The Internet mergers and acquisitions season: The inevitable result of self-cognition

Abstract: Internet mergers and acquisitions tide this round of intensive Internet capital mergers and acquisitions, is the level of energy accumulation after a total release, is the capital in the window after seeing the strong impetus, but also a recognition of each company after the inevitable results. May 2013

The wave of internet mergers and acquisitions

This round of intensive Internet capital mergers and acquisitions, is the level of energy accumulation of the company after a total release, is the capital in the sight of the window after the strong impetus, but also a recognition of each company after the inevitable results.

May 7, 2013 6 o'clock in the afternoon, Beijing Zhongguancun Hung City expansion building, video site Archie Art CEO Gong slowly into his company's studio. On both sides of the gong, is habitually a face serious PPS CEO Zhang Hongyu, as well as always smiling PPS President Xu Wei. The studio was already full of reporters, and when they entered the room, the flash flashed.

On this day, Baidu announced a 370 million dollar cash acquisition PPS video business, and with Archie Art to merge.

It is thought to be a landmark merger event in China's video industry, which means that after the largest two video sites Youku and Tudou are merged, players will become less of a capital alliance and the "oligarchy" of video sites is inevitable.

In fact, for many reporters, the acquisition is not unexpected, because before the announcement, there have been fairly accurate "gossip" in the near half of the public circulation. "We've also looked at who revealed the news," Archie an in-house employee told the business value reporter, "The final result is likely to be an investor at the same time investing in PPS and PPLive," which, after the PPS has been released, will help raise the pplive.

The combination of PPS and Archie Art is not only a matter of industry change, Baidu is a big company "industrial Capital" of the depth of participation, but also reflects the important role that investors occupy.

For the entire Chinese internet, May 2013 will eventually occupy an important position in history, pps and Archie Art is only a microcosm. This month, a series of mergers and acquisitions have erupted, like a billiard ball, with each ball running fast, colliding and causing a ripple effect.

And one of the first to take the ball rod mercilessly swing, is Alibaba.

Barbarians

Just the past May, what happened to China's internet circle is known to all.

Known as Ali investment strategy three mountains: Sina Weibo, high-gold map, UCweb, two have been successfully climbed. Another UC, also by many people familiar with the matter, "has been set to be announced only." And whether it is the MO, friends, quick Taxi, Tintin concessions, Ali to acquire rapid card position strategy is the wind and the downwind. According to relevant sources, Ali target list in the next smooth progress is "pea pod."

The alliances will undoubtedly become a strong one in China's internet history. And one of the biggest catalysts is Ali. No one can fully see how Ali's incorporation, including themselves, is an anomaly in the normal business world, but it happened six months earlier than we expected.

Not everyone else is unaware of this, but if there is no Ali's killing, the Internet's mergers and acquisitions may be dragging their own bargains. Within a few months, Ali quickly announced a new trench, the impact of radiation is very wide. A lot of people ask, why Ali?

Ali wants to go public. The current business is so, and the capital market undoubtedly needs "space" and "story", Ali has been building an e-commerce ecosystem, has been said too much. And who has the resources and the ability to control the more peripheral ecological chain, who has more possibilities for future extension, in order to continue to add points in the capital market.

Of course, there are also speculation from Ma Yun's "retirement." Although Mr Ma has resigned as CEO of Alibaba, he retains the position of Chairman of the board. But whether really as he said in Taobao 10 years: "I will not return to return," at least from Ma Yun before leaving the heavy steps and noncommittal. "Anyway, it's going to be back, moat in this, strategically stuck around the core business." Resources in my hands, Ma Yun, the future can still play chess. One industry insider speculated.

In contrast, the more important factor is undoubtedly the mobile Internet card position and remedial classes. Remember 2012 years, Li also said at the Baidu Federation conference "Mobile Internet stimulation but very dangerous", an instant year, 360 in Bat (Baidu, Ali, Tencent) to kill a gap, we are desperately to seize the flow of the entrance; Many VC also adjust the investment strategy Division, Investors looking at PCs and watching mobile split the restructuring by industry division.

