2003: Starting with Foreign Trade

Chapter 795: Are you trying to sow discord between me again?
$19 billion, $15 billion, $11 billion—these figures are so glaring.

In 2013, when clickbait headlines weren't as prevalent, UC's sensationalist style was still quite damaging. However, to be fair, news media these days are generally more objective.

Currently, UC has not been sold to Ali and is still under the control of He Xiaopeng.

By the way, UC was also invested in by Lei Jun. He invested 400 million yuan in the angel round, accounting for 20%. Lei Jun and He Xiaopeng have a very good relationship.

Privately, Tan Jincheng had also dined with Boss He a few times, all of which were brought by Lei Jun.

During the three-day Mid-Autumn Festival holiday, these three sets of figures kept stimulating people's nerves. Three post-80s entrepreneurs, especially Tan Jincheng, were in the limelight.

The major companies involved in the related transactions are all publicly listed companies, and their data is publicly available. It is very easy to understand the details of the transactions, especially since both BA and BA held press conferences.

No matter the era, wealth is always the most impactful thing for people's hearts.

The three individuals, all born in the 1980s, with the oldest being only 31 years old this year, saw their net worth skyrocket after a single transaction. The smallest increase was nearly one billion yuan, while the main investor's net worth surged by over 10 billion yuan.

But what shocked everyone the most was Tan Jincheng's plan. The $20 billion hadn't even arrived yet, and he immediately spent it all to privatize AutoNavi.

Making money is like scattering water, and spending money is just as easy.

"Haha, actually it didn't really cost $11 billion. Gaode still has $5.1 million in cash and other equivalents in its accounts."

In total, it only cost a little over 5 million yuan. There is also a hidden benefit: Gaode still owns 10% of Didi's shares, which will be a considerable amount in the future. Privatizing Gaode is definitely a very worthwhile thing.

“The underlying data of maps will play a very important role in future enterprise services. It is very important for both Weilai Auto and Orange Technology, and even for Flash Electric Vehicles. This is why we want to invest in AutoNavi.”

After the National Day holiday, the financial channel finally managed to arrange an exclusive interview with Tan Jincheng. Tan Jincheng has been a celebrity in recent years, frequently interviewed by official media, and he also spends a considerable amount of money on advertising on CCTV every year.

Therefore, the relationship between the two is quite good. Tan Jincheng usually agrees if he has time. Besides, he was the one who helped arrange the red envelope distribution on WeChat during this year's Spring Festival Gala. Wei Lai has been placing car models in the Spring Festival Gala stands for two consecutive years.

In recent years, Tan Jincheng has rarely accepted media interviews. Apart from formal events where the media can catch him to ask a few questions, he basically does not accept media interviews in private, nor does he participate in entrepreneurial variety shows like some other entrepreneurs.

The internet is full of news about him, but it's rare to see him make any public statements. In most cases, he mainly promotes his own company's products.

This interview with the financial channel focused more on Gaode's future and its importance to the company's business. This was also a way of promoting Gaode. Whenever BAT (Baidu, Alibaba, Tencent) gets involved, other companies will not have an easy time.

Baidu Maps is clearly making a strong push right now. Although Tencent's market share is small, it depends on whether they want to or not. If they do, they can quickly expand their market share. There's also another company that was snatched away by Tan Jincheng, and it's still unknown when he'll be eliminated.

Given Ma's personality, he will definitely acquire another company, but who knows which one it will be.

Tencent, on the other hand, doesn't seem to have much interest in maps, giving the impression that it's fine as long as it has enough of its own tools, which seems to be the case in its previous life as well.

Gaode Maps holds a significant strategic position in Tan Jincheng's business. Not to mention the new businesses he has developed himself, the map service alone is enough to connect Weilai Auto, Flash Technology, and Orange Technology.

Two-wheeled electric vehicles can also be made intelligent, and map services play a significant role in this intelligentization process.

In fact, FlashTech's electric vehicles are already far ahead of their competitors in terms of intelligent technology. Some of the lower-end technologies derived from the research and development process of Weilai Technology are used in FlashTech's electric vehicles.

