2003: Starting with Foreign Trade

Chapter 794 Don’t bully young people into poverty

This marks the second largest acquisition in China's internet sector since Tencent's acquisition of MiTalk!

On Monday, September 16, 2013, Baidu held a press conference to announce its acquisition of 91 Mobile Assistant, the largest app distribution tool software in the Chinese mobile application market at the time, for US$19 billion.

Yue Feng, General Manager of Baidu Wireless Business Unit, and Xiong Jun, CEO of 91 Assistant, personally attended the press conference. At the conference, Yue Feng praised 91 Assistant's achievements in the mobile application business.

"The acquisition of 91 Assistant is both an offensive and a defensive move for us. What we value is 91 Assistant's dominance in the Android market."

When a reporter questioned whether the price for acquiring 91 Mobile Assistant was too high, Yue Feng did not give a direct answer, but only emphasized the role of 91 Assistant in Baidu's business. In fact, opinions on the price vary.

Xiong Jun expressed great satisfaction with the offer, appearing radiant and full of confidence throughout the press conference.

Three years ago, he was discarded by NetDragon like trash, but three years later he is already financially independent!

Don't bully young poor!
However, he is most grateful to Tan Jincheng now. Three years ago, Tan Jincheng saved him with 1000 million yuan and gave him and his team 15% of the shares. After the contract was signed this time, President Tan said that he would not divide it according to the 15% ratio, but directly give their team 3 million US dollars as a reward for their team.

That's nearly 100 million RMB more! And Mr. Tan negotiated this amount himself, which is truly generous.

In fact, Baidu's urgency is understandable. In addition to their continuous contact with Xiong Jun's team over the past year, Ali also intervened in the acquisition of 91 Assistant, preparing to get involved.

Is 91 Assistant worth $19 billion? It's definitely not. However, considering the current important turning point in the shift from PC internet to mobile internet, 91 Assistant is still very important to Baidu.

91 Assistant alone has 2 million registered users on Android, not including those who haven't registered. Once it's acquired by Ali, without WeChat, the biggest gateway to the mobile internet will no longer be in their hands.

In short, they were determined to buy it, even if it was expensive.

Although Li Dashuai was somewhat displeased with Tan Jincheng's offer of an additional 5000 million US dollars, he still felt indebted to Tan Jincheng and didn't waste time arguing with him.

Ali has been eyeing the situation closely, and things might change if we wait any longer. For Baidu, timing is often more important than price.

Baidu held a press conference here, and Ali learned of the news. They were furious. Their offer was not low, but they were outbid. They had no choice but to turn to acquiring Wandoujia instead.

But the thought that Tan Jincheng was also a major shareholder of Wandoujia made him furious.

"Damn, where did this kid get such a good eye? He's taken over the entire mobile app market."

Although no one has publicly stated anything, everyone knows that Mr. Ma and Mr. Tan are somewhat at odds. When the acquisition team relayed the news to Mr. Ma, he was helpless.

Forget it, I'll give him a call. Actually, they used to have a pretty good relationship. Old Ma even helped connect Tan Jincheng with Huayi, resolving the issue of the spokesperson being blacklisted.

At the time, Lao Ma intended to win over Tan Jincheng. When did their relationship deteriorate?

No, I don't think I've ever offended this kid, have I? It seems like he's always kept his distance from me?

Old Ma thought about it for a long time but couldn't figure it out. However, he still called Tan Jincheng. There was no other way; if the major shareholder didn't agree, this matter would be difficult to resolve.

"No problem, Mr. Ma. You can send someone to talk to them. Once we agree on the price, we can all talk."

Tan Jincheng readily agreed. In fact, he wasn't surprised that Lao Ma would call. Between 2013 and 2015, BAT (Baidu, Alibaba, Tencent) was burning money irrationally at its worst. They were all grabbing land like they were racing to expand, not caring how much they were spending.

If they set their sights on an industry and can't acquire it themselves, they'll invest heavily in it. If there's even the slightest chance of acquiring it directly, they'll spend ten thousand dollars on something that costs 100 dollars.

