There was a joke circulating on the internet in the future. It was about an old granny who went to the market to buy tomatoes. She picked three and the stall owner weighed them and said, "One and a half catties, $3.70."
The old granny said, "I'm just making soup. I don't need that much." Then, she removed the largest tomato. The stall owner quickly looked at the scale and said, "One catty, two taels, three dollars."
Just when everyone thought that the old granny was going to be scammed by the profiteer, the old granny calmly took out 70 cents, picked up the largest tomato that she had removed, and walked away.
Three was $3.70. After one was removed, the remaining two were $3. There was nothing wrong with the 70 cents that was deducted from $3.70. The stall owner could only swallow his loss.
Although it was a joke, it was a good representation of the game between a company and a venture capitalist when it came to financing.
The current Makino Technology was like those few tomatoes, except that there were big and small, green and red.
YY was definitely the biggest, most popular, and best of the few tomatoes. Therefore, it would definitely be the most delicious. The Tieba might not be too big or too small, but Happy Farm was probably the one that was both small and green.
Although there was a profit, it was not significant compared to a real client-side game. The venture capitalists were looking at YY's comprehensive potential in the field of instant messaging and future social networking. Therefore, Happy Farm was really nothing compared to this big framework.
Li Mu had also guessed the value judgment of the venture capitalists. Therefore, he wanted to talk to the venture capitalists after breaking it down. It was fine if the venture capitalists were not optimistic about Tieba and Happy Farm. The more pessimistic they were, the better it would be for him. For example, Sequoia was valued at 13 billion for Makino Technology. If it was valued at 12 billion for YY, Li Mu would wake up laughing even in his dreams.
This was because Li Mu knew that the scale of Tieba's products and the future development prospects of the ecosystem would be worth at least tens or even tens of billions. If it were to incubate Weibo in a few years, it would be worth at least tens of billions of USD.
As for Happy Farm, Li Mu did not expect it to make a lot of money. That was because its core mission was not to make money, but to build a cannon for YY's overseas development. However, apart from that, Happy Farm had another special attribute.
Unsurprisingly, it would be his first client-side game, which would also be the first product of the future games division. However, the games division was still in a state where they did not even have a single game. If they were to join in the financing, venture capitalists would not give them a high valuation at all. At most, they would give them a valuation of a team and a bonus from the platform. However, Li Mu knew very well in his heart that the client-side game business would be the most important in the future of the internet. If he were to talk to venture capitalists at an extremely insignificant price, he would really suffer a huge loss.
What Li Mu wants to do is to optimize and upgrade the old grandma's method. As the seller, he will first understand the price of each tomato in the eyes of the buyer and then take out the one that the buyer doesn't like. You don't like it, right? It just so happens that I don't really want to sell it. I'll take it out and we can talk about the rest.
The others in Makino Technology understood Li Mu's thoughts. Naturally, they had no objections to splitting the company to talk about financing. However, what they were more concerned about was that once Makino Technology was split into two or three companies and one of the companies received financing, how would they smoothly use the money on the overall operations of the three companies in the future?
If Happy Farm was split, then when YY went global in the future, a large portion of the capital invested in Makino Technology would be used to promote Happy Farm. The investors would definitely go crazy.
However, Li Mu did not think that this was a problem at all. He said calmly to everyone, "The reason why you are worried that the investors will object to us using the money on companies that have nothing to do with them is because you all treat the capital too much like a human being. The premise of us wanting the capital money is that the capital cannot interfere with our decisions and operations. If they can't do that, we won't agree to any financing terms, no matter how good they are."
As he said that, Li Mu continued, "We are a mature, large-scale Internet company, not a start-up. The VCs don't need to worry about our product model, profit margin, and development prospects. Under these circumstances, they are fighting to invest in us because they want our shares. After getting the shares, when we need them, they will help us; when we don't need them, they will just shut up and keep their distance. They can just be a silent shareholder."
Kong Lingyu agreed and said, "I think so too. Even if we use the money from the VCs to promote Happy Farm overseas in the future, the one who will benefit in the end will still be YY. After all, once our YY opens up in the overseas market, YY's valuation will be limitless."
Ding Zhenglin asked Li Mu, "Li Zong, if we split it up, what's your psychological valuation for each of our sectors?"
Li Mu thought for a while and said, "YY 15 billion, Tieba 5 billion, Happy Farm 2 billion."
The few of them were shocked by Li Mu. Based on this calculation, Li Mu's expectations for Makino Technology was 22 billion! Even if it was 7 billion higher than the current highest bidder, Softbank …
Lin Ching-ah was the first to see through Li Mu's intentions. She smiled and said, "Li Zong, I think you're thinking of using Tieba and Happy Farm to raise YY's valuation to 15 billion to raise funds, right?"