There is actually a lot of cooperation between the two technical departments. Tan Jincheng's idea is that, just like the recycled materials in the production workshop should not be wasted, the technology that seems outdated in automobiles may not be so useful in two-wheeled vehicles. If it can be used, then it should be used.

Domestic journalists are basically used to Tan Jincheng's tactics. Whenever he gives an interview, they will be forced to promote his products, no matter how high-level the media is.

Reporters were somewhat helpless against this shameless mentality, but they had no choice but to accept it, even the state media.

There's nothing we can do; the data usage is just too high.

Every year, every industry has some prominent figures who are in the spotlight and become the talk of the town throughout the year.

But Tan Jincheng is like an anomaly. He is very low-key, but he can make a big splash every year and attract a lot of attention. There are not many entrepreneurs like him who can always maintain their popularity.

It seems that only Jack Ma from Ali's Pony Ma can rival his popularity, but it should be noted that Jack Ma's popularity in Ali's Pony Ma was built up through numerous interviews, speeches, and the massive traffic generated by the Taobao system, something Tan Jincheng did not do.

To be honest, Tan Jincheng's style is somewhat similar to that of Ma Huateng of Tencent in recent years; he avoids interviews unless absolutely necessary.

The layman looks at the excitement and the insider looks at the doorway.

Ordinary netizens are focused on how much money these three post-80s generation individuals have made through mobile applications. Of course, many people also only learned this time that mobile applications such as 91 Mobile Assistant and Wandoujia were invested in by Tan Jincheng.

Tan Jincheng has a president's office, and Zeng Jixiang is the general manager of the president's office. With such a large amount of attention generated by these two major acquisitions, the president's office certainly cannot afford to miss it.

Through the acquisition, the president's office effectively educated netizens about all of Tan Jincheng's products, from physical brands to internet products, providing a comprehensive overview and serving as a good promotion for the company's offerings.

The companies that Tan Jincheng has invested in, such as ByteDance and 36Kr, are unlikely to miss this opportunity to promote themselves.

From September 16th until the end of October, Tan Jincheng was constantly in the news during the privatization process of Gaode Maps. Behind these news stories were more about the changes in the map industry.

In the current internet map market, Mapbar, Sogou, and Google each hold approximately 9% of the market share, with very close gaps. Following closely behind Baidu Maps and Gaode Maps, Tencent Maps holds slightly more than 2%, while other large and small companies account for about 5.6% of the market share.

Of the three BAT companies, Baidu has the biggest advantage, and Tencent also has its own territory. The difference lies in whether they exert their efforts or not. Gaode was privatized by Tan Jincheng and can no longer be Alibaba's prey.

Besides Google, Sogou is also owned, leaving only Mapbar, whose shareholders are IDG and Chen Yizhou.

Founded in 2004 and supported by NavInfo's new technology, Mapbar, which holds a 9.3% market share and ranks third, has become the most valuable map company to acquire in the market. If Ali wants to enter the internet map market, Mapbar is the best acquisition target.

However, it's not so simple for Ali to make an acquisition. Whenever Ali wants to do something, Tencent will try to stop him, and vice versa.

Who knows if Tencent will interfere and cause trouble if Ali launches an acquisition?

After all, if Tencent completes the acquisition of Mapbar, their market share will directly approach 12%, firmly securing their third position, which would also benefit Tencent.

Furthermore, IDG's relationship with Tencent is quite special.

Chen Yizhou has been grinning from ear to ear these past few days. He can't wait for Tan Jincheng to complete the privatization as soon as possible, so that they can have the best of both worlds.

It's almost obvious that Ali wants to get involved in the map market. According to Chen Yizhou, Ali has never given up its covetousness for Gaode, even after Tan Jincheng became Gaode's largest shareholder.

Both Baidu and Alibaba have attempted to acquire AutoNavi. Baidu even submitted an offer, while Alibaba, despite not publicly disclosing its offer, would certainly have offered a high price given its deep pockets.

