2003: Starting with Foreign Trade

Chapter 878 Let's broaden our horizons!
The gathering organized by Boss Tan on National Day was very low-key and not many people knew about it.

However, in the following two days, Tencent Investment, Sequoia China and Qiming Information successively appeared in Ningbo, and Cheng Wu, CEO of Gaode Maps, was also photographed on a flight from Beijing to Ningbo.

It's hard to keep such unusual personnel movement a secret any longer.

However, the first to react was not the media, but Ding Sanshi, who was celebrating the festival in his hometown. After learning the news from people at the airport, he rushed from his hometown of Fenghua to Beicang.

They went straight to Tan Jincheng's house.

"Holy crap, you guys are all here. What big thing is Xiao Tan planning now? Count me in!"

Although we don't know what happened, considering this young man's recent schedule and looking at Tencent's Ma, Shen Nanpeng, and others who were smiling at him, we can see that...

And Lu Qi, who surprised him greatly, made him realize that something big was about to happen.

This big event is clearly not just about Lu Qi joining Orange Technology.

"Well done, kid. You've got some skills. It's not easy to get President Lu's approval."

Ding Sanshi looked at Tan Jincheng with admiration. He got along quite well with this young man and admired him very much.

Compared to the deep business cooperation between Tan Jincheng and Xiao Ma, his company did not have much business dealings with Tan Jincheng, and their personal relationship was more purely platonic.

This is why he dared to barge into Tan Jincheng's house without even giving prior notice.

"Hehe, it's all thanks to the seniors for their kindness."

The world of martial arts is full of interpersonal relationships and social customs. Although the internet is a new industry that is different from traditional industries, seniority and hierarchy are just as important as in the physical world. In many cases, it's not just about having money.

If they don't like you, they just don't like you. Besides, these big shots who have been famous for a long time are all rich.

It wouldn't be modest of him to say that the seniors were too kind; he only needed two in-depth conversations to convince Lu Qi, which certainly required a bit of luck.

Like its physical businesses, Orange Technology is an outlier in the internet industry. While all other companies are lending money, Orange Technology has stuck to its original principles.

Countless young people are trapped in the consumer trap. He is powerless to change the overall environment, but with the resources he has, he can do something to give BAT (Baidu, Alibaba, Tencent) and traditional physical enterprises a shock.

Zhang Yiming's ByteDance has made traditional internet giants tremble, and he also wants to give traditional enterprises a boost in the field of artificial intelligence. He doesn't understand the technology of artificial intelligence, but he knows the direction of artificial intelligence.

For example, he had some understanding of models and training strategies, as well as hardware and software collaboration and cost control ecosystems in his previous life. With the top-notch resources he can now access, his thinking is much clearer than that of the average person.

With the help of a tech expert like Lu Qi and his extensive network of contacts, Tan Jincheng had reason to believe that Lu Qi would be able to achieve some success in the field of artificial intelligence.

"President Lu must have his reasons for choosing you over Lao Li. You don't need to be overly modest. President Ma is probably quite jealous right now, isn't he?"

Little Ma curled his lip: "Aren't you jealous? If President Lu said he wanted to go to your place right now, you'd probably be happy even if President Tan broke your head, right?"

"Haha, we're all in the same boat. By the way, Xiao Tan, aren't you afraid that handsome Li will challenge you to a fight?"

"Alright, everyone, stop making fun of me. I'm not as awesome as you think."

Lu Qi felt a little embarrassed by the praise from several internet tycoons.

"Haha, Mr. Li looks so refined, it's not that bad, Brother Ding, you're just being petty."

"Oh? He's refined and elegant, but you haven't seen what he looked like back then."

That said, these internet elites weren't exactly good people when they were young. They did all sorts of things, from drinking and partying to fighting. Zhou Hongyi, known as an internet hooligan, had a dirty history with Baidu back in the day.

The two sides even went to court over this. After leaving the courthouse, Lao Zhou and Lao Li started arguing right outside the courthouse. Lao Zhou immediately challenged Lao Li to a fight.

As a result, Old Li didn't hold back either, taking off his suit and starting a fight.

"No, no, you're overthinking it, brother."

Lu Qi didn't sign a contract with Baidu, nor did he promise Li Yanhong anything, so why should he hold a grudge?
Besides, so what if there's resentment? Baidu is currently overwhelmed by the medical incident on Tieba. To be fair, they're quite abstract; the first thing they did with AI was to use it in internet hospitals.

