My rebirth is different

Chapter 569

After Cai Congxin announced the financing conditions of Facebook, the VC representatives present had mixed reactions.

Facebook is not the sun. Naturally, it is impossible for everyone to revolve around it, and it is impossible for all VCs to trust it without a doubt.

The representative of Temasek raised a question, "I would like to ask Mr. Cai, although Facebook's valuation of 50 billion, in my opinion, has a valuation basis, but for our investors, the risk is already very high. Your country is currently listed. The three Internet companies with the highest market value are Sina with a market value of 36 billion US dollars, Sohu with a market value of 25 billion US dollars, and NetEase with a market value of only 21 billion US dollars. In fact, it can be said that Facebook’s last financing of 40 billion US dollars is already considered a mainland Internet company There is a ceiling in the valuation. It is still unknown whether Facebook can exceed 40 billion U.S. dollars after it goes public. In this round of financing, your company has raised an asking price of 50 billion U.S. dollars, and it is the starting price. Is this..."

Although it was not stated explicitly, the meaning of distrust has been clearly revealed.

This is also understandable. Financing is what it is.Investors hope to keep the valuation as low as possible, because they can get more shares with less money.As for the invested company, they hope that the higher the valuation, the better!In that way, you can pay less for shares and get more money.

This is the process of a game, until a number acceptable to both parties is reached, then the cooperation will be happy.

The views expressed by representatives of Temasek also represent the meaning of some VCs, and many people expressed their agreement.

Sequoia Capital even raised a new question, which is more acute.

"Mr. Cai, the scale of Facebook has indeed become the leading social networking site in mainland China. The number of registered users and the number of daily active users are unmatched. This is admirable. But what I want to know is that Facebook has so far not Seeing a clear profit model. No... Maybe it should be said that Facebook has never made a profit at all! The three portals that Mr. Li of Temasek just exemplified have shown good profitability , according to the financial report, the revenue in the first quarter showed an upward trend. Among them, Sina hit a record high of 3190 million US dollars in revenue, with a net profit of 1170 million US dollars; Sohu’s revenue was 2210 million US dollars; , the net profit per share is as high as US$1770. Regarding this question, how does your company think about it.”

For this problem, perhaps in the entire conference room, only Mr. Liu from Modu International Trust Investment does not care, because their investment in Facebook has more political significance than investment significance, so it does not matter to him whether Facebook is profitable or not , As long as you can have a certain voice on Facebook and maintain Facebook's "political correctness", this is enough.

In order to achieve this goal, it is not a bad idea to spend more money.

But all other VCs are very concerned about this issue.

Everyone says that VCs are too tolerant of Internet companies, allowing these companies to lose money for many years in a row, and even some Internet companies have been listed for more than ten years and still maintain continuous losses, such as Amazon...

However, no one is a fool, not even VCs!On the contrary, those who can do VC are obviously the elite among the elite, the truly smart people.

There must be a limit to everything. The reason why VCs can tolerate continuous losses in the Internet companies they invest in is because they believe that this company will make a lot of money in the future.

In other words, temporary losses are okay, but you have to come up with a clear and convincing profit model!

For example, when financing, you can tell the VC that the development plan of my company is like this. For three or five years, it is necessary to maintain a state of continuous investment and no revenue.However, the profit point of the company lies in this place. As long as the number of users reaches a certain level, the company will turn losses into profits.

As long as your plan is indeed executable and the profit growth point can be seen, then VC will trust you and will not hesitate to invest huge sums.

The current Facebook has not given a clear and convincing profit model.

If you want to ask why Sun Zhengyi didn't ask these things when SoftBank Capital became a shareholder for the first time?
Perhaps it can only be explained by Sun Zhengyi’s vicious vision and unique style of doing things. Around 2000, he made many large-scale investments, all of which were made when the target company had no future at all. And it's a lot of money when you make a move.

This is how SoftBank Capital became so successful later.

When investing in Facebook, Sun Zhengyi said that he was investing for Yu Wenfei!
Of course, he can do this, but other VCs are not like this. Like Temasek, Sequoia Capital, etc., they are very cautious in investing, and they would rather not invest than take too much risk.

…………

Cai Congxin and Yu Wenfei ignored and smiled, they had already considered this issue and were prepared.