In fact, whether it is bat or 360, these traditional internet enormous power, have a sense and thinking: the Internet and mobile Internet development for 3 years, several major giants, in addition to Tencent has grown a micro-letter, no one can be said to have innovative and successful products. And this upheaval, it is from the Internet Enterprise collective reflection of self-awareness.

This is a "fraternity" that began in the 2012. It's time to sum up the stages.

Just like the "possibility" between Gould and Baidu has been talking for more than half a year, in Baidu to strengthen their own map market investment, Gould actually realized that he has no chance to become a big platform, the face of Baidu almost dead, and Sina Weibo is not coveted can become a challenge bat platform, But to become a profitable business first; UC before 1.5 in the United States after a circle, found that the time to go on the market is still early, but today the valuation of the capital market to make a discount seems to be a good choice; Of course, there are unanswered Sogou.

The logic behind this process is that big companies need "self-awareness", and small and medium-sized companies are more "value-recognition", simply, "What I lack" and "who I Need", both are looking for cooperation. This is why such intensive mergers and acquisitions and structural changes can occur.

"None of this matters" about how Ali would use the companies that were voted and bought, said one investor who recently took part in the Ali takeover, saying that when the Giants felt that the world was not the same as their conscious world, they needed to make up lessons. And a lot of companies, the equivalent of the early queue for the Giants.

But there is no doubt that Ali Capital is very close to O2O and mobile Internet. In particular, the mobile Internet trial and error time is getting shorter, a lot of late to do "things" came faster. In the mobile strategy, facing the outside world recognized 4 mobile Internet portals: 91, UC, 360, Tencent, Ali attaches great importance to the part of the income bag. The O2O and localization strategy has also been a rush, but the media and community genes are lacking, "Ali has a voracious appetite for tools, portals, data, and communities they all want." ”

According to the "business value" reporter understand that the internal driving force-Ali Strategic Investment Department has also undergone some changes.

Ali Investment was previously known as Ali Capital, can be through business-to-business, Taobao and other important sectors to invest. Has been a placid cast a number of similar Amoy partners in the million-dollar level of small projects, in 2012 after Business-to-business, Ali Capital is integrated.

The external name unchanged, mainly divided into two lines: the group led by the CFO Tsai mainly look at the 2-3-year medium and short term projects, strategic investment means more, mainly mergers and acquisitions, recently also in the intensive look at a number of overseas projects, with financial director Shei led the group, mainly looking at 5 years of long-term projects, biased financial investment, to participate in the main.

Ma Yun is also often in it. "The above Personage says, several big project Ma Yun has participated in," More unexpectedly is, many very small case, Ma Yun all knows, for example quick taxi. ”

There is also a "legend" here. At that time, Jinsha invested in tick-Tock taxi, Ali cast a quick taxi. Jinshajiang Partners and Ali talked about, we open the market together, the following need words can be merged, Ali is still the eldest. But not Centia tick a taxi soon into the embrace of Tencent, so Ali now to help fast taxi beat opponents, "may not be so concerned about winning, but now have a home, it is not so simple." "According to the people familiar with the analysis.

Many people say, Ali now do, are Baidu should do, but apparently Ma's layout ability is stronger. With more and more power being incorporated, the pattern of bat is becoming more and more subtle.

And how to look at their own in the past 3 years, how to face the new value derived from the environment, each big company thinking and awareness of this is different. Tencent has been a frequent example of E-commerce 1 years ago, even though the shots were "still a bit late and logically wrong." ”

As an ecosystem that relies more on the evolution of E-commerce, Ali is obviously "most lacking" and "most ignorant" of the mobile internet, but it is precisely this situation and the accurate self-awareness that brings it greater horizons and bosom.

Capital Chamber of Secrets

Ma Yun met son in the bathroom 5 minutes to finalize an investment story is just a story. But history is sometimes changed by details, and many things you don't know.