They created some kind of AI-powered online consultation service, which allowed Putian hospitals to become very popular online. What's that saying again? "XX Consultation, cancer diagnosis is the starting point!"
"Alright, let's not talk about this anymore; can you tell me what big thing you're planning? Can I come along for some soup?"

2016 was definitely a shining year for NetEase. Its stock price soared, Ding Lei's net worth doubled, and the newly launched anime game Onmyoji became a hit. By the way, Tan Jincheng had played this game in his previous life.

The gaming business is developing smoothly, and Pig Farm has also made great strides in cloud services. In the first half of the year alone, it launched cloud platforms and cloud service businesses including CloudX, Hive, and Qiyu.

In addition, there have been significant breakthroughs in online education services and music, especially in music, where they have broken through Tencent's blockade, which is quite remarkable.

Tan Jincheng glanced at the group, but none of them showed any reaction. Clearly, he didn't care about Ding Sanshi's involvement; in fact, his participation would be more beneficial to the implementation of this restructuring plan.

"Sure, no problem. Bro, you sign a confidentiality agreement first. We've all signed them before, it's just a formality."

No one objected, and Tan Jincheng was happy to do a favor. As one of his benefactors, Ding Sanshi had helped him a lot and had even promised to let him invest in Dingding back then.

In retrospect, he has broken his promise. This secondary listing of Orange Technology can be seen as an indirect response to his promise from back then.

"Wow, this is so formal."

Old Ding picked up the confidentiality agreement, glanced at it, and signed it without finding any problems. The confidentiality agreement was nothing special; it simply stipulated that no response or report could be made regarding Orange Technology's secondary listing before the official launch of the IPO.

"Reorganizing Dingding, Gaode Maps and TiMi Studio, what a big move. It seems that Orange Technology is about to undergo a strategic transformation."

A brief assessment reveals that this is a restructuring plan worth nearly 400 billion yuan. Currently, Orange Technology's market value is only 460 billion yuan, which is equivalent to re-injecting a listed company. Once this plan is announced, it will inevitably become one of the biggest internet events between 2016 and 2017.

"Speaking of which, this is Orange Technology's third transformation, isn't it? You really know how to stir things up."

Orange Technology was originally a small internet company based on social networking sites and social mini-games. It made some money and accumulated a user base by riding the wave of the PC era. However, if it had not transformed into a vertical e-commerce company and incubated Orange Products Club internally, it would have eventually become just another ordinary company.

Afterwards, by poaching Sun Tongyu, OrangePin was put on the right track. Through a series of marketing strategies, OrangePin gradually grew until it became a leader in vertical e-commerce.

However, in the past two years, vertical e-commerce has encountered growth bottlenecks and is no longer as popular in the capital market. Orange Technology's development has also entered a period of stagnation. If it weren't for the two major traffic entrances, WeChat and QQ, Orange Products' development would not have been so smooth.

However, this also puts Orange Technology under Tencent's control. Currently, Tencent holds 15.17% of Orange Technology's shares, making it the second-largest shareholder.

If Orange Technology doesn't transform, it will forever be subject to Tencent's control. If Tencent wants to continue increasing its shareholding and become the largest shareholder one day, even Tan Jincheng might not be able to do anything about it.

"Damn, this kid is really decisive."

Ding Sanshi's mind worked quickly. He quickly figured out the key to Orange Technology's restructuring plan: getting rid of Tencent's potential threat was one of the key factors.
The restructured Orange Technology is no longer limited to vertical e-commerce, but is a technology company integrating vertical e-commerce, games and Internet infrastructure services. The all-in strategy of artificial intelligence has also set the future strategic intentions for the new Orange Technology.

If successful, Orange Technology will hold a pivotal position in China's technology sector and will also be able to escape the potential threat from Tencent.

Failed? What will happen if we fail?

"Even if we fail, it will only mean a temporary deterioration in our finances. With the support of our two major cash flows, Orange Technology can't possibly be worse off than it is now."

"That's true, no problem. I'll invest in this project, any amount is fine, I'll just get a share."

"Hehe, then thank you for the tip, Mr. Ding. Let's talk about the details."

The valuations of TinyMedia, Gaode Maps, and TiMi Studio are not problematic. There are professional appraisal agencies to confirm them. According to their rough estimates over the past two days, TiMi Studio can be valued at around 12 billion US dollars.

The combined value of the three is between US$55 billion and US$6 billion, accounting for about 80% of Orange Technology's current market value.

