day. In short, the bosses eat meat, the younger brothers behind them eat soup, and everyone gets rich together.
By this time, the overall P/E ratio of the Nasdaq index companies had reached 200, which was more than twice as high as the overall P/E ratio of the Nikkei 225 index companies of 80 during the real estate bubble in 1991. It seems that everyone has forgotten the real estate bubble.
It's a tragic situation, or it's selectively ignored. It doesn't matter whether the company makes money or not, as long as the stock price rises.
With such an easy financing success, there is a carnival of investors at the top and a grand ceremony for entrepreneurs at the bottom. Upstream money pours into these companies like a waterfall. The bosses of these companies are also stunned by the smash, and they begin to forget that the money must be paid back sooner or later.
Investors began to burn money without restraint.
First of all, of course, there are the high-tech industry talents who are throwing money at those programmers.
Since the Internet has only been developed for less than ten years, there are too few programmers on the market. These companies have to recruit programmers with high salaries, casually offering annual salaries of US$80,000 to US$100,000. And there are many more.
Equity incentives.
You know, this was 20 years ago. When Li Yuan was reborn, the starting salary of programmers in the Bay Area in the United States was only US$100,000. And there were even 35-year-old graduates in China.
However, high salary alone is not enough. We still face all kinds of poaching. Programmers are always in short supply.
Things like flexible working hours, T-shirts to work, game room lounges, five-star buffets in kindergartens... these are already trivial. In order to win people's hearts, programmers often hold various extravagant parties. Money is not
The problem is, as long as everyone is happy.
Anyway, just find any reason: throw a party when the company is established, throw a party when the company changes its name, throw a party when the project is launched, throw a party when the product goes online...
At that time, Silicon Valley held more than 20 parties every week, with unlimited drinks and even invited celebrities to sing. Even passers-by who had nothing to do with these companies could come and join in the fun. A party could easily cost hundreds of thousands of dollars.
.
So, Martin and Elna really had no choice. If it weren't for the various new party parties, all those boring programmers would have run away.
Hearing this, Li Yuan was a little bit dumbfounded. Sure enough, no matter the changes in time, rebirth and time travel, these programmers are really... very boring!
In this case, don't let it spoil your fun yet.
Li Yuan smiled and asked: "Elna, after the launch of "Wild Wilds", how are your sales here?"
Elna quickly introduced the sales situation. It was almost... not satisfactory! It can increase the income by several million US dollars every year. Although on the surface, it is not bad, but compared to the current total market value of Parallel Line Technology, it is only
It can be said to be a slight subsidy. At least the money from the luxury cruise is earned, right? (laughing and crying)
But Elna was still very happy: "Boss, you made the Parallel Line Community game fully public, and it was strongly welcomed by the studio."
"oh?"
"We shouldn't be able to get games from famous studios. But many small studios are finally able to get rid of the squeeze of Nintendo and Sony. Many have expressed strong intentions to cooperate."
At Parallel Line Technology, Li Yuan adopted another model - simply making the Parallel Line community public, any game can be launched here, and Parallel Line only charges a certain share.
In other words, Parallel Line Technology has disclosed its sales channels. Those game studios are free to sell their own games. If it is a big success, it will share with Parallel Line; if it fails, there will be no loss.
This is equivalent to giving game studios around the world an opportunity!
Here, Li Yuan left another profit point for Parallel Line Technology. After he gradually withdraws, he can also make a smooth transition for Parallel Line Technology.
"Haha, is there any news in Silicon Valley recently?" After finishing the serious talk, Li Yuan entered the chat mode.
"Oh! The biggest news is that the merger of AOL and Time Warner has been approved..."
In Li Yuan's previous life, this incident was also quite famous. The merger of America Online (AOL) and Time Warner created the largest merger in history. After the merger, the company's market value reached US$360 billion. It was also AOL's swindle against Time Warner.
Tunxiang. The situation of Internet companies is like a shadow, which also caused a sensation all over the world.
And after the merger of the two companies, they have become a giant in the online content media industry. Covering everything from content production, dissemination to consumption, it seems to be a very cost-effective deal.
But in the end, it turned into a mess. The management of this company caused great chaos, and the two leaders were kicked out of the company. In the end, AOL's name was even removed from the new company?
It turned into a quite failed merger and acquisition case.
Crazy, everything is crazy anyway!
Li Yuan laughed and shook his head, having nothing to say about such a crazy move.
Come on! Burning money is understandable, but at least like Amazon, Ebay or Google, invest money in the construction of technology or the product itself?
If we just stay in the money-burning model of advertising and traffic promotion, occupying the market depends entirely on expensive advertising and mergers and acquisitions. As funds are quickly burned out, the market growth rate is far from keeping up with the expansion rate of Internet companies.
That is to say, Internet companies are growing very fast, but the number of people surfing the Internet has not increased enough. The number of Internet users is not enough for these companies. The story can no longer be told, and the bubble is on the verge of bursting.
As Buffett said, when the tide goes out, you realize who was swimming naked.
The current Internet industry is like a powder keg, with only one spark left to explode.
"Boss, next week is the shareholders' meeting. Do we need to prepare any more?" Martin asked with a smile.
Li Yuan was a little confused: "Huh? What should I prepare?"
This time he came to the United States mainly to attend the shareholder meeting of Parallel Line Technology. This may be his last time to attend.
However, there are standard procedures for shareholders' meetings, so why do they need Martin and the others to prepare?
Unexpectedly, Martin and Elna looked at each other and laughed: "Head! It's a new party! Do you like Snow White? Or conquer alien girls? Hahaha!"
"Fuck!"
Li Yuan was completely shocked. Martin, Elna and the others...shouldn't have changed their careers, right?
