Top of the Great Era

Chapter 2948 The Third Book

Having said so much, this was not Zheng Xiaoli’s main purpose.

The reason she came to meet Boss Zhou this time was actually to apply for a project - a video website.

However, Boss Zhou has always been cautious about current streaming video websites.

This is an asset-heavy, high-cost field.

It's like Ziweixing International is a ship, which already has a number of heavyweight assets such as Yahoo, Ziwei Cloud, and artificial intelligence. If a video business is added, the ship may not be able to bear the weight and will sink.

Zheng Xiaoli felt that the situation had changed. After thinking for a while, she decided to take a roundabout strategy. "From what I know, the company's various fronts and products have developed very well in the past year. But there is an important product that is growing very fast, but I have discovered some risks. Because our competitors are growing faster than us!"

“Which product?”

“Twitch.”

"video?"

Zhou Buqi was not too surprised by this result.

Twitch is a gaming video platform. Its main business is for gamers to live broadcast their gaming videos and share some exciting gaming videos. It is the world's largest gaming community.

This was the website that Zhou Buqili mainly acquired at the beginning.

This will allow Ziweixing International and Changyou to cooperate and complement each other at a strategic level.

Zheng Xiaoli said: "Yes, in the past year, YouTube's revenue exceeded 40 billion US dollars, and they have turned losses into profits. Conservative estimates show that the profit can reach at least 5 million to 7 million US dollars."

"No way?" Zhou Buqi was shocked. "YouTube is profitable? Hasn't it always been losing money? Google's financial reports have always shown this."

Zheng Xiaoli said: "The data in the financial report is deceptive. Google counted a lot of video-related R&D investment and some creative new product investment in YouTube's business, which evened out the profit. If you only look at YouTube's operations, it seems that it turned a profit two years ago. I have analyzed their financial reports. This year, YouTube's revenue can reach 40 billion US dollars, all of which is advertising revenue. 55% of it will be distributed to content providers, and another 10 billion US dollars will be used for operating expenses, and the rest is business profit."

Zhou Buqi really realized the unimaginable advertising market in the United States. "US$40 billion in advertising expenses? If all the domestic video websites are added together, can the advertising expenses be as high as US$10 billion? The United States has only 3 million people, so this consumer market is really huge!"

Zheng Xiaoli smiled and said, "Even Twitch, which is the largest game streaming platform, has an advertising fee of more than $5 million a year. Twitch's profit situation is similar. If we don't count the development of new projects and only look at its own operations, Twitch can make at least $8000 million to $9000 million in profit in the past year."

Zhou Buqi nodded and said, "The video website industry in the United States is really different from that in China."

Zheng Xiaoli said: "Yes, Twitch is the preferred platform for most game promotions."

“Competition with YouTube?”

"Well, from what I understand, YouTube's gaming advertising revenue in the third quarter of this year has exceeded 3000 million U.S. dollars. In the first quarter, it was less than 500 million U.S. dollars. This shows that YouTube's advertising department is strengthening its appeal in the gaming field."

"It's time to seize the market!"

Zhou Buqi had mixed feelings about this.

YouTube is a video website that he co-founded, and he even bought the domain name from him.

After it developed, it was bought by Google.

Going around in circles.

The child that I once raised has now become my competitor.

However, if he had to do it again, Zhou Buqi would have no choice but to make this choice.

Zhou Buqi was too weak and too poor back then, with no money and no reputation in the US market. Selling YouTube to Google not only gave him money, but also allowed him to successfully establish a relationship with Google and gain an opportunity to expand his business in the US market.

Zheng Xiaoli said: "Game advertising is an important part of Internet advertising. In the past year, the total scale of game advertising in the European and American markets reached 25 billion US dollars. Twitch, as the largest game video platform, only received 5 million US dollars, and its market share is less than 20%."

Zhou Buqi couldn't help but laugh, "20% is not a small amount, right?"

Zheng Xiaoli said seriously: "It's too little. Twitch's investment in game promotion resources accounts for at least 50% of the industry! Our resource investment ratio is 50%, but our income is only 20%. This data is obviously too low."

"Everyone else's are just text or pictures, right?"

Zhou Buqi thought this was normal.

For the same promotion, other websites may use text content or picture content to obtain traffic, and the same proportion of advertising will occupy less corporate operating resources. Twitch is different. It is live broadcast and long video, which really takes up a lot of servers, bandwidth and operating resources.

In other words, if someone spends 1 dollar of corporate resources, they can earn back 5 dollars of advertising fees.

Twitch, on the other hand, is an asset-heavy company that has to spend $3 in corporate resources to earn back $5 in advertising fees.

Looking at it this way, it seems a bit unfair.

