Internet Business Thinking

Chapter 40 Business Crisis in the Internet Era: What They Do at Critical Moments (3)
The ownership and control rights of a company are manifested in different forms in the establishment stage, growth stage, maturity stage, and transformation stage. This is the law of capital strategy and governance structure.Jack Ma's dynamic handling of equity control complies with this law and is suitable for Alibaba's growth stages, and the value created by all stakeholders has confirmed its effectiveness.Both Yahoo and Softbank are professional shareholders with governance structure, capital strategy design and preventive capabilities.Ma Yun's entrepreneurial spirit moved them so that they did not destroy Ma Yun's "equity control technique".

Entrepreneurship stage: Equity rules protect the founder's control and complete the capitalization of entrepreneurs.

Judging from the evolution of Jack Ma and his team's control over the Alibaba Group, the founders have put a lot of energy and effort into the company. They are not like professional managers, but like parents treating their children, doing their best.

The relationship between the founder and the company he founded is definitely not a property relationship, because property can flow in the market; it is not a relationship between the founder's control right, because the control right cannot escape the laws of nature.

Shareholders of Alibaba Group, whether it is Softbank or Yahoo, fully respect this rule. Therefore, it is not so much that Jack Ma is good at controlling equity, it is better to say that shareholders have good control over equity.

The corporate culture system formed by the integration of the founder's behavior, conduct and ethics with the company's internal learning, decision-making and action systems affects how the company receives customers, how to develop products, how to manage quality and production, how to manage talents and However, these factors still exist in the form of "hidden rules".

The corporate brand system formed by the integration of the founder's choice, resources and standards and the company's external introduction, transaction and interaction system affects the source, selection, evaluation, use and change of corporate resources and elements, but these factors have not yet been established. form a stable competitiveness.

The founder's decision-making, delivery, execution, budget, correction, and incentives, etc., seem to be stylized, artistic, and personalized in the face of the annual operating system adapted to various management environments and the match with the current team.

Growth stage: Equity rules protect the control of high performers and complete the organization of insiders.

During the rapid growth stage of Alibaba Group from 2005 to 2010, the corporate equity rules all protected those with outstanding performance, who had performance resources, and who to whom the power was inclined. It can even be said that "enterprises are controlled by outstanding performers."

At this stage, Ma Yun introduced Professor Zeng Ming and promoted the compound growth of the entrepreneurial team, etc., all of which are promoting the personal style of the internal team to become the organizational strength structure, resource structure, business structure, operation process, human resource system, and corporate culture system. It is also beginning to be revised. It is the "hidden rules" that Jack Ma personally established during the entrepreneurial stage.

Mature stage: persuasion rules protect investor control and complete the socialization of enterprises.

Both single governance subject and insider control are in a desperate situation: shareholder governance, opening up the shareholder structure, and finally falling into "shareholder conflict"; director governance, establishing corporate governance, and finally falling into "decision-making conflict"; professional governance, establishing a leadership system, and finally falling into "loyalty conflict".Ma Yun has begun to realize this, and his high-profile resignation from the CEO position is also in line with this trend.

With the rise of Alibaba as a business empire, Jack Ma, as CEO, has brought unlimited benefits to customers and employees, but at the same time brought uneasiness to shareholders. This is also the problem that Alibaba will face now and in the future.Alibaba will enter the avenue of separation of capital strategy and governance structure, and integrate into the universal good rules of global company equity control.

(Section [-]) The Embarrassment of Commercialization of Sina Weibo

Grassroots Dahao relies on Sina Weibo for its annual income of tens of millions. Xiaomi, Kuaishubao, etc. rely on Sina Weibo to build their brands. As a platform for them to make money, Sina Weibo, which has 5 million users, is difficult to make money: its commercialization The attempts have had little effect, the advertising model has no innovation, and it is difficult to enhance social attributes... Perhaps, only by returning to the strategy of social media platforms, doing a good job in Weibo search, traffic monetization, and big data mining, can there be a way out.

In just a few years, the number of users has exceeded 5 million, and more than 1 million microblogs are published every day—Sina Weibo has created a miracle of self-media.However, the huge number of users has not been converted into considerable cash flow.Sina Weibo, considered a milestone product of Sina, encountered embarrassment and bottlenecks in commercialization after earning enough attention.Faced with pressure from investors, Sina Weibo hastily launched many strategic applications, such as intelligent recommendation, display advertising, Weibo membership system, micro-task platform, and news feed advertising, etc., but none of them achieved the expected results, and many products failed in the end. Let it go.

