Chen talks about two startups: selling YouTube was the only option

YouTube founder Chen

A pair of black frame glasses, a sign of hair, very hard to speak Chinese, but the total control not to jump out of English words: 34-year-old YouTube founder Chen Stevechen after leaving Google, and his partner Chad Herli (Chad Hurley) decided to start two times, Set up a new company AVOs and put the focus of one of its new products, delicious bookmarks, on China.

Why sell YouTube? After earning 13 billion yuan in 20 months, why do you choose to start a business and buy delicious from Yahoo? Before many traditional internet giants to escape the fate of defeat, Chen and his old partner can break the curse? With many questions, "Daily economic News" reporter (hereinafter referred to as NBD) interviewed Chen and Hurley.

Selling YouTube is the only option.

In October 2006, Google bought YouTube, a 1.65 billion-dollar stake, as the largest acquisition by Google since its creation in 8 years. By acquiring YouTube, Google has been able to march into the display advertising market, bringing in billions of of traffic. Today, Google has become an undisputed hegemon in search and video.

Now talking about the deal, Chen joked that if YouTube were to end up in Yahoo's pocket, Google would be passive in the video content field, and the competition for several big internet companies would be changed.

NBD: We noticed that the valuation was over 2 billion dollars a few days after YouTube was bought by Google, but there is still a big gap compared to today's Facebook, do you regret selling early?

Chen: You don't mention Facebook, and I'm sorry! (laughter) However, at the time of YouTube, our team agreed to sell the company because everyone was exhausted and each person worked for more than 100 hours a week, working 14 hours a day, and seeking acquisitions might be our only option.

NBD: Why?

Chen: In fact, we realized at the time, many things can not be done by small teams, such as we want to support a variety of mobile phones and wireless network of video services, like YouTube in various countries on the line, this need to compile the site into different languages, and then according to the preferences of local people to do content layout and choice, The hot videos everywhere are different.

More importantly, fast-growing YouTube is in dire need of powerful data centers, and we need more bandwidth and more servers, and it's the truth that big companies need help.

NBD: It is said that at that time Yahoo and Google were among them, can you say and Yahoo negotiations? Why didn't you choose Yahoo?

Chen: In fact, I almost chose Yahoo. After meeting with Jerry Yang, I even wrote an e-mail to him impulsively, of course, when I did not meet Google's Schmidt. Although Jerry Yang told me that they would give us a lot of authority to do what they wanted to do, there were some details that worried me, for example, that Jerry Yang was no longer a CEO, and then CEO Semel was a Hollywood-style person who knew how to advertise and sell, But YouTube was far from profitable, and we didn't spend any time on advertising.

In addition, I am also worried that Yahoo will let us move out of the company, will not immediately open the two of me and Charlie, our senior manager will not immediately change, as PayPal after the sale to ebay happened.

NBD: Why do you choose to work with Google?

Chen: After the meeting with Jerry Yang, we talked about whether to work with Yahoo that night, but Chad and I want to contact with Google, and one of Sequoia's partners, Michael Morize, is on the Google board.

I prefer Google's engineer culture to the feeling of being surrounded by smart people. In addition, Google is very sincere to the transaction, so many programs to speed up the completion, not to annoy us. And Schmidt promised that YouTube would operate on its own, and that, by convention, all companies bought by Google would have to do two interviews, but we didn't.

However, the stock price of the two also brought me some trouble, because we deal in mergers and acquisitions are done in stock, so it is a judgment to judge which company's stock has more growth value.

At that time, Google's market value has exceeded 100 billion dollars, at that time looked very high, and Yahoo is 30 billion U.S. dollars. I can't guess how much Google's market capitalisation is going to rise, and Yahoo's top 80 billion dollars seems to have a bigger upside. But now that Google has more than 186.1 billion dollars in market capitalisation, we have to say that our luck is good.