Like the 2012 Youku potato case, in fact, has been the Three Kingdoms controversy, Archie Art is also talking. And the recent case of Ali, the most linear competitor is Baidu. UC and Baidu negotiations as early as 2012, a year of the final negotiations cracked, Baidu's bid is higher than Ali, but why are "not"? How can This "barbarian" succeed in successive shots?

The investment industry's evaluation of Ali's capital is very different from the past, "before all talk about people disappeared, it must be Ali internal no intention failed." Look at the current project, they are very close. ”

After a number of investors in the circle revealed and confirmed that Ali investment has been in these months, quickly formed a set of their own play.

Simple summary, that is, cash for VC shares, such as the two-year 2~3 times of return, according to IRR (internal rate of return) to calculate enough to VC, and then give the founder of money and stocks, the founder know in the inside may also be doubled, the heart is basically set.

"First to say, like UC so want to separate listing can talk about, can buy better." As long as the flow to Taobao, Ali's play is open, can not invest to borrow money also can-we Ali support you, good work. "In the investment circle, Ali's technical ability is not strong, but the strategic ability is very strong," said one industry renowned investor. They've been really tough lately. ”

In the mouth of many entrepreneurs, Ali is simple. "Sit down and tell you that Ali is the biggest company in the electricity business, but in the social and mobile power is not strong, I do not understand, you are very valuable to us, I am willing to pay, will give resources to cultivate you, intentions layout." ”

In contrast to the obvious is Baidu, in many projects, Baidu even bid higher than Ali 1.5 times times. "But Baidu always feel very cow, and live in Robin's Baidu world." The terms and posture of the major items are too cold, many small items, but also to see even the price has not been out. Now they're a little bit passive. ”

"You see the founders of some projects are less than 30 years old, I really can't think why they don't take Ali's money." "One investor revealed that Ali's negotiation cycle was very fast, and the shot was simply, regardless of the lesser interests." 3-4 months in parallel with these big and small projects, other companies simply cannot.

The final analysis is an accurate self-image and self-awareness. "Everybody is robbing the project, you can impress which people which link, whether to find each other appropriate appeal, you to these fragrant pastry's posture is what." An investor in the world is feeling this way.

Ali is a very interesting company, Taobao KPI is still in sales and are rising. So far, no one seems to be able to settled Ali how much money.

From the capital precipitation analysis: Taobao revenue, a huge amount of advertising, business Armored, Alipay, business-to-business business, third-party cooperation costs ... In addition to the big 8 billion-dollar bank loan signed in May and the leveraged effect of the corporate credit business itself, Ali spent 2 billion of dollars in a few months, a small number for the huge ecosystem.

The internet has a series of collision effect, behind the pushing hand also includes the capital, the management, the pattern and so on a set of industrial mechanics system. The investors in the market are not the active drivers behind the scenes, the founders. But many people are happy to see the pattern today.

In this wave of mergers and acquisitions, investors have several mindsets: the fund is about to expire, and six months within a year can not see the window, to sell to sell, who do not want to have a fault; such as not bullish on the market, in the case of priority liquidation, there is a good IRR to take the money to leave; for example, many investors want to make money, prove themselves.

"Whether it's a 1 billion project or the future is probably higher, the price of this wave of acquisitions is not outrageous, and every valuation is priced by the rest of the market," he said. "In the case of UC, the joint venture and Morningstar of UC, as well as the GGV and Nokia industry funds that follow, are all earning, the first round is probably 5~8 times," said one investor. Small projects like AU League, Innovation Workshop and Jingwei can make twice times also good, short time. ”

From the capital mechanics point of view, 5 years ago, bat, 360 are not big enough, if not 3 billion how to pry move 300 million of mergers and acquisitions? They couldn't afford it. "And in the United States, 3.5 billion, 1 billion of mergers and acquisitions every day, this is a very healthy channel." Now China is slowly beginning to feel this way. "This is a good time for VC," said one investor.

