Top of the Great Era

Chapter 2302 New concept of mergers and acquisitions

Mattrick said with a smile: "Games are a creative industry. In order to prevent the convergence of ideas, we should maintain the independence of many competing game studios. This is not only a long-term consideration, but also more in line with our current developments."

Zhou Buqi smiled and said, "Isn't it easier to acquire?"

"That's right," Mattrick said frankly.

For games like "Clash of Clans", although the official version has not been released yet, the beta version has achieved relatively good results, especially the excellent reputation.

This means that after the official version of the game is launched, there is a high probability of success.

Changyou is expected to spend $1000 million to acquire Supercell, the studio behind the game.

But once this game is successful, the future revenue will not be $1000 million, it may be $1 million, it may be $10 billion.Maybe it will become popular all over the world, becoming one of the most popular mobile games, and the value may reach 100 billion US dollars.

However, there is a hidden factor here, and that is risk.

That's how it worked.

If it fails, the entrepreneurial team will not even be able to get 1000 million US dollars, and the initial investment will be lost at that time, so it will really be nothing.

Those with bare feet are not afraid of wearing shoes.

Fearless.

But someone came to deliver shoes, who wants to run around with bare feet?Once you wear your shoes, you start to worry about risks.

This is the advantage of large companies to acquire startups.

Big companies can easily take the risk of a game failing, which means losing $1000 million in investment.Start-up companies can't do it, they can't even bear the loss of hundreds of thousands of dollars invested in the early stage.

Therefore, for many start-up companies, being merged and acquired by a large company is also one of the three roads to success for start-up companies.

But there is another hidden danger here.

For the entrepreneurial team, this company is created by their hard work, just like their children.Even if they sell the company, they still hope to keep their children in their own hands.

That's where there is disagreement.

In the mergers and acquisitions industry of enterprises, acquisitions are often the easiest.

What is difficult is the restructuring after mergers and acquisitions.

In the reorganization process, the most difficult hurdle to overcome is "people".

For example, the entrepreneurial team of Supercell, they are used to making their own decisions in Supercell. Once they are merged into Changyou, they will listen to Changyou's command.

This will often lead to differences in ideas.

Many times, the entrepreneurial team will listen to the tune and not listen to the announcement.

As time goes by, conflicts will intensify.

For example, when Google acquired YouTube, it was admired by the world...But behind the merger and acquisition, it was bloody. Google wanted to incorporate YouTube into its own system, and then gradually acquired almost all of YouTube's entrepreneurial teams. fired.

So does Yahoo.

After Ziweixing International acquired Yahoo, the first thing Zhou Buqi wanted to do was to fire a few vice presidents who held the executive power of Yahoo.

Large companies have such concerns.

Of course there are start-up companies, and they don't want to be fired, and they don't want to watch their hard-earned children be taken away by others.

As a result, large companies often encounter such obstacles when acquiring startups, and startups are unwilling to sell.

On the one hand, he felt that the company still had huge growth potential in the future, and it would be too much of a loss if he sold it now;

Especially the gaming industry.

This has happened to EA too many times.

Now that Changyou wants to acquire Supercell, their team will have such worries, which will greatly increase the difficulty of the acquisition.If you want to reach an agreement, you have to go through arduous negotiations and use all threats and lures.

This is not an isolated case.

Changyou will continue to acquire more mobile game startups in the future.

It would be too troublesome if they all adopted such a process.

If a new merger and acquisition strategy can be adopted, the potential future income of the other party can be preserved while reducing the current business risk; the future decision-making power and independent operation rights of the company can be preserved, and the resources and technological advantages possessed by the other party's large company can be obtained.

This works like a duck to water.

It's a matter of course.

It's so much easier to work with.

Don Mattrick invited Boss Zhou and Boss Zhang Er to come over. What he wanted to talk about was this matter. He wanted to completely change Changyou’s thinking about mergers and acquisitions. “There are two main purposes of mergers and acquisitions. One It is to complete the monopoly of the industry through acquisitions, thereby strengthening the influence of the industry... To put it bluntly, it is to gain power. The second is to find more profit growth points through acquisitions in order to obtain benefits."

Zhou Buqi agreed, "That's right, one is power and the other is capital."

Mattrick said: "Changyou is already the game company with the highest market value in the world. After completing the acquisition of take-two, the company's foundation has been very solid. We already have huge influence and authority in the game industry sex, our industry power is enough."