The market premium is very high, which is why Tan Jincheng dares to keep them hanging on. However, everything has its limits. Baidu has already reported a price of 19 billion US dollars. If they keep hanging on, they may end up losing everything.

According to Tan Jincheng, the current price of 91 Assistant at around 5 million US dollars is reasonable. It is currently in an upward trend, and even if the premium is doubled, it would only be 10 billion US dollars, which is barely reasonable.

"Hey kid, why didn't you sell it before?"

“Mr. Ma, what you’re saying is ridiculous. I’m just an investor. It was Xiong Jun and the others who were negotiating before. I have to respect the founding team. Besides, I don’t have time to deal with these things.”

You're kidding me. If you hadn't created obstacles, would we be having such a difficult time negotiating? Would Baidu have offered 19 billion?
"Alright, then I'll do my best to negotiate with Wandoujia. Don't go back on your word once we've reached an agreement."

"I promise I'll keep my word. If Wang Jun doesn't sell, I can transfer the shares to him at the price you offer."

Unlike 91 Assistant, Wandoujia has gone through several rounds of financing. Tan Jincheng is the largest shareholder, but he only holds 30% of the shares. In addition, its founder did not experience as many ups and downs as the founder of 91 Assistant.

Wang Jun, who is the same age as Tan Jincheng, is the top scorer in the Guangdong Province college entrance examination and graduated from Beijing University. His life has been full of ups and downs since he was a teenager. After graduation, he also worked at Google for a period of time. He can be described as a prodigy.

Since founding Wandoujia, fundraising has been smooth sailing. He himself is a bit of a literary youth, keeping a few cats in his spare time. In his own words, he founded Wandoujia just to find a free and easy job for himself.

This is one of the reasons why Wandoujia differs from other applications with its clean and minimalist interface; if this company doesn't want to sell to you, there's really nothing you can do.

Mobile applications are currently in a growth phase, but with the entry of giants like BAT (Baidu, Alibaba, Tencent) and 360, those without a strong background will only be eliminated. Being acquired during a company's growth phase is the best outcome, at least ensuring sufficient funding.

Tan Jincheng invests in mobile applications to make money; he wouldn't invest huge resources in them. If he can sell them, he will sell them without hesitation.

Ali is also very anxious now. Tencent has its App Store, and Baidu has its 91 Assistant. Ali doesn't have a "son" that it has raised from childhood, so it has to acquire either Wandoujia or Wandouhua.

Having missed out on 91 Mobile Assistant, they don't want to miss out on Wandoujia, which also has a large market share.

"How about this, I'll talk to Mr. Wang from Wandoujia. If Mr. Ma trusts me, I'll act as an intermediary and try to help you complete this acquisition as soon as possible, okay?"

If Wandoujia were to be sold now, it could easily fetch around 10 billion US dollars. But in two or three years, it might really be worthless. It's a bit of a pity for Wang Jun. Besides, who else would they take advantage of if not BAT (Baidu, Alibaba, Tencent)?

"Mr. Tan, it's really great that you were able to act as a go-between."

Although Lao Ma didn't understand why Tan Jincheng was being so agreeable today, the fact that he said he would act as a middleman meant he meant what he said, and a major shareholder acting as a middleman was definitely much more effective than their acquisition team.

Besides being eager to sell his shares, Tan Jincheng was also in a good mood.

Mobile applications are probably the simplest internet project for those born in the 80s to start a business. While top products like 91 Assistant and Wandoujia, which can easily fetch hundreds of millions of dollars, are rare, there are quite a few projects that sell for millions or even tens of millions of dollars.

It won't take long; this is an opportunity for those born in the 80s and even the 90s to get rich quick through the internet.

After the press conference ended, Xiong Jun did not go to celebrate, but went to find Tan Jincheng immediately.

Of the $300 million, he could personally receive $150 million, which is a very considerable amount even after taxes. If 91 Assistant were still in NetDragon's hands, what would he get?
A reward of several hundred thousand? Maybe more, who knows.

"What are your plans for the future?"

When Xiong Jun found Tan Jincheng, he was having barbecue with Li Yaohui and Zeng Jixiang by the roadside. Xiong Jun naturally sat down and ate with them.

