Chapter 328 Li Yanhong's Letter

[According to Cailianshe’s morning news on May 5, Tencent announced that its wholly-owned subsidiary Weiying Times intends to acquire the online ticketing business assets of Dianping and Ele.me, both subsidiaries of the New Danghang Group, and the online ticketing distribution channels of Wanda Cinemas.]

【Qingke Venture Capital: New DAE announced the divestiture of its online ticketing business and the merger and reorganization with Tencent Weying Times, and strategically raised $11 million at a valuation of $3 billion, led by Grapefruit Capital and Xiaoma Pentium Media Company! 】

[Sina Finance: Can the 600 billion movie business support the unicorn with a valuation of billion that suddenly appeared? In real estate and agricultural breeding, the young masters of the two major groups, Wanda and Yunshan, have once again joined forces to cross over into the entertainment industry. ]

Early in the morning, the financial news pages were in turmoil.

Cailianshe, with a serious brand tone, emphasizes professionalism and precision, focusing on the merger and reorganization operations themselves; Qingke Venture Capital focuses on strategic investment and financing, outlining the struggle between industry camps behind the transactions.

Sina Finance, a popular science website, simply and crudely used the most straightforward and general data comparison to imply that this transaction was a hobby of the rich second generation rather than an objective and rational business behavior.

But no matter how the media inside and outside the industry report from various angles, the core cannot be avoided - this is a merger and acquisition case full of surprises!
"How much did Enlight Media spend to acquire 57% of Maoyan's equity? The total cash and cash equivalents are only 26 billion!"

The burly man sitting by the pool threw down his phone and said, "After the acquisition, Maoyan's total valuation is 60 billion. Why is Weiying Times, whose market share is almost the same, worth 100 billion?"

"This should be the first time that Tencent has given up actual control of its subsidiary. It is worth it for New DAE to spend more money," said Chen Qing, vice president of Baidu Takeout.

Gong Zhenbing, the president of Baidu Takeout, who had a stern face, cursed in disbelief: "It's unreasonable, they are all fucking crazy!"

"The Glutinous Rice Division is in trouble." Chen Qing folded his arms with his face serious.

Gong Zhenbing did not comment. He grabbed a towel and wiped the water off his face. Without saying a word, he jumped into the water, splashing waves and continuing his morning swimming exercise with his broad body, looking like a general.

But it also looked like a microcosm of the entire Baidu Group today. Chen Qing stood by the swimming pool and watched silently, a thought flashing through his mind for no reason.

Although they seem to be actively seeking a healthy and high-quality living state, they are actually bloated, fat, and slow to react, with an outward appearance but a rotten interior.

Tencent’s mobile payment + social traffic entrance, New DAEI’s money-burning, Wanda’s theater distribution channels, plus Pony.com’s film and television production capabilities.

It can be foreseen that it doesn’t matter if the 600 billion movie business cannot bear the billion valuation in the new micro-film era, the related upstream and downstream markets can bear it.

Ever since Li Ming's death and involvement in political and business troubles, the entertainment industry and venture capital industry all believed that Pony.com was going to collapse, and subsequent developments did turn out to be true.

His wife and sisters were struggling for power internally, and investors were eyeing them covetously. As a result, Grapefruit Capital inexplicably entered the game, quickly suppressed the unrest, and stabilized its position with two movies, "Lost in Thailand" and "Fleeting Time", and a TV series "Where the Wind Is".

Even a project like "The Crossing" that would cause ordinary second-tier media companies to lose money did not shake its foundation.

Pony.com is still the dark horse it was when Li Ming was alive. In this way, when it successfully goes public and raises funds, the camp formed around Microfilm Era will have stable supply-side film and television production capabilities on the one hand, and Wanda Cinemas' distribution and derivative peripheral market sales channels on the other.

The same is true for Meituan Maoyan, which is tied to the listed leader Light Media. Just half a month later, the two companies quickly and fiercely brought the battle of camps in the local life service field into in-depth competition in the general literary field.

However, Baidu Nuomi is still spinning in circles, at a loss as to whether or how to follow up.