But I don't know why Cheng Wu refused, maybe it was because of Tan Jincheng?

Chen Yizhou guessed correctly. Baidu was never within Gaode's consideration, but Ali might be a possibility. Tan Jincheng had tried to sow discord between Cheng Wu and Ali by listing the performance of each company after Ali acquired it.

Ali's acquisition strategy has always been exactly the same: after completing the acquisition, send in senior executives to take over, de-emphasize the founder, and then the company continuously injects funds into Taobao and Alipay until it slowly disappears.

This is Ahri's domineering nature, but also Ahri's helplessness. Chengwu was able to make Gaode Maps the number one in the market, so it's impossible that he didn't understand Ahri's tactics.

Introducing Ali (a popular Chinese fox spirit) can indeed enable a company to develop rapidly in the short term, but this comes at the cost of sacrificing the founder's control and the company's future viability. It is up to the founder to decide which aspect is more important.

Cheng Wu hadn't yet given up on his entrepreneurial endeavors, and with Tan Jincheng constantly trying to sow discord between him and Ah Li, he naturally rejected the idea outright.

The privatization of Gaode Maps does not mean that it is a wholly-owned subsidiary of Weilai Shares, but rather that it exists in parallel through the holding of ByteDance Engine.

In addition, Tan Jincheng also promised that after the privatization of AutoNavi was completed, Tan Jincheng would give him 5% of the shares, and another 10% of the shares would be used for future employee equity incentive plans.

Based on the current valuation of $15 billion when AutoNavi was privatized, this is a considerable fortune.

It exists independently and in parallel, is offered shares, and there is a possibility of relisting in the future, not to mention the possibility of further capital investment. This treatment is absolutely unbeatable.

Whether you are acquired by Ali at a high price and then kicked out, or you have been working hard from beginning to end, hesitating for even a second is disrespectful to yourself.

On October 31, 2013, local time, AutoNavi Holdings issued an announcement stating that, with the approval of Nasdaq, ByteDance Investment Co., Ltd. completed the privatization process of AutoNavi Holdings, making it a wholly-owned subsidiary of ByteDance Investment Co., Ltd.

At the time of the announcement, AutoNavi Holdings also ceased to be a listed company and delisted from Nasdaq. AutoNavi Holdings (ADS) stock price was fixed at $20.90, just a hair's breadth away from the privatization price of $21.

On July 1, 2010, AutoNavi Holdings became the 145th Chinese company to list on NASDAQ. On the last trading day of October 2013, after its privatization plan was approved by a shareholders' meeting and NASDAQ, it officially delisted. In less than four years, AutoNavi completed a remarkable transformation, listing as a navigation electronic map content provider and delisting as a wholly-owned subsidiary of ByteDance's mobile internet division.

At the time of its IPO, AutoNavi's market capitalization was around $900 million, while at the time of its delisting, its market capitalization was less than $15 billion. Based on the $15 billion figure, its market capitalization increased by more than 60%.

Among the many Chinese concept stocks, AutoNavi is not particularly outstanding. Its growth rate in the more than three years since its listing is not particularly impressive, but its annualized return of over 20% is still worthy of the trust of investors.

Unlike Alibaba, which has a significant market capitalization at the time of its IPO and delisting, this company's strategy is designed to impact investors' interests.

After being delisted, Gaode still has a lot of assets left behind, but the road ahead is not smooth. With the intensification of competition with Baidu Maps, Gaode's expenses have increased significantly, leading to Gaode's first loss in the Q3 fiscal quarter.

In Q3, AutoNavi suffered a loss of US$670 million, compared to a profit of US$1010 million in Q3 2012. Even in Q2 of this year, AutoNavi had a net profit of US$380 million.

In addition, Gaode's marketing expenses increased by more than 1.5 times year-on-year and more than 75% quarter-on-quarter, while R&D expenses also increased by 82% year-on-year and 37% quarter-on-quarter. However, total revenue declined slightly both year-on-year and quarter-on-quarter.