How does Facebook make money, and what will it rely on to convert traffic in the future? This problem must always be faced.

Even if this investment does not answer this question, when the company goes public, it still needs to be explained to investors, otherwise, who will sell the stock to?

If the Facebook game hadn’t been spun off, perhaps the VCs present wouldn’t have raised this question at all, because Internet companies have turned their game business into cash, which has obviously become a trend in the past two years, especially in the domestic Internet circle.

NetEase is engaged in games, Tencent is also preparing a game department with great fanfare, and even Sohu and Sina are just around the corner.

But Facebook spun off the game department, and directly cut off this business, so what will be used to monetize the traffic in the future.

Facebook really wants to make a profit, but it's actually very simple. It only needs to advertise on the website. This is also the most direct way for Sina to make money.

With Facebook's current traffic, if you accept advertisements, you will definitely earn more than Sina. In fact, I don't know how many advertising companies have come to negotiate with them on the Facebook platform.

But Yu Wenfei refused all of them.

He has long said that what Facebook presents to users must be the most concise interface, without messy advertisements or anything that damages the user experience.

Then this most direct and most effective method of monetizing traffic is tantamount to being cut off.

As a result of the discussion between Cai Congxin and Yu Wenfei, they decided to come up with something real. Otherwise, it would be hard to fool VCs and investors. After all, Facebook will soon be preparing to go public. If you have been relying on "dreams", it is very It's not easy to go far.

As a result, those two projects that had been hidden for a long time were brought out.

Facebook Music and Facebook Video!
Originally, when Facebook was splitting off its business last time, these two projects were to be taken out separately to establish a company, but due to various reasons, they were unable to be officially launched.Therefore, the project was also hidden away.

Now, it finally comes in handy, that is, these two projects are again divided into Facebook's banner, and they are used as Facebook's traffic monetization channel.

Moreover, after Facebook's financing this time, it will also have a huge amount of funds to promote the official launch of Facebook music and Facebook videos, which couldn't be better.

The two market segments represented by these two softwares are also very imaginative, and they are perfect for "telling stories" to VCs and investors.

Although Yu Wenfei feels a little pity, it is a pity that these two projects should have been at the unicorn level, and now they can only be regarded as "tops" on Facebook.But he didn't care too much. After all, you can't be too greedy. You can't take all the advantages by yourself. When the time is right, you should also give the partners a little "sweetness".

There are many profitable businesses, but in terms of strategic significance, whether it is music or video, they are far less important than Facebook.

So for Facebook's success, both music and video projects can be appropriately "sacrificed".

Besides, if one person makes money and the other loses, the business will not last long. Only by winning more is the real win.

…………

Cai Congxin cleared his throat and explained: "Very well, I just took this opportunity to talk to you about this issue. It's not that our company has not considered the issue of how Facebook makes money. In fact, the channel for monetizing traffic has already been prepared. Well, when the funds for this financing are in place, the new project can be launched immediately!"

This statement once again caused an uproar in the conference room. If Facebook can achieve profitability before going public, the concept will be different.

Originally relying on the huge number of users, Facebook's valuation has been rising all the way. The reason why everyone is still cautiously skeptical is because it does not yet have a clear traffic monetization model.

If Cai Congxin can really come up with a convincing plan next, then the valuation of 50 billion US dollars is absolutely no problem.

Everyone will make corresponding adjustments to their respective quotation plans.

After all, they are all VC giants, and they have money in their hands. Not to mention that Facebook is valued at 50 billion U.S. dollars, even if it is 500 billion U.S. dollars, as long as there are profits to be made, everyone will do everything possible to raise money to invest. The key is to look at this Is the project worthwhile to vote for?

"Facebook has been preparing for two new projects before, but they were not launched due to hardware conditions and insufficient funds. Now that Facebook's major data centers across the country have been built, there are no hardware restrictions. Funding is no longer a problem after this financing, so the time is ripe. These two projects are Facebook music software and Facebook video!" Cai Congxin said confidently.

music?

video?

Everyone looked at each other, are these two projects reliable?
Now that there are so many free music and videos on the Internet, you can just listen to them and watch them casually. How can you make users pay for them?

(End of this chapter)