And for the first mention of PPS and pplive Common investor leaks, in fact, the person and PPS is not a direct investment relationship, nor one organization in the "investment" of the way to cast two companies. There are rumors in the industry that the gouging with the PPS shareholder is close to the "method". The power of the capital Circle has never been the same.

The constant collision is the action and reaction of the large industrial mechanics. So wildly enclosure Ali, is obviously to the internet big pattern has the dread. It is afraid of micro-letter unified world, and 360 on the mobile layout is also very positive. There is search, there is a browser, is vying for input method, in addition to no SNS. And the search and the electricity is to be present, just ability dissimilarity. Ali more dare not ignore Zhou for Sogou, take out 1/5 of the market capitalisation, such strategic assets can be seen its bridges.

As for the end will fall into whose home sogou, the outside rumor has not stopped, Sohu was forced to a more front position. "In the end, there is the possibility of change. A man close to Wang Xiaoquan said. As the most important influence, Charles Zhang will listen to Wang Xiaoquan's views to the fullest extent, but the final pattern is finalized or the choice of Charles Zhang.

There is no doubt that the internal Sohu has not too many sogou can use the resources, and Sohu future strategy and Sogou not too much relationship. Sohu Main Battlefield is the video, the battlefield is a search, a lot of people close to Sohu revealed that multi-party is still in the game, Charles Zhang 360 interest in the largest, become its first large shares and can change back to 400 million dollars of cash, take money to integrate other video sites, but also direct sniper Baidu, but Wang Xiaoquan more inclined to choose the culture and their closer to the company. Tencent temperament appropriate, but they want to do too much, and throughout the history, also did not see what Tencent has a large number of mergers and acquisitions.

If Zhang's view of the capital as a factor, the Wang Xiaoquan as a human factor, the result is more interesting. At present, the biggest advantage is that Sohu and 360 of the stock are sitting on the rise, own people happy.

Energy build-up

The role of capital in this wave of Chinese Internet-intensive capital acquisitions is to create a push between large and small internet companies alliances and to promote real events, but ultimately it relies on the energy and pent-up demand that companies have accumulated over the past few years.

BAT, the 3 companies that make up the spire of China's Internet pyramid, have more or less encountered problems in the past 3 years of the mobile internet outbreak.

The previous article said Ali, E-commerce growth is very fast and built on the basis of their own soil ecosystem, but has been biased in the electricity quotient of this vertical system, in addition to either the Amoy lakes such as social products, or Aliyun OS and other mobile internet projects, the progress is not ideal.

Tencent, as a "grounding gas" company, products for the king, on the mobile internet grew up micro-letter this new national product, but in addition, its mobile channels on the "Application of Treasure" by 360 and 91, can only be ranked 3rd, mobile phone QQ, the real platform based product development also experienced bumpy. Although there are some game entertainment related to mobile investment, but this does not allow it to form a platform pattern. Compared with the PC era, its influence in the mobile era is relatively weakened, after 3 years of exploration still has no clear direction.

The bigger problem is Baidu. After Google's exit from China, Baidu's share price soared, especially the stock "one point 10" and successive years of gorgeous earnings, so that it stood at 50 billion U.S. dollar market value of the high. But when the positive out, the question of the capital market began to produce and more and more strong, especially in the mobile era is not seen as a strong entrance, Baidu's core growth capacity bottleneck fade. Plus Baidu once to "invest" as the reason for refinancing, can be like a case of UC but only thunder rain, making the pressure more and more.

Compared with them, Sina, Gould and other companies in the two or three line also have problems. Sina Weibo's success since 2009, Sina's share price rose three or four times times, can gradually everyone found that Weibo is constantly looting everyone originally read Sina news time, but also in the plundering of traditional portal content, but there is no real operation of the business model. Coupled with a variety of new product power is not obvious, this "lame walk" to the 2013, Sina Weibo has had to give everyone an account, otherwise even their own sustainable development will be seriously affected.