Zhang Chaoyang was very cautious, "That's enough. If the power is greater, the monopoly stick may be smashed down."

Mattrick glanced at Boss Zhou and found that he had no objection, so he said with a smile: "So we don't need to gain power through mergers and acquisitions anymore, we only need to obtain capital to develop more revenue growth points . Just look for more profits and create a higher share price.”

Zhou Buqi understood what he meant, nodded and said: "Well, so for the acquisition of those game studios that are starting a business, we can pay more attention to equity returns, but we can give up the voting rights to the entrepreneurial team."

Mattrick was very happy, "Yes, that's what it means!"

Zhou Buqi said: "I think it will work!"

Mattrick couldn't hide his excitement, "You agreed?"

Zhou Buqi said: "Giving the company's voting rights to the entrepreneurial team can make the entrepreneurial team have no worries about the future, and don't have to worry about the risk of killing the donkey in the future. At the same time, it can also ensure the independence of the company. The hidden danger of creative convergence in Changyou.”

In fact, there is no need for Mattrick to say this at all.

As an Internet entrepreneur who came from China, he really understands the truth of this.

Penguin's success stories are right there!
With a famous teacher in front, who would not see it?
In the early days, Penguin never forgot about the e-commerce business, and established its own e-commerce department several times, hoping to make a breakthrough in the e-commerce field.

But after playing it around, basically there was not even a splash.

One very important reason is convergence.

Converging QQ with e-commerce is unreliable at first glance.

Later, Penguin discovered the problem, changed its strategic thinking, stopped doing it by itself, and began to support others and invest.

And when investing, as long as the financial benefits, give up the corresponding power.

Such as JD.com, such as Pinduoduo.

In the process of growing up, they all rely on Penguin's strong financial resources and advantages in channel resources.In the process of Penguin investing in such e-commerce companies, Penguin voluntarily gave up its voting rights and gave up the corresponding power to the entrepreneurial team.

This not only allows the transaction to proceed smoothly, but also ensures that the entrepreneurial team has control over the company.

Then everyone benefits.

This model has become more and more popular, and it has become the core means for Penguin to dominate the domestic Internet industry.In contrast, Ali's methods are a bit rough, and he buys 100% of any company he likes, which requires both capital power and capital gains.

In the end, power was gained, but benefits were lost.

Many excellent companies acquired by Ali have lost their vitality after the merger, and have become worse and worse, and many of them have even closed down.

Entrepreneurs often have one characteristic, which is sufficient self-confidence.

Blindly confident.

This kind of confidence can even surpass many common sense economic principles and very accurately calculated statistics.

Because many entrepreneurs make decisions like this.

That mess is useless!

That's a management decision, not an entrepreneur decision!
Entrepreneurs' decision-making is often unconstrained, and I want to do it... I don't need any basis or reference, I think it's okay to do it, then do it!
It was as if God was guiding him in the dark, and he achieved great success.

This has led to many entrepreneurs who like to firmly hold power in their own hands, are unwilling to decentralize power, and feel that only they are right... Especially unwilling to be in their own territory, what they say is not counted, and others It counts.

Don Mattrick was such a worry.

This is really too much to worry about.

Lao Zhang doesn't care, all his expectations in Changyou are benefits, and he has already given up all the power to Zhou Buqi.Zhou Buqi didn't care much more. Several years ago, he promoted Zhang Yiming as the president of Ziweixing, and appointed Lu Qi as the president of Ziweixing International. The easier he was, the better.

Moreover, the complexity of acquiring Yahoo also made him realize the difficulty of business reorganization after mergers and acquisitions.

Zhou Buqi said slowly: "Creativity is something at the bottom of human nature. If you want to stimulate creativity, you must satisfy all the desires of human nature. Power is the most important thing. Everyone wants to maintain independence and want to be able to make decisions for themselves .The concept of mergers and acquisitions after Changyou needs to be adjusted, as you said, to transfer power and reap benefits."

Mattrick took a deep breath.

You're done!
Once this matter is finalized, Changyou's development path in the future can be said to be flat.

Zhou Buqi asked: "What about the ratio of voting rights to equity? Is there a plan?"

Mattrick said: "I have already talked with Supercell. They also hope to avoid the risk of starting a business by selling. But they also want to maintain a certain amount of future income and control of the company."

Zhou Buqi smiled, "Normal."

Mattrick said: "Their entrepreneurial team hopes to retain 15%-20% of the equity, and at the same time have 50% of the voting rights."

(End of this chapter)