Gaode, which is undergoing transformation, has poor financial reports, and this situation is expected to continue to worsen. This is one of the reasons why Chengwu and Gaode's management agreed to delist. If the financial reports are not good, then the stock price will naturally not be good either.

Shedding the burdens of financial statements, focusing on a clean slate and honestly transforming and developing the business, and then going public after the financial statements are in better shape is also a viable option.

Leaving aside capital and strategic considerations, from a purely business perspective, Gaode has a promising future. Gaode has a very high market share, but the corresponding costs are also very high.

Tan Jincheng's view of Gaode Maps is not to make money from it, but rather to value its utility as a tool.

The only requirement for Chengwu and Gaode's management was to reduce costs. Navigation software needs to continuously collect map data, which involves surveying qualifications, base map acquisition, satellite positioning, and other aspects, resulting in exceptionally high operating costs.

The biggest difference between ordinary navigation maps and high-precision navigation maps lies in their cost. Ordinary navigation maps are drawn at the decimeter level, costing an average of only 10 yuan per kilometer, while high-precision maps are drawn at the centimeter level, costing an average of 1000 yuan per kilometer.

Besides its core map navigation business, Gaode's most promising business right now is its ride-hailing service. However, Gaode's ride-hailing service is somewhat of a middleman, as it uses data collection and distribution to send orders to ride-hailing apps such as Kuaidi and Didi.

The earnings are definitely not as high as those of legitimate apps, but the costs are also much lower. You don't need to maintain your own drivers, and it's also safer in terms of regulation, so it's kind of skirting the edge of the law.

Map navigation software also has its own advantages in this regard. Tourists or users who are unfamiliar with the roads will definitely open the map navigation software as soon as they arrive at a place, and many people will also use it to hail a taxi.

Correspondingly, it could also expand into the local services sector, but the competition in the local services sector is too fierce. There are already Meituan, Dianping, and so on, and in the future there will be Douyin. Theoretically, Tan Jincheng is not very willing to do it.

At least Gaode, which doesn't want to invest heavily and isn't associated with Ali (Ali), could actually streamline its business operations further.

Map navigation and ride-hailing services are Gaode's core businesses right now; they should focus on doing these two businesses well first.

"In fact, as a good provider of basic navigation services, we have great potential in the future internet field because our advantages are more obvious. At least we are much less of a threat than Baidu."

Tan Jincheng has been working in Beijing recently. The privatization of a listed company involves a lot of work and is not as simple as just buying it with money.

In this privatization of AutoNavi, ByteDance used cash payments and did not involve any equity transactions, making it relatively simple. As for the equity division in the privatization, that's a matter for later.

"That's true. Although Tencent's maps aren't great, they definitely won't use Baidu's. If Ali's acquisition fails, they will definitely turn around and choose to cooperate with us."

Cheng Wu also agreed with this point. The businesses of BAT are complex and intertwined, and it is unavoidable that they have business dealings with each other, but they are definitely wary of each other in their core sectors.

This is also the reason why Tan Jincheng allowed Gaode to maintain its independence.

Tan Jincheng chuckled: "You're familiar with Siwei's side, so you can cause some trouble there. I'll also cause some trouble for Brother Ma's side, to make things a bit more difficult for Ali."

In his previous life, Gaode was not profitable for many years, but after truly getting to know it, Tan Jincheng realized that it was not impossible to make Gaode profitable.

In its previous life, Gaode's business was a mess, getting involved in all sorts of gadgets, but it didn't make any money at all. Secondly, there was the management of Ali, which anyone in the internet industry understands.

After Gaode was privatized in his previous life, Chengwu basically retired. Ali sent his own management team to take over Gaode's business. Given their tendency to make complicated things, it would be a miracle if they could make money.

Once a tool-based software reaches a certain number of users, it should focus on providing its core service. Gaode Maps can be positioned as a platform tool similar to payment software. How could it not make money by leveraging its advantages in map navigation to act as a middleman?
Isn't that how a certain group operates?

"Haha, boss, you're really wicked. It seems the rumors circulating online about your feud with Ali Ma are not unfounded."