"I haven't decided yet. Does the boss have any suggestions?"

In Beijing in September, a cold beer seemed to cool down the day's restlessness and heat. Baidu promised to transfer the money to their account within a month; they really are rich and powerful.

A $19 billion, or more than 110 billion RMB, can be resolved within a month. There are very few companies in China with that kind of capability.

"Haha, what suggestions could I possibly have? You tell me your thoughts first."

From barely being able to afford a house to achieving complete financial freedom, a person's mindset undergoes a significant change, something Tan Jincheng has experienced firsthand.

If you don't want to be in the limelight anymore, then keeping a low profile and living a wealthy life is not a bad decision.

However, if you like to be in the spotlight but also want to protect your wealth, then you'll have to make some noise, whether it's becoming an investor, starting a new business, or even becoming an internet celebrity.

A bite of grilled skewers, a sip of beer—it was clear that Xiong Jun was a little hungry.

"I don't have any good ideas yet. I plan to rest for a while and think things through for the future."

Before Baidu takes full control, Xiong Jun will still serve as CEO of 91 Assistant to help Baidu take over smoothly. According to the memorandum of understanding signed by both parties, Baidu will acquire all the equity of 91 Wireless Network Co., Ltd.

After the full acquisition, 91 Wireless will become a wholly-owned subsidiary of Baidu and be renamed. During this period, it will still be operated by Xiong Jun's team, and after that, they will not be responsible for its operation.

According to Tan Jincheng's recollection, 91 Assistant will likely be split up and absorbed by Baidu in various ways, and Xiong Jun and his team will probably only stay until around the end of this year before officially leaving 91.

In total, Xiong Jun's team consisted of only seven people, including himself. After the business expanded, he hired some more people, but the entire company only had more than 30 people. A company of just over 30 people created a value of 19 billion US dollars, which is truly a wealth creation myth.

"Some people on the team will probably stay at Baidu, after all, it's a huge platform, but it's definitely not suitable for me."

If he stayed at Baidu, he would have to be transferred to another department, and it would be impossible for him to stay in the 91 team, which is not what he wanted.

"It's good to take a break. The change in mindset from having no money to suddenly becoming rich is uncontrollable. You have to manage it yourself." Xiong Jun comes from a well-off family. According to him, his first contact with code can be traced back to when he was 12 years old, in 1994. At that time, Tan Jincheng was still playing in the mud.

Despite not getting ideal scores on the college entrance exam and being admitted to his first-choice major, he didn't end up in his desired computer science program and was instead assigned to accounting. However, he didn't give up on his passion for computer science.

My first job after graduation was at a Taiwanese company that developed ERP software. I quickly got promoted and became the company's youngest manager, overseeing a small team of 10 people.

In Taiwanese companies, it's quite difficult for mainlanders to get promoted to a certain position, which shows his talent.

In a way, he was one of the first senior programmers. However, according to Tan Jincheng, Xiong Jun was not really suited for entrepreneurship. He was good at managing a small team, but his management ability was limited when the team grew larger.

His conflict with NetDragon shows that he has no understanding of the value of what he creates. In this negotiation with Baidu and Ali, if it weren't for Tan Jincheng's oversight, he would have surrendered long ago.

Despite already achieving some success, it was still sold to NetDragon for 10 yuan. He was already a bit overwhelmed when Baidu made its first offer.

Not every senior programmer can become Lei Jun (CEO of Xiaomi), and an excellent entrepreneur must be a qualified 'shrewd businessman'.

Otherwise, the value you create will only benefit others.

The biggest winner in this deal was definitely Tan Jincheng, followed by Xiong Jun. Of course, NetDragon also didn't lose out; they only spent 1000 yuan and got a return of 10 million yuan, while also resolving the internal conflicts within the company at the time.

Xiong Jun hadn't completely calmed down yet. This was a sudden windfall for him, like winning the lottery, but he could understand what the boss meant.

No matter what, he can do whatever he wants now. With a net worth of nearly 10 billion, he can never spend it all as long as he's not framed.

"If you're still considering working, you could check out Orange Technology or Gaode Maps. Also, if you'd like to work on a larger platform, I can recommend one, but my suggestion is Gaode."