[Tencent 30%, New DAEON 30%, Wanda Cinemas 20%, Grapefruit Capital and Pony.com and other investors 20%. This is a rough estimate, not accurate.]

The cell phone vibrated as a notification sound came. Chen Qing quickly looked up the approximate equity structure of the new Microfilm Era, then deleted the text message and fell into a new round of contemplation.

This is the first time that Tencent has really given up the actual control of its subsidiaries. From absolute control of China Literature Group to relative control of Weying Era today, the intensity of open cooperation has become increasingly stronger.

"We can't rely on the glutinous rice division anymore. We have to find a way to save ourselves."

Gong Zhenbing finally climbed out of the swimming pool and said bitterly: "New DAE and Meituan are both fully open to introducing strategic cooperation, so we should do the same."

"I wrote an application report to Mr. Li, asking Baidu Takeout Division to be separated from the group and introduce external strategic investment in the form of a subsidiary." He was anxious and irritable and shook off the water stains on his body, splashing them everywhere.

Chen Qing lowered his head and raised his hand to wipe off the water droplets that splashed on the corner of his clothes: "Should we ask someone to find out the attitude of the group's top management first?"

"Time does not allow. If we delay any further, we will surely die."

Gong Zhenbing hesitated for a moment before complaining bluntly: "The group has never had any patience with us from the beginning to the end. The Nuomi Division has given us people and money when we need them. We have survived to this day entirely on our own."

Chen Qing didn't know how to respond and could only listen silently. Initially, the group planned to get off to a quick start by acquiring an external food delivery platform, but the financial investment department ended up finding a bunch of junk projects on the market.

Gong Zhenbing seized the opportunity to persuade the senior management to start a food delivery business from scratch within the group.

Therefore, the group's strategic focus throughout last year shifted to the Nuomi group buying division. Fortunately, New DAE and Meituan were busy with internal integration and had no time to fight each other, so they got a rare six-month development period.

During the Chinese New Year, Gong Zhenbing felt good about himself and was unwilling to be lonely. He tried to take advantage of the Spring Festival marketing plan of Xindashi and Meituan by buying tickets for delivery riders to return home and paying for their travel expenses, which was a reverse emotional marketing campaign.

It was a failure. During the Spring Festival holiday, Baidu Takeout was left behind by New Dang E and Meituan. At the end of the year, Baidu Takeout still had 11.2% of the market share, but after the Spring Festival holiday, it was only 4.7%.

Gong Zhenbing was so anxious that he could only stare blankly as merchants on the platform left and riders jumped ship. The group's top executives simply turned a blind eye and were too lazy to even look at this unfortunate project.

The situation was so tense that in March, Meituan reignited the battle for the food delivery business. He gritted his teeth and took out the entire budget for the year, deciding to take the initiative to participate in the war again, at least to make some noise and attract the attention of the top management. However, the noise was too loud and the top management could not cover it up. It was reported directly to the top management, and Mr. Li was alerted. He directly ordered the Nuomi business unit to start the battle in the group purchase market, and did not take Baidu Takeaway, which only accounted for 4% of the market share, seriously at all.

At this moment, the Nuomi business unit was in a difficult situation. Two proactive attacks brought a stain on his entire career. Gong Zhenbing was heartbroken and the more he complained, the more excited he became.

"If you gave us half of the funds of the Nuomi Division, it would never have turned out like this!" He quickly wiped his body, put on his clothes, rushed into the villa, and wrote an email with his computer.

The brothers have been working hard for two months and they still have to work overtime during the May Day holiday. It is really hard. We squeezed out some activity funds to hold a few days of meetings in a resort hotel in the suburbs of Beijing to reward them and comfort them.

The only drawback is that the quality of the private butler service in the presidential suite of this resort hotel is not up to par, and guests are even required to connect to the wireless network themselves.

Hearing this, Chen Qing couldn't help but purse his lips and try to keep a straight expression.

At the end of last year, the market was stable and the takeout business unit was developing at a good speed. In fact, there was some funds on the books. Gong Zhenbing decided to spend money suddenly to build a central kitchen and other upstream and downstream takeout industry chains.

More than a dozen trademarks were registered at one time, the most perverted one of which was called "Gongda Night Snack".