Delicious's entrepreneurial dream

Seems to be doomed to "fate." Although Chen's first project, YouTube, was not sold to Yahoo, its second project was bought from Yahoo. The delicious Bookmark collection and Sharing tool lets Chen find the sprint direction for AVOs company.

From YouTube to AVOs, Chen defines their new journey. According to Google's model, not to develop a product, but to create a platform. He even thinks that AVOs's new ideas may be greater than YouTube, because in the future the Web world is no longer a cold machine recommendation, but a search and recommendation based on social relationships.

What kind of company is Nbd:avos? What is the direction of business in the future?

Chen: Frankly, we didn't think about what to do at that time, just a vague direction, hoping to make a breakthrough in "social media". We believe that in this increasingly complex and fragmented information world, how people find the information they want most, and which information will be of interest to different people, no service has been able to solve the problem so far.

NBD: Why do you choose to buy delicious from Yahoo instead of creating your own brand?

Chad Herli: Although we don't know why Yahoo sells it, it's a great opportunity for us. We believe that it is very difficult for the Internet to create a brand and become a popular brand. And delicious itself already has a certain brand foundation, is the network's largest bookmark class site, the world has millions of users, so after the acquisition, we only need to further improve on its basis.

Delicious was once thought to be the revival of Internet social software, and it was the original intention of one of us to buy delicious when the Web2.0 company, which pioneered the Internet social sharing, collapsed. When we learned that Yahoo was about to sell or close delicious in December 2010, we felt the opportunity came.

NBD: In addition to delicious, but also acquired the TAPL, what kind of consideration?

Chen: TAPLL is a data analytics company that integrates social publishing with analytics as a single stripe to help advertisers stick to the influence of their marketing campaigns, and it can be analyzed to find out what people on social networks are interested in, which may become the next generation of information retrieval.

NBD: We note that the simple social bookmarking service has been validated as not feasible, four or five years ago a large number of enterprises have been accompanied by delicious down, China to do similar services in the network has been tepid, why do you still optimistic about delicious?

Chen: Delicious did not do well because Yahoo did not regard it as an independent product to operate well, if we are well planning the direction of delicious, there must be great potential for development.

On the other hand, delicious was originally based on the needs of the early Internet, mainly for bookmark sharing, and not too many pictures and other content.

NBD: Why do you want to separate delicious bookmarks from delicious?

Chen: Many companies in the United States or the global success, only in China to build a team, and the product translation will be directly introduced into China. They fail to realize that the Chinese market is very different and needs to be designed for local users when developing products. In addition, because of the different user environments in China and other countries, different preferences, regulatory policies, separate to operate to meet local needs.

NBD: We note that AVOs products in addition to delicious, there are Chinese version of delicious bookmarks and user-generated magazine editing, publishing platform Zeen, but these three products have duplication of features, how do you think?

Chen: In fact, three products are meant to solve the same problem-to help users find content. Three products are built on a shared platform, but the methods used are different.

Delicious has a long history, to meet the needs of both users, to the main collection links, and delicious bookmarks and zeen, user-generated content, you can directly read the content, more attention to social elements.

NBD: Is there any commercial interest in AVOs's products at present?

Chad Herli: The purpose of the company is to make money, but we still focus on the product itself. I believe that advertising is the Internet is very effective means of profit, but we hope to provide valuable advertising, similar to Google AdSense.

NBD: We learned that AVOs completed a round of financing last month, and why would a company like AVOs, a top VC in Silicon Valley, choose to accept an investment in an innovative factory in China? What will finance be used for?

Chen: I and Kai-fu Lee in Google, we almost the same time to notify each other to leave Google. I joined the Hundred people (American Chinese elite), which he introduced. At the same time, Kai-Fu Lee on the AVOs China team in the formation and development of delicious bookmarks played a very important role, so of course, in this financing institutions will have innovative factories.

The financing also helps the entire company focus on product design and improve the user experience. Of course, do not rule out the same time will look for some mergers and acquisitions goals.