According to Sina's financial report: In 2012, Sina Weibo's annual operating income was 6600 million US dollars. In sharp contrast, Twitter achieved an operating income of 2012 million US dollars in 3.5 with almost the same number of users.What is even less optimistic is that when Sina Weibo is struggling to find a profit model, Tencent WeChat has acquired 3 million users in less than two years and has become the most threatening competitor of Sina Weibo. The commercialization of Sina Weibo is more urgent.

Commercial Journey

The success of Baidu and Tencent QQ has explained the classic saying of the Chinese Internet that "as long as you get users and traffic, you don't have to worry about the profit model".However, this sentence does not seem to apply to Sina Weibo, whose commercial exploration has been tried and failed.

In April 2012, Sina Weibo launched a brand advertising display system, based on the social interest graph (SIG) for accurate advertising, and recommending brand content to users who may be interested. At that time, it attracted some companies to join, such as Pizza Hut Happy Restaurant However, due to the mandatory implantation of advertising information, which seriously damaged the user experience and visual experience, it caused a lot of criticism as soon as it came out.Display advertising inherited the profit model of the portal website, but did not make full use of massive data to innovate the advertising model, and competed with Sina portal advertising.

In June, the Sina Weibo membership system covering "identity privileges, function privileges, mobile phone privileges and security privileges" was launched. Members have 6 privileges. This seems to be a very good user experience, but users have to pay 15 yuan per person. Monthly or annual fee of 10 yuan.In fact, the Sina Weibo membership system is nothing more than a copy of the QQ membership system. Members can enjoy higher-end functions that ordinary users cannot enjoy.However, Sina Weibo has inherited Sina’s core media attributes and is a platform for users to receive and disseminate information, while the membership system appears more often in websites with strong social attributes (such as Qzone, Renren, etc.) , Whether it can bring the same profit effect is a big question mark.

It is difficult to find its own profit model. Tencent relies on WeChat to counterattack. Under the attack of both sides, Sina Weibo launched the instant messaging application "Weiyou" in November.Prior to July, it also launched the private social application "Close Friends" - an application similar to Path and WeChat. "Weiyou" and "Close Friends" hint at Sina Weibo's motivation to transform into a social network, but there is still a long way to go in terms of product experience if it wants to catch up with Tencent's WeChat, which started out as a private social network.

Looking back, let’s look at the official platform “Micro Tasks” launched by Sina Weibo in September 2012, which connects grassroots accounts and personal accounts with communication value with public relations companies, agent operation companies, and small and medium-sized enterprises for a fee. A 9% platform usage fee is charged in the transaction between the two parties.Sina’s explanation is to create a better marketing environment, but it is interpreted by the outside world as asking for money from grassroots big players. "The net profit reached 30 million yuan.However, Sina Weibo's move has caused many grassroots players to leave the field and switch to its competitor Tencent WeChat.

After the internal test promotion in July, in December 7, Sina Weibo officially launched the information flow advertisement.In-feed ads insert promotional information in the user’s information stream, trying to integrate into the user experience more seamlessly than display ads, and are more suitable for mobile terminals.

In fact, Facebook and Twitter, the pioneers of social networking sites, have already launched information feed advertisements. Facebook's native advertising strategy integrates sponsored content with regular content, helping it expand in the field of mobile advertising, which already accounts for 20% of its advertising revenue. Twitter's ad tweets are similar, appearing at the top of user pages.

Information flow advertisements are considered the key stage of Sina Weibo’s commercialization stage, but inserting advertisements directly in user information flows will undoubtedly damage the user experience, and it is difficult to obtain revenue before it has a large scale.

Core Values ​​of Commercialization

Weibo and portals are the two cores of Sina. They both have strong media attributes, and topic is their eternal theme. They both provide users with timely, concise and valuable information.Therefore, the construction of Sina Weibo's social media platform should also be based on the irreplaceable core value of strong media attributes. Any commercialization and platformization attempts that deviate from media attributes will inevitably end up harming others and benefiting oneself.

But this is not to say that Sina Weibo’s social attributes are useless, but compared with private social platforms such as WeChat and Path, Sina Weibo’s weak relationship network is more suitable for providing and disseminating information, although it has interactive functions.WeChat launches public accounts to enhance media attributes, but its limited number and operating costs determine that it cannot surpass Sina Weibo in terms of information dissemination scale and efficiency.

(End of this chapter)