It's not quite a case of a snake swallowing an elephant, but it is certainly a mega-scale restructuring plan.

Old Ding guessed correctly. Besides wanting to go all in on artificial intelligence, a large part of Tan Jincheng's restructuring of Orange Products was to get rid of the potential threat from Tencent. Although the two sides are cooperating well now, who knows what the future holds?

Over the years since its listing, Orange Technology's shareholder list has undergone several changes. Although Tan Jincheng remains the largest shareholder, his shareholding ratio has dropped to 29.43%.

Tencent is the second largest shareholder with 15.17% of the shares, Sequoia China is the third largest shareholder with 6.12% of the shares, and Qiming Information is the fourth largest shareholder with 5.27% of the shares.

On the surface, Tencent, together with the other two major shareholders, only holds 26.56% of the shares, which is far less than Tan Jincheng's, and their voting rights are even less significant.

However, it's important to know that Dongzi also holds a 0.73% stake in Orange Technology. These two companies have always been allies, and if they both increase their holdings and join forces with some smaller shareholders, they could very well become the largest shareholder.

After Tencent's private placement, Tan Jincheng's shareholding decreased to 27.76%. There were some share buybacks when the stock price plummeted. Tencent's shareholding was also increased during that period, as was Dongzi's shareholding.

Although they can't take control, if they really let Pony Ma become the largest shareholder, wouldn't they be working for him?
It is impossible to work part-time!
Including the shares held by Dongzi, the five major institutions collectively hold 56.72% of Orange Technology's shares. This alliance of interests has allowed Orange Technology to maintain stable development. Tan Jincheng's attempt to break this alliance and gain absolute control of Orange Technology is not as easy as he imagined.

Given that Orange Technology is undergoing a major transformation, getting stakeholders to relinquish some of their profits will require multi-party coordination and negotiation.

"The injection of two core strategic businesses and a cash cow is my greatest sincerity. In addition, I can make some concessions on the valuation, provided that I have absolute control over Orange Technology."

"There is no room for negotiation on this point. I would never inject these three major segments into the existing listed company system if I could not achieve absolute control."

“I could easily merge these three companies into a new one and list it on the Hong Kong Stock Exchange. Although the valuation might not be very high, it would at least be a feasible plan, wouldn’t you agree?”

Ding Sanshi crossed his arms and crossed his legs, watching Tan Jincheng talk eloquently like an observer.

I knew this kid wouldn't give up his controlling stake.

Currently, Orange Technology's total share capital is 9900 million shares. Injecting these three major segments into the listed company's system will inevitably increase the total share capital. Obviously, Tan Jincheng's intention is to use a private placement to make most of the newly issued shares belong to his own name.

Shen Nanpeng and Kuang Ping remained noncommittal. They appeared on Orange Technology's shareholder list primarily as financial investors and had no interest in, nor could they possibly be, in control.

More shares mean more profit, but they also know Tan Jincheng's personality; once he makes a decision, it's extremely difficult to change his mind.

If you push him too far, he really could merge the other three companies into a new company and list it on the Hong Kong Stock Exchange. The consequence of doing so would be the potential loss of Lu Qi, which is probably what he is most worried about right now.

The only thing they can do is mediate and balance the interests of themselves, Orange, and Tencent.

Pony Ma frowned. Tencent's external investments have always been successful.

With his social empire, it's no exaggeration to say that he can have as many shares as he wants. Take a food delivery website as an example, a certain company that took the initiative to invest has already acquired nearly 20% of his shares.

Pinduoduo, a rising star in the online e-commerce industry, has seen its shareholding reach 18.5% after completing its Series B financing in July. Its advantage in traffic entry makes it virtually invincible.

However, faced with this once-in-a-lifetime opportunity, Pony Ma felt for the first time that their advantage in traffic entry points was not so obvious, and things were not quite as he had imagined.

"I knew it wouldn't be so simple for President Tan to incorporate these three golden eggs into Orange Technology."

What does artificial intelligence need? Computing power, users, and data. Computing power can be compensated for with money, but without the listed company entity, Tan Jincheng will find it very slow to fully utilize the user and data resources.

However, Orange Technology is ultimately under his control. If the other party doesn't play by the rules, they have no recourse other than to file a lawsuit or report it to the SEC and the Securities and Exchange Commission.

After gaining fame and social status, Tan Jincheng became much more disciplined over the years, but one cannot assume that Tan Jincheng will always abide by the rules.