Tan Jincheng is currently obsessed with privatizing Gaode and wants to bring in some higher-level talent. Xiong Jun is technically brilliant and has some management experience, so it wouldn't be a problem for him to be in charge of a department at Gaode.

Even after rotating through different positions for a certain period of time, it's not impossible for them to take on higher positions; Tan Jincheng doesn't want to give up such outstanding talent.

"Gaode Maps? The one that competes fiercely with Baidu Maps?"

The ride-hailing market has been booming recently, and Gaode Maps and Baidu Maps have been making headlines, with the two companies engaging in various verbal battles over issues such as accurate location tracking and route optimization.

In particular, Gaode launched a major update in July this year, adding a ride-hailing service that integrates the resources of Kuaidi Dache and Didi Dache, covering 80% of the ride-hailing market share.

With its high market share, Gaode is gradually transforming from a single map service into an LBS toolbox. The new version of Gaode Map not only increases the number of taxis that can be booked, but also improves the efficiency of hailing a taxi.

The coverage area has expanded to 26 cities, encompassing almost all first- and second-tier cities in China.

In terms of technical strength, Baidu, which entered the market later, cannot compare with Gaode. However, Baidu has plenty of money to fight with, so the two companies are evenly matched.

"Yes, that's one of my businesses too. I can introduce you to it if there's an opportunity, but let's not rush it. You should rest well first and relax by traveling or something."

"Oh, by the way, could you please persuade Wang Jun to sell the pea pods to Ali? I talked to him about it during the day, and he was still a bit hesitant."

Both companies were invested in by Tan Jincheng and were also competitors with extremely high market share. Xiong Jun and Wang Jun naturally knew each other, and the two companies even had some technical exchanges.

"Huh? Ahri is entering too?"

Nodding, Tan Jincheng clinked glasses with him: "You already have BT, how can you be without A? You can sell it now for a high price. Come back in two years and see, 10 billion or so is just wishful thinking."

As far as I remember, Wandoujia was acquired by Ali in 2016, and it seems that it only cost 2 million US dollars at the time, which can be said to be a significant devaluation.

Both being tech professionals, Xiong Jun and Wang Jun had frequent private contact. Tan Jincheng felt it was necessary to remind him again that while his shares could be transferred, selling them as a whole package would definitely yield a higher premium than transferring individual shares, which would benefit both parties.

"It's not just Ali; 360 is also waiting. They have a clear advantage in making these kinds of mobile applications. With all the big players entering the market, it's not easy for our small workshops to survive. Going public won't be a good way to cash out, so it's more convenient to just sell to them."

"Why can't you do something with the money?"

Baidu acted quickly, announcing the completion of its acquisition of 91 Assistant on October 1st, National Day. This shows that they are really in a hurry. Among the three BAT companies, Tencent's market value is twice that of Baidu. In addition to QQ and WeChat, they also have App Store, a huge traffic portal.

As for Ali, since it has been delisted from the Hong Kong Stock Exchange, it cannot be valued for the time being, but its market value is definitely over hundreds of billions of US dollars. BAT is very successful, but B has fallen behind.

The third-ranked pig farm has a market value of less than 10 billion, so it might be a good time to buy at the bottom.

As for another major mobile application, Wandoujia, Wang Jun ultimately had no choice but to accept the agreement for a full acquisition by Ali after much effort from various parties.

There was no way around it; Ali offered too much—a total acquisition of $15 billion!

He is the founder, that's true, and he holds shares in the company, that's true too. But all the other shareholders are willing to transfer their shares to Ali. Given Ali's style, even if he doesn't sell, he'll end up with shares that are stuck in his hands.

However, since this acquisition was spearheaded by Tan Jincheng, Wang Jun had some reservations about Tan Jincheng and had also lost some confidence in capital.

Startups controlled by capital are truly defenseless if they don't have a proper voting rights structure.

In less than a month, Tan Jincheng raked in a total of US$20.5 billion (before tax) through two mobile application management software programs!

His total investment in these two companies over the years was less than $1000 million. This return on investment stunned the entire investment community. While the internet was reporting on BA's extravagant spending, news about the investor behind them, Tan Jincheng, was also everywhere.