Chengwu was stunned for a moment, then realized what was going on.

"Haha, that's all nonsense. I just want to help you get a potential big client. If their acquisition fails, they'll have to turn to us for cooperation. We'll relax the terms a bit, and I don't believe we can't make money off them."

Currently, the only map service software worth acquiring is Map8. Ali said that they have no other choice unless they want to develop a new one themselves, but that is simply not realistic.

While IDG and Chen Yizhou are the key figures on the Tuba forum, their technology is entirely derived from NavInfo. Without NavInfo's technical support, Tuba is practically worthless.

Siwei is a national team, so if they are interested in acquiring Tuba, Lao Ma will have to think twice.

Of the three BAT companies, only Ali doesn't have a map service provider. Currently, they cooperate with this company a little bit here and there, but they cooperate more with Gaode.

"Haha, it's a bit unethical, but it's worth doing. I'll contact Siwei and invite them out for dinner soon. Boss, you can attend if you're interested."

"Okay, go ahead and make the appointment. I'll make an appointment with Chen Yizhou first and have a chat with him."

This Chen Yizhou is not the internet celebrity Chen Yizhou, but an internet celebrity who was a classmate of Lei Jun (CEO of Xiaomi), served as the vice president of Sohu, founded several well-known websites, and worked with Wang Xin at Renren.com.

Tan Jincheng was also part of his circle of friends. This internet celebrity's biggest characteristic was that he was very good at selling things. In the PC era, all the websites he created eventually found a suitable seller, and he himself made a fortune.

This approach is quite similar to Tan Jincheng's investment in software such as 91 Assistant and Wandoujia, except that he develops them himself and sells them without hesitation.

In 2000, he sold the website he founded to Sohu for $3000 million.

Selling the map wouldn't be a burden for him at all.

"Should we join the competition too?"

"Let's give it a try. If the price is right, we can buy it. After all, Mapbar has a market share of nearly 10%. If the price is right, we can secure our position as the number one in the market in one go."

Tan Jincheng would certainly be happy to see a market share exceeding 40%, provided the price is right.

Of course, Tan Jincheng's involvement at this point wasn't out of genuine interest in buying. Regardless of whether it could pass the 4D ultrasound test, the current price on Tuba, which became Ali's only option, is definitely inflated.

Cheng Wu nodded: "Gaode has more than 5 million US dollars in its account, so it is indeed worth talking about. Whether it works out or not, it won't hurt us."

"Okay, let's get started. I'll inject $5 million into Gaode to boost your cash flow. The rest is up to you."

The expected $11 billion privatization budget has not been spent, leaving tens of millions. The funds obtained from Baidu and Ali were not of much use to Tan Jincheng, so injecting another sum into Gaode is also a way to appease Gaode.

In 2013, the internet has basically entered an era of monopoly, and there are not many good investment projects left. ByteDance's future investments will continue to lean towards the real economy and the secondary market.

The A-share market has not performed well this year, but starting next year, the Shanghai Composite Index fell to a low of 1849 points in June and is currently hovering around 2000 points. However, Jin Cheng knows that starting next year, there will be a magnificent bull market.

Spending more than half a year investing in A-shares can yield returns comparable to those in the internet industry, with many stocks offering tenfold returns.

Since November, Lao Ma's eyelids have been twitching.

The usually low-profile Ma Huateng has been making high-profile contact with IDG executives. In addition, news from Beijing indicates that AutoNavi President Cheng Wu has also been frequently in contact with 4D executives.

Tan Jincheng, who has been staying in Beijing for several months, has recently been photographed frequently dining with Lei Jun and Chen Yizhou, and the three seemed to be having a pleasant conversation.

"Damn, are these two planning to acquire Tuba?"

Tencent has both the capability and the motivation, and so does the ambitious Tan Jincheng. It's worth noting that the competition between Gaode and Baidu is extremely fierce. Once they acquire Mapbar, the outcome will be clear.

Oh, right, there's also Baidu; damn it, why is everyone trying to sabotage me?

(End of this chapter)