Li Mu laughed and snapped his fingers. "Qingya, you know me the best."
After saying that, Li Mu continued, "Tieba has traffic and users, but there are currently no good ways to monetize it other than through advertising. Therefore, I believe that the investors themselves will not be very optimistic about Tieba. Happy Farm's game mode is relatively gentle, and it's not as intense as games like Miracle and Legend of Mir. Moreover, the game itself is free, so the profit margin is naturally lower than paid games. Similarly, the investors will definitely not be very optimistic about it. And if we sell our shares to raise funds, to put it bluntly, it's like selling something. If the buyer doesn't approve of something and offers a low price, then why should we sell it? "
Ding Zhenglin nodded. "Then I'll talk to Sequoia and Softbank in detail based on YY's valuation of 15 billion."
"Okay." Li Mu said, "If the negotiations are successful, we'll split Tieba and register a separate Makino Culture. We'll split Happy Farm and the game development team and register a separate Makino Entertainment. The shareholding structure of these two companies will be exactly the same as our current shareholding structure. The shareholders and shareholding ratio will remain the same, but after the split, the two companies will operate and raise funds independently in the future.
"This way, in the future, we'll be able to attack and defend. If we attack, we'll find a way to let the two companies split off be listed independently. If we defend, we can also use Makino Technology to merge these two companies back through capital operations. This way, not only can we strengthen the strength of the entire Makino Technology, but we can also avoid the C series financing from being taken advantage of by venture capital investors. When the time comes, if these two companies that don't have shares in them want to merge, they will have to pay an additional price. They will either dilute part of their shares or take out money to make up for the difference. "
Li Mu's offensive and defensive plans were approved by everyone. Everyone also understood that at the moment, Tieba and the game business were worthless in the eyes of outsiders, but in the eyes of their own people, they had great potential for development.
At present, the core team of Makino Technology still did not know Li Mu's future plans for Weibo. They only knew that the next incubation task for Tieba was a blog, and that the blog was already in development and would be developed soon.
Although some people had tried to create a blog before, because there was not enough traffic, no strong platform appeal, and no well-known media entities, those people could not make a blog. But now, there was a large amount of high-quality content in Tieba and a large number of celebrities. Once they were converted to a blog, it could create a large number of media that received a lot of attention. It could be said that Tieba had cultivated an absolutely fertile soil for a blog. As long as a blog was released, it would definitely become popular.
In fact, in Li Mu's view, whether it was a blog or Weibo, these two products faced a huge problem in the development process: they were good but not popular. To put it bluntly, there was no good cash flow model. Large traffic, big reputation, but he did not know how to make money.
A portal with more than one million daily unique visitors, if it only relied on selling advertisements, it would be amazing to earn tens of millions of dollars a year. For example, before he acquired Hao123; but if it was an e-commerce website with more than one million daily unique visitors in Japan, its annual revenue could easily reach tens of billions. The real difference between the two was the cash flow model.
However, this was not a problem for Li Mu, because Li Mu had already prepared an excellent cash flow channel for the blog and future Weibo — Taobao.
After the development of Weibo in the future for a certain period of time, it began to develop in the direction of new media e-commerce. If it was not for the emergence of WeChat Moments, tens of millions of "WeChat Business Army" would definitely take root on Weibo.
Li Mu did not want to create a "WeChat Business Army," but new media e-commerce was a very effective development direction. Once the blog became popular, it would definitely gather a large number of users. He would find a way to guide these users to Taobao to spend. This was the most important thing for the future cash flow of the blog.
In other words, Li Mu had basically decided to give all the advertising to Taobao in the future. The cash flow model of e-commerce was direct, and the conversion rate was high. It was much more effective than other Internet advertising.
Moreover, the blog itself was a new type of self-media. A small number of users created high-quality content, and a large number of people paid attention to and digested high-quality content. In this case, the blog could guide a group of people who were good at making content or influential people to directly try content e-commerce.
For example: Let a well-known makeup artist open a blog to explain makeup while recommending cosmetics and makeup tools from Taobao's cooperative companies. While her audience learned, they could directly have a desire to buy the products she recommended through her guidance. The links attached to the blog could directly let these fans jump to Taobao to complete the purchase.
For example: Let a well-known fashion magazine open a blog to regularly recommend the clothing combinations of various cooperative companies. If users are interested in a certain piece of clothing, they can also directly buy it on Taobao with a click.
Taobao shop owners could promote their products on the blog, and well-known bloggers could also open a shop on Taobao. In short, completely connecting these two links, the resources on both sides could achieve interoperability and mutual conversion, promote each other, and develop together.
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