"I just realized that Boss Tan has taken a cut from all of BAT's."

Tan Jincheng is involved in all of the top three internet acquisitions in China. Tencent's $20 billion acquisition of MiTalk, while benefiting Xiaomi and Lei Jun himself, also brought huge profits to Tan Jincheng, who was behind the deal. He is Xiaomi's second-largest shareholder.

The "Mobile Application Month" in September and October made him a fortune, and his wealth soared.

BAT (Baidu, Alibaba, Tencent) has a large following, but it also has a huge number of haters, especially BT (Baidu, Tencent, and Baidu), whose reputations are not good. When Tan Laoban (a popular internet personality) attacked any one of the three, it can be said that he started a frenzy on the internet.

It wasn't just the internet; he facilitated two of the largest internet acquisitions of the year, earning Tan Jincheng a lot of exposure from the financial channel, which also arranged several interviews with him. However, Tan Jincheng has been genuinely busy lately.

Lei Jun was incredibly envious. Xiaomi was enjoying immense success this year, and he was almost certain to be selected as one of this year's Economic Figures of the Year. He had also given many interviews. However, he was genuinely envious of Tan Jincheng's sudden addition of $20 billion in cash reserves.

He was so envious that he wanted to launch another round of financing. In August of this year, Xiaomi completed its Series E financing, reaching a valuation of 10 billion US dollars, becoming the fourth largest Internet company in China.

The Series E funding round brought Xiaomi several international venture capital firms and laid a solid foundation for Xiaomi's internationalization.

Tan Jincheng didn't have time to pay attention to him.

He has formally proposed to the board of directors of Gaode to convene a shareholders' meeting. Prior to this, he had communicated with Chengwu many times about the privatization of Gaode. With the development of Gaode, this road data will inevitably cover every corner of the country in the future.

Data security issues are unavoidable in the future, and privatization and delisting from the US stock market are inevitable.

Cheng Wu was actually aware of this problem. The last time their competitors used this to attack them, it was already a close call. He also supported privatization, but in previous years, neither the company itself nor Tan Jincheng could come up with that much money.

Acquiring shares from institutions and ordinary shareholders is not something you can do by paying in installments.

Cheng Wu smiled helplessly, "Looking back now, going public on the US stock market was definitely a bad move. I even regret not listening to President Tan. But thankfully, President Tan managed to raise the money."

"You can't say that. At that point, things were on the verge of collapse, and you couldn't stop even if you wanted to."

October 18, 2013, the last working day before the Mid-Autumn Festival.

At the shareholders' meeting of AutoNavi, a resolution was passed that ByteDance, the controlling shareholder of Weilai Technology, would acquire all the shares of AutoNavi that it did not already own at a price of US$21 per American Depositary Share (ADS).

The total transaction amount was approximately US$11 billion, corresponding to an average price of US$15.74 over 20 trading days, representing a premium of 33.42%. However, the current share price of AutoNavi (ADS) has already soared to around US$17.

"Speaking of which, Baidu also quoted us a price of 6 million US dollars before."

After the shareholders' meeting, Cheng Wu jokingly told Tan Jincheng that he was very satisfied with the price. Of course, Baidu's offer of 6 million US dollars was not low, but it was quite reasonable.

"Haha, Li Dashuai is an interesting guy. He can be very generous when he's in a good mood, but sometimes he does some strange things. But this time, they're the ones who paid the bill."

Shocking! AutoNavi is being privatized, with internet giants BAT (Baidu, Alibaba, and Tencent) footing the bill!
This news headline appeared on UC News on the day of the Mid-Autumn Festival and was subsequently widely disseminated among major media outlets.

In Q2 of 2013, Gaode Maps had a market share of 31.3%, while Baidu Maps had 24.4% (Tencent was 7th with 2.4%). In Q3, Gaode Maps' market share remained at 31.3%, while Baidu Maps' share rose to 26.6%.

If Lao Li were as generous as he is with 91 Assistant, Gaode would have been taken over by him, and even if Tan Jincheng had priority, the price of 11 billion US dollars would not be enough.

(End of this chapter)