This is also the reason why Zhou Buqi has always been very cautious about the "free + advertising" video website model. He has a special liking for Netflix because Netflix is ​​a paid membership model. Relying only on that little advertising fee, it is impossible to afford such expensive film and television copyrights. Zheng Xiaoli said: "But an important feature of the Internet is that the winner takes all, and Twitch does not have this. Moreover, text ads and picture ads do cost less, but the advertising fees are also lower. From this perspective, video ads should have a more important role."

"What are your considerations?"

Zhou Buqi didn’t quite understand.

Fortunately it doesn't matter.

Not understanding the analysis process and specific reasons does not hinder him from making the final decision. Even for major projects at the forefront of world science and technology such as artificial intelligence, he can make very accurate decisions.

Zheng Xiaoli said: "Twitch is a gaming platform that is loved by all gamers. This is an advantage, but also a disadvantage. Because the classification is too single, the source of traffic is too single. A single source of traffic will inevitably lead to insufficient website traffic and insufficient advertising revenue."

Zhou Buqi asked: "What are the disadvantages of single traffic?"

Zheng Xiaoli thought for a moment and said with a smile: "Let me give you an example. If I am a game enthusiast, but I don't have the urge to watch game videos for the time being, I will go to YouTube. However, while browsing YouTube, I suddenly saw a promotion for a game video, which stimulated me and aroused my urge to watch game videos, so I clicked in to watch the game video. This means that the game traffic that originally belonged to Twitch has been taken away by YouTube. This is the introduction of diversified content to game traffic. Single traffic is target traffic, but diversified traffic can bring unexpected traffic. Most of the increase actually comes from unexpected traffic, not target traffic."

“Destination traffic, accidental traffic… Yeah, well said!”

Zhou Buqi also learned some new words.

Many of the main concepts of Internet traffic today were popularized by Boss Zhou. He even wrote a book, "From Traffic to Traffic Pool", which can be said to have promoted the Internet traffic thinking to the whole world.

Plus his current fame, prestige and status.

The book has now sold over 500 million copies worldwide, earning him more than $1000 million in royalties. Anyone working in the Internet today who says he has not read this book is as unworthy as a JAVA engineer who has not read "JAVA Programming Ideas".

Zheng Xiaoli was very happy to be praised. "Users have the desire to watch game videos, so they come to Twitch to watch game videos. This is the target traffic. Users do not have the desire to watch game videos, but suddenly want to watch game videos because of other attractions. This is unexpected traffic."

Zhou Buqi asked: "Where did this concept come from?"

Zheng Xiaoli smiled and said, "I thought of it myself."

"original?"

"Ah."

"Great!"

Zhou Buqi suddenly started to have wild thoughts.

Zheng Xiaoli went on to say: “Twitch currently has a huge shortcoming, which is the lack of unexpected traffic. The reason for this is that we lack a matrix of video products and lack opportunities to create unexpected traffic for Twitch.”

Zhou Buqi understood now, "Yahoo Video?"

"Yes!" Zheng Xiaoli nodded heavily, full of expectation, "Can we do Yahoo Video?"

Zhou Buqi smiled and said, "Do it. Didn't I say that before?"

Zheng Xiaoli said: "It was said before that some video content would be provided in the Yahoo App. However, these videos are mainly news videos, which are a supplement to text information. What I want to do is to have a separate, richer, full-category Yahoo video, and there will be a separate Yahoo Video App to compete head-on with YouTube!"

Zhou Buqi didn't hesitate too much and decided immediately, "Do it! Do it boldly!"

"Really?"

Zheng Xiaoli couldn't believe that the boss was persuaded so easily.

Zhou Buqi waved his hand and said, "We can't just watch YouTube dominate the market. However, I suggest you don't rush it. It's better to wait for another half a year until Ziweixing International goes public and raises money before launching the business. The video business requires too much capital flow, and we are too weak to afford it. You can prepare in the next six months and come up with several plans to compete with YouTube."

Zheng Xiaoli was very happy and excited. "Okay, then I'll wait another half a year!"

Zhou Buqi suddenly made a new request, "That... the concept of destination traffic and accidental traffic, was it really your original idea? Did you read it in a book?"

Zheng Xiaoli said: "I thought of it myself."

Zhou Buqi cleared his throat and said, "You also know that I have written two books, "From Traffic to Traffic Pool" and "Platform Economy", both of which are very popular in the industry."

Zheng Xiaoli smiled and said, "Well, these two books are the bibles of the Internet industry. Anyone who has not read these two books is not considered an industry insider. Especially the book "From Traffic to Traffic Pool", which is a magic weapon for everyone to make Internet products."

"This is the problem. Many people have been telling me and urging me to write a new book. Many people have been asking me questions when they meet me. But I don't have any ideas at the moment and don't know where to start. The two concepts you mentioned are very good."

"what?"

"You suddenly reminded me that this third new book might as well be a sequel to "From Traffic to Traffic Pool", called "From Target Traffic to Unexpected Traffic". What do you think?"

Zhou Buqi was not as shameless and thick-skinned as Jobs. In such matters, one should always have basic respect and seek the other party's opinions.