As a traditional map navigation provider, with the Internet and even platform as the concept of a lot of people, especially the investment analysts in Hong Kong, but it after 3 years, a more and more exposed problems and Sina Weibo similar: How to prove themselves? When it's Internet strategy--with a map as an entrance, it's getting harder to prove, If it does not find reinforcements at this time, I am afraid it will have to shrink back to the enterprise-class service market.

Coupled with the already not satisfied with the flow of only 360 of the business, staring at all can make their way to a greater flow of access and stronger mobile internet influence direction, such a river, has been on the eve of change.

Why these big and small companies, invariably came to the eve of the change of the checkpoint?

The first is the disappearance of the demographic dividend. Whether it is Alibaba investment Sina Weibo, 360 for the suspicion of Sogou, or Archie Art and PPS merger, which involves not only a few billion or even over 1 billion dollars of capital, there are billions of users. If you say that in the 2009 China Internet, there are many new product opportunities, new user cakes for these companies to eat, to 2013 years, in fact, all vertical industry products have basically covered most of China's internet users, the so-called expansion of new users, they have to snatch from the teeth of competitors.

The most obvious is the video industry, which is also true in the "browser-search" market, an increasingly explicit option when users get more and more expensive and gain ground-breaking user growth in the form of capital.

Second, big corporate innovation slows. For example, Baidu, with the search market mature, has been very much like a mature company; Alibaba will be on the electricity business again "Think Big", I am afraid too reluctant; Tencent after the restructuring of the organization slightly better, but its management model is still mature, innovative way also depends on the Internet as a whole innovation environment, in addition to the micro-letter this special case, There have been few exciting places in recent years. This is normal, because innovation tends to occur when a company is just born and is in a fast-growing period, and as companies move toward the peak of their life cycle, the decay of innovation cannot be avoided.

The increase in competition threshold and the desire for investors who have hatched hundreds of billions of products have become the cause of change at the corporate level, as well as in the larger foundation level.

When the energy accumulation, the potential energy continues to increase, such a ball bureau, Alibaba suddenly swing, a few balls out, will naturally lead to potential energy into kinetic energy, resulting in a chain effect.

Whether or not it is currently finalized, Ali invests in Sina Weibo, seizes social media and mobile Internet traffic entrance, intangible value-added Sogou, promote 360, Baidu and Tencent thinking flow and users and improve the quote; Ali Investment 91 rumors, in the mobile channel has enhanced the latter three's sense of urgency; Ali investment in Gold, The direct competitor is the Baidu map, which will be the pressure of the acquisition of Baidu further push higher, the acquisition of PPS for Baidu will have to promote; when PPS and Archie Art merger, video industry and the combination of Sohu video pressure; Sohu's pressure makes it start to consider whether to end the Sogou, to the Sogou to the coveted people ...

Alibaba's swing has another layer of meaning. In fact, whether it is UC, gold or PPS companies, in the last year has launched the investment negotiations, but Baidu, Tencent and other large companies to their value recognition, and their own value identity has a big deviation. It's like a different big company scoring for a two or three-line company that suits acquisitions or mergers, and eventually Alibaba stands up and gives the highest score.

So, ultimately, it has the effect of allowing companies to rethink their self-identity and others ' identity. Beyond the actual relevance, big companies may be more likely to think: Should I really make a higher price and promote this to happen quickly?

Interestingly, if UC and Baidu that talk but did not talk about the matter, put in the 2013 present scene, may not be the same as last year's results. This is the time.

The oligarch and the Broken Bureau

If the end of 20th century, the emergence of the internet in China and the development of a new continent has been found, then now, the mainland has been in the relatively free market competition, has decided a lot of winners and losers, several large companies grow up, occupy the most vast plains.

The video is one of the most obvious examples, from 2005 hundreds of flocked to scramble for users, to the capital promotion continued, poured out a batch of transformation, when almost all Internet users become video users, only less than 10 players in the market. The cake becomes smaller, the threshold becomes high, the profitability becomes strong, the gifted cool potato, the Archie Art PPS, the player who has left has started the powerful merger and acquisition until the oligarch appears.