Gong Da, Gong Lao Da, is the nickname given to him by his colleagues within Baidu Takeout.

Then, during the Chinese New Year period, there will be no money to make up for the black hole caused by wrong marketing decisions.

If he really got half of Baidu Nuomi's funds, Chen Qing couldn't bear to think about it and shook his head. He secretly made up his mind to consider his personal future.

[We agree with the plan to establish an independent subsidiary for the food delivery business unit. If we really can’t compete with Meituan and New DAE, we won’t do it. We must make the necessary decisions.]

In the early hours of that evening, Robin Li briefly replied to Gong Zhenbing's email and copied it to all senior executives.

"Sure enough, it's not just us. President Li has no patience with the Glutinous Rice Division either."

Gong Zhenbing carefully pondered Mr. Li's tongue-twister-like "handwritten instruction", which translated into human language means that if we really can't beat Meituan and New DAE, then we will change direction and give up the entire local life service field.

I won’t play with you guys anymore, we at Baidu have new adjustments in our strategic planning!
"This is a challenge and pressure for us, but it is also an opportunity. We will be the masters of our own destiny in the future!"

He got up from the bed with great energy, put on his pajamas, sat at his desk, and spoke passionately to the online conference call: "Make an external financing plan immediately, with a financing amount of 3-5 million US dollars... Don't worry about whether we can raise this money, we must show an attitude of competing to the end and ask other departments to help write a few reports..."

…………

[Don’t ask me boring questions about the market share of Baidu Takeaway platform anymore. Do you think Baidu Takeaway is interested in making money from takeaway? We don’t care! We don’t just want to do food delivery. In the future, our focus will be on local delivery. Although competitors are good, we don’t want them.]

The next morning, Xie Jingxing walked out of the airport quickly and took a car to downtown Beijing. On the way, he looked through the latest news compiled by Song Anli. One of the posts marked as a post from the person in charge of Baidu Takeout made him almost laugh out loud.

"Baidu does intra-city delivery, so what does the Yunhe Logistics Crowdsourcing Division do?"

He found it difficult to understand and was full of doubts. It was fine if the executives of Baidu could always come up with some cool ideas, but how did the people under them fully cooperate to come up with new ideas?

Zhang Tao, who was riding in the same car, frowned and thought: "It should be for fundraising, to tell investors the story of differentiated competition."

"The food delivery business has been separated into a subsidiary and has initiated external financing of US$3-5 million."

Xie Jing Xing restrained his relaxed attitude and concluded: "Anyone who is willing to pay this money is a fool among all the investors in the market, and even if someone is willing to be a fool, it will not affect us."

"The key is that if Robin Li really loses patience with the local life service sector, Baidu Nuomi's group buying business is a large high-quality asset."

No matter how much the probability of a merger between Baidu and Meituan is calculated, the only thing that was not expected was that Robin Li, who announced a 200 billion investment in local life services last year, lost his patience a year later and launched the food delivery business independently and introduced external financing.

"No matter what, Baidu will not sell off Nuomi Internet Cafe too quickly," Zhang Tao expressed the opposite opinion.

But who would have thought that Mr. Li would not want to play so soon? Xie Jingxing was not sure, but only revealed indirectly: "As far as I know, Baidu intends to invite Lu Qi who works at Microsoft to join and focus on the field of artificial intelligence."

Zhang Tao was unable to refute it for the moment. Baidu's strategy kept changing and there were too many uncertainties. It would be easy to be slapped in the face if one made a hasty judgment.

The two of them walked silently all the way to the office address of the urban industrial and commercial department, got out of the car, straightened their clothes, and walked up the stairs into the office building.

"Mr. Wang."

Halfway through the walk, Xie Jingxing saw Wang Xing walking beside him, surrounded by many entourages. He slowed down and greeted him.

"Mr. Zhang, Mr. Xie, nice to meet you." Wang Xing nodded and walked straight into the office building without stopping.

"People from Baidu are coming too, right?" Xie Jingxing asked disapprovingly.

Song Anli responded softly: "It should be led by Zeng Liang, general manager of Baidu Nuomi."

(End of this chapter)