These keywords filled Su Hua's mind. How big is the short video market?
Su Hua felt that Zhang Yida was more optimistic about the short video industry than he was.
I had also imagined that Kuaishou would become a unicorn with a valuation of tens of billions of dollars, but I didn’t dare to think about anything more.
Zhang Yida’s ambition is to use short videos to incubate a giant with a valuation of 100 billion US dollars or even a market value.
Which giant with a market capitalization of hundreds of billions of dollars does not dominate a single track?
Currently, there are only two people in China who can truly be called giants, one is Penguin and the other is Ahri. Qiandu is almost useless, and the market value at its peak did not exceed 100 billion U.S. dollars.
Goudong is just like that, and there is basically no hope of getting to the next level.
Rice is not an Internet company in the strict sense, it is mainly engaged in mobile phone hardware.
NetEase is the best-performing among the three major portals, but its market value has been trading sideways for a long time at 30 billion U.S. dollars.
Toutiao is developing well, but it has just stepped into the gate of tens of billions of US dollars in valuation and is still far away from 100 billion US dollars.
Five companies, namely Leech Financial, Didi, Zhonghe Group, Ruixiang Group, and Magnesium Group, are recognized in the industry as the most promising candidates to become a billion-dollar giant, because they are all still growing at a rapid pace.
Su Hua was deep in thought, and Liu Zhiping on the side was also deep in thought.
This was the first time he heard Zhang Yida reveal his ambitions. One billion daily active users and two billion monthly active users. This figure surpassed even WeChat.
WeChat’s current daily active users are barely close to 900 million. This data refers to accounts, and the real number of users is definitely not that many.
Because many people have registered two or three WeChat accounts and log in every day, one for work or marketing and one for daily life.
Liu Zhiping suddenly felt a little nervous. If the Zhonghe Group continued to expand indefinitely, would it have a major impact on Penguin?
Penguin's revenue mainly consists of games, digital content, online advertising, finance and corporate services.
The growth of Zhonghe Group currently has the biggest impact on Penguin in terms of online advertising, followed by digital content revenue and games.
They have done an internal evaluation and found that short videos consume a lot of users’ time.
Users have all gone to play short videos, but who will play QQ and WeChat? This will lead to a decrease in advertising revenue.
Users no longer play games, no longer come to Penguin Video to watch dramas, no longer come to Penguin Music to listen to music, and no longer read novels. Digital content revenue and game revenue will also decline.
In the final analysis, it is a battle for traffic and a battle for user usage time.
However, the extent of this impact depends on how short videos can explode.
When Zhang Yida said "1 billion daily active users, 2 billion monthly active users", he definitely did not refer to the domestic market.
There are only 1.4 billion people in the country, how can it be possible to make a monthly living of 2 billion.
However, domestically reaching “400-500 million daily active users and 700-800 million monthly active users” is enough to give Penguin a headache.
The only ones that are not affected are financial technology and cloud services, because the main opponents in this battlefield are Ali Cloud, Hua Weiyun, as well as Leech Financial and Ruixiang Group.
As the company gets bigger, the boundaries of competition will become increasingly blurred.
Noticing that Liu Zhiping was deep in thought, Zhang Yida secretly said goodbye that it wasn't because he was too boastful and had aroused the penguin's vigilance!
In fact, the growth of Zhonghe Group has an impact on BAT, because advertising is an important component of the revenue of these three companies.
Chinese Internet companies only make money from those three and a half businesses. The pie is so big and everyone is staring at it.
The birth of new forces must stir the cheese of traditional forces.
However, Zhonghe Group is not strong enough at present, especially Pinduoduo, and will have to rely heavily on Penguin for a long time in the future.
So fearing that Liu Zhiping might have some misunderstanding, Zhang Yida explained: "With 1 billion daily active users and 2 billion monthly active users, we assume that overseas users will account for three-quarters and domestic users will account for one-quarter.
That means there are 250 million daily active users and 500 million monthly active users in China.”
Liu Zhiping smiled and said: "Isn't it true that the domestic goal will be completed soon?"
"Yes, we have already felt that the growth ceiling has been reached, and the main focus in the future must be on overseas business development.
If Zhonghe Group wants to be a truly global company, it cannot just enter a few overseas countries and be done with it.
The goal is to make Musical.ly a globally accepted software, with overseas revenue accounting for more than 75%."
Liu Zhiping nodded. If Zhonghe Group mainly focuses on overseas development, the impact on Penguin will be relatively small.
I'm afraid that if we don't make progress, it will be unsightly to delve deeply into the domestic market and engage in long-form videos, novels, comics, games, music and other entertainment.
Although Ali Entertainment is also focusing on these industries, no matter how many companies join forces, the cake will be smaller for Penguin.
Ruixiang and Zhonghe are two important chess pieces used by Penguin to contain Ahri.
For now, its size is just right. It can restrain some of Ahri's hands and feet without backlash against the penguin.
But if it continues to grow bigger, it might become the same as Ahri and Penguin in the future.
Although the penguin did not lift the bowl, he still took away some of the food in the bowl.
Liu Zhiping felt that it was necessary to have a good discussion with Pony. Next, the support and strategies for Ruixiang and Zhonghe must be adjusted to a certain extent.
Su Hua thought for a while and said to Zhang Yida: "If Musical.ly continues to expand like this, it will definitely lead to counterattacks from Facebook and Google."
Zhang Yida nodded. The biggest influence must be on Facebook, followed by YouTube, a subsidiary of Google.
The reason is the same as Liu Zhiping's worry about Penguin being affected, for the sake of users and traffic.
"So, you just want to settle the domestic war and welcome the counterattack of the two Silicon Valley giants with good intentions."