History does not choose a company, but history chooses an industry. As long as there is a prospect, under free competition, the inevitable result of a period of rapid growth is oligopoly.

From the industry point of view, the Internet has the most gold content of the business is nothing more than 4 kinds: to Baidu, 360, Sogou, such as the representative of the search (traffic), Alibaba, Beijing-east and other representative of E-commerce, Sina, Sohu and other representatives of the media (content), Tencent and other representatives of social (user relations). When there are only a handful of players in the Internet base business, the oligopoly will come sooner if there is no mobile internet.

Mobile Internet is the second new continent, it allows the players to find another opportunity, so that the influence of large companies are weakened, whether Tencent, Alibaba or Baidu.

But does such a new opportunity really exist?

The Chinese Internet collision effect caused by Alibaba swing, let this sentence from interrogative sentence, become a rhetorical question sentence.

Mobile Internet so far, there is no search, electric business, media and social such a clear classification. Instead, it could be disruptive to the traditional Internet-based business.

Specifically, the search engine is losing the advantage of the strongest traffic entry, the new portal is ubiquitous, possibly voice, browser, or a social tool like micro-mail with media attributes, and the electrical quotient is further layered, because of the portable, the way users touch the goods is not just looking, but also browsing and recommending, And the final thing on which platform to buy, perhaps no longer important, the media is in a drastic change, after experiencing traditional media, portals, UGC, it may be in the mobile social behavior, but also may be replaced by the new multiple Terminal Services; Finally, social, When the Address book brings more intensity from the virtual weak to the real strong relationship substitution, when the future wearable device can also become everyone's real ID and social scene, it will also face a more complete subversion.

So, in the future, how to search, how to electric business, how to consume information, how to socialize, in fact, today are not sure. The only certainty is that it does not just mean danger to former oligarchs, but also opportunity--a chance to leap from one's own turf to another.

The emergence of continuous mergers and acquisitions is a summary of the Internet in China over the past 3 years, with the development of mobile Internet as the background, while big companies are swallowed for the 3-year-old companies, but in fact they pay for the future possibility of a clear and mobile internet.

It will make the mobile internet era of oligopoly, faster and more violent than the traditional internet era.

The world of oligarchs looks like nothing. They offer a variety of services that meet the needs of a variety of users, who run increasingly sophisticated business models and are increasingly driven by inertia.

May 7, 2013 7 o'clock in the afternoon, Archie Arts and PPS merger Seminar is about to end, gong will not drink a few of the mineral water back to the ground, silently doing the preparation to leave.

"If the video site to the end of only two or three players, we firmly eat the market, mature to make money, everything is in an orderly manner ... Wouldn't this world be boring? "Business value" reporter asked.

"It may be so, but a long time must be divided, long time will be combined." Gong thought, rubbing his eyebrows with his right hand, and saying, "but this is only temporary." We are in a very fast-changing world, just like 5 years ago, no one can see how many people use mobile phones, pad watching video today, in the next few years, exactly what kind of way, what kind of terminals to consume video content, no one knows. Any new way and new terminals, in fact, means that user habits change and migration, means new opportunities and new players to enter; perhaps unknowingly, they have overturned everything, redefining the rules. ”

Gong's words, in fact, conceal the key to the oligarch era. The bat "big pot" that is now seen is actually the result of the development of history to a certain stage, free choice and elimination, but it is only a stage. The real outbreak of mobile internet is the beginning, the Internet by the more mobile hardware and the traditional business community links to the service model, the world's profound transformation has just begun the curtain.

The May China Internet collision effect, in various companies under the change of self-awareness, come particularly fierce, the impact will be particularly far-reaching, but it is the formation of the future pattern, is still only a small area under the Internet big change. For the future, this will only make it possible for big companies to get tickets to the path to a longer life, and perhaps the real subversive is hidden in the shadow of today's Internet uproar.