Su Hua looked at Zhang Yida with a smile. He thought he had found the biggest reason for Zhang Yida to acquire Kuaishou.
"That's only part of the reason."
Zhang Yida said with a smile, "I have always had a dream. My dream is to build an Internet company that can compete with Silicon Valley giants."
"This ideal is very lofty!" Su Hua praised naturally, without any intention of mocking Zhang Yida.
In fact, among Internet entrepreneurs at their level, who doesn’t have greater ambitions?
Zhang Yida continued: "Ruixiang is engaged in financial technology, which involves a lot of personal information and is very sensitive. We will definitely not be able to enter the European and American markets.
Let’s not talk too far, just take Leech Financial’s acquisition of MoneyGram in the United States as an example. Do you think it can be successful?”
Liu Zhiping has a background in finance, and he is in a high position as President of Penguin. He sees problems very accurately.
He shook his head and said: "There is little hope. There have been many cross-border mergers and acquisitions by Chinese companies that have been blocked by American politicians and governments, and they have all failed to obtain approval from the Committee on Foreign Investment in the United States.
There is only one reason: it involves national security. Although this reason is nonsense, it is difficult to refute.
Don't look at the fact that Jack Ma met and shook hands with Trump this year, and promised to create one million jobs in the United States.
When it comes to key issues, these so-called "friendships" and "commitments" don't work at all.
This time, Leech Financial Services Group may be in for a big fight, and may even have to pay liquidated damages for failed acquisitions.”
He is simply a prophet, and all the predicted results come true.
However, this cannot be said to be how awesome Liu Zhiping is. In fact, most people are not optimistic about the acquisition of Leech Financial.
Maybe within Leech Financial Services, even Jack Ma is not very optimistic about it!
It can only be called taking a chance!
Everyone is happy if it succeeds. It is not surprising that the valuation of Leech Financial Services Group, which has won the US market, has increased by one to two billion US dollars. Moreover, its entry into the US market is of great symbolic significance;
If it fails, 30 million US dollars will be treated as a lottery ticket.
Zhang Yida spread his hands, "Yes, Western countries have always been prejudiced against us!
Ruixiang has no chance to enter Europe and the United States, but Musical.ly has a chance, and it should be said that it has already taken action.
A short video APP is far less sensitive than payment software.”
Zhang Yida looked at Su Hua and said: "So, this is our opportunity now. Our two companies will merge into one and work together to make short videos bigger and stronger.
If we continue to spread our power, it is very likely that Facebook and Google will defeat each other!"
Su Hua laughed: “DouShi focuses on first- and second-tier cities, Kuaishou focuses on third- and fourth-tier cities and rural areas;
Musical.ly's current market is also mainly in Europe and America; Kuaishou's overseas version is mainly in Asia.
There seems to be no conflict between our two families at the moment!"
"Yes, there is no conflict, but it is only for now. What about one year from now, two years from now?"
Zhang Yida softened his tone and advised: "Let's not do this kind of thing where relatives hate and enemies are happy. We clearly had the opportunity to plant a flag on the top of the world's Internet, but in the end we got the advantage of foreigners.
Mr. Su, after the merger of Douyin and Kuaishou, the Kuaishou brand will still be retained.
At that time, you may want to be in charge of domestic Kuaishou, or you may want to manage the entire short video division.
You will be the president of the short video division!"
President of the short video division, in charge of multiple short video brands at home and abroad.
Zhang Yida is quite optimistic about himself, otherwise he would not be given such a high position.
However, when Su Hua thought about being inferior to others, he felt a little unhappy.
Although Kuaishou is valued at only a few billion dollars, he is the well-deserved boss and has everything he says in the company.
If you join Zhonghe Group, you will have CEO Lu Qi and even more, Chairman Zhang Yida.
"Mr. Zhang, I need to think about it. This is too sudden."
Su Hua paused and then said: "Both the founding team and the shareholders need to negotiate and communicate."
“USD 5 billion! This is our offer for Kuaishou.”
Zhang Yida smiled and said: "It doesn't matter if it's all cash or all equity acquisition."
The offer of US$5 billion is not low, but it is not high either.
After Kuaishou completed Series D financing from Penguin Investment, its valuation reached US$2.5 billion.
A few more months have passed, and Kuaishou Live’s income has been rising steadily.
We have found the right business monetization model!
There are already institutions outside that have quoted US$5 billion to invest in Kuaishou, and some have even quoted US$8 billion.
However, there are some differences between the valuation of financial investments and acquisitions. The former prefers premiums, while the latter prefers lower prices.
Su Hua has no doubt whether Zhonghe Group can afford US$5 billion in cash. After all, it has only raised US$4.5 billion in cash.
If there is a difference, you can refinance or borrow a lump sum to settle the matter.
Su Hua thought about it for a while and asked, "What if we don't agree to the merger?"
Zhang Yida put away his smile and said, "Then use 5 billion US dollars to paint walls in rural areas and provide live broadcast subsidies and short video subsidies.
Because the overseas market is no longer our focus, we can only focus on the domestic market first."
The words were full of threats, but Su Hua didn't get angry. He was just discussing the matter.
If he had billions of dollars, he would probably be even more exaggerated than Zhang Yida.
Mobile Internet, which trend has not erupted in subsidy war?
Short videos are currently fine, and only subsidize creators.
If one day we even subsidize users who watch short videos, I'm afraid it will be a mess again.
In the end, Su Hua still did not give a clear answer.
Zhang Yida was not in a hurry and gave Su Hua a week to think about it.
One week is enough for Kuaishou’s founder team and shareholders to come up with a plan.
Digua Video has not made any large-scale efforts and is just waiting for the outcome of negotiations with Kuaishou.
Whether you want war or peace, it depends on the other party's choice.