What can the other party do if they secretly take the listed company's data to support the "new company"?
They've done this kind of thing quite often before: copying ideas from smaller companies, then using their scale advantage to grow themselves. Even if they lose a lawsuit, they're still considered to have won.

With a sigh of relief, Little Ma said, "I can only accept a maximum of 51% shareholding from you, Mr. Tan."

Thank goodness I haven't gone back yet. If I had left, the people in the investment department might not have been able to handle the powerful Tan Jincheng.

Seeing that Tan Jincheng was about to say something, Brother Ma quickly stopped him, saying, "Let me finish first."

“I didn’t say 33%, which shows my sincerity. 51% may not be what you expect, but we’ve been working together for so many years and the process has been very pleasant, so we can continue to work together.”

Tan Jincheng nodded, agreeing with this statement. The two sides had been cooperating fully for seven or eight years, and in addition to in-depth business ties, their core suppliers were even the same company.

"We understand that Mr. Tan has high requirements for control and shares due to corporate security considerations, but there is no need to demand so much. 51% is already enough. Asking for more would just mean a greater financial investment."

"Most of the shares issued through private placement can go to Mr. Tan and the companies you control, that's fine, but please leave some for us as well."

Upon hearing this, even Ding Sanshi, who was sitting with his legs crossed, agreed. If given the chance, who wouldn't want to take more shares?

If Tan Jincheng orders a little less, they can get a little more.

They might lose a small percentage of the $70 billion stake in a vertical e-commerce company, but the future valuation of a successful artificial intelligence company would be entirely different.

Even a conservative estimate would put it at a valuation of between $15 billion and $30 billion, making it a leading company with a valuation exceeding 100 billion.

“I know that Orange Technology will not lack traffic in the field of artificial intelligence after the transformation, but Orange Products and Honor of Kings also need traffic support. With our traffic entry point, including Honor of Kings esports events, we can develop better.”

"In addition, each of our companies has accumulated some expertise in artificial intelligence. If Mr. Tan can accept my proposal, the three of us can definitely engage in in-depth cooperation in the field of artificial intelligence."

Ding Sanshi's eyes flickered: "Data sharing? Open platform?"

Lu Qi, who hadn't said much, also had a glint in his eye: "Similar to the Android Alliance?"

He became somewhat excited after speaking, and looked at Tan Jincheng with eager eyes.

The biggest problem among companies is their closed ecosystems. Everyone jumps on the AI ​​bandwagon, each guarding their own little corner, resulting in products with obvious flaws and a huge waste of resources.

If he could create an open-source, alliance-based AI platform, Lu Qi could already imagine how influential it would be worldwide.

Boss Tan wasn't completely clueless: "Does this mean the three of us can share resources and jointly develop artificial intelligence?"

The so-called data sharing is definitely only a partial sharing of data, which doesn't even need to be mentioned. But even so, it is still a huge improvement for this AI platform that has not yet appeared.

Tan Jincheng really didn't expect that Brother Ma would have such a broad perspective. It felt a bit unbelievable that he would say such a thing. Damn it, he's the kind of person who blocks sharing links at the drop of a hat.

What if the newly developed AI platform was positioned from the beginning as something like the Android Alliance, capable of technical compatibility, open platform interfaces, and attracting third-party manufacturers and developers to co-build the ecosystem?
If we succeed, the user base will definitely explode!

At that time, Baidu will really be in danger! Old Li, Pony Ma's real intentions are not what they seem.

"That's right, that's pretty much the idea. I hope Mr. Tan understands."

Both Little Ma and Ding Sanshi breathed a sigh of relief. To them, Boss Tan, who couldn't even write a single line of code, was practically a complete novice when it came to technology.

They weren't afraid to talk to Tan Jincheng about interests and investments; they were just afraid he wouldn't understand the technical aspects.

However, Tan Jincheng's understanding of artificial intelligence seemed to be deeper than they had imagined, which reduced a lot of trouble.

"Sure, no problem. Mr. Ma, you've been so kind. If I didn't agree, it would seem petty of me. I agree to 51%. As for data sharing, I don't know anything about that, so I'll leave it to Mr. Lu."

"If we can really work together to develop an open-source AI platform that is compatible with multiple platforms, the future market potential is unimaginable. At that time, we will be pioneers in the field of technology."

"You two can finally shake off that stigma of only using games to fleece people."

Ding Sanshi rolled his eyes: "You don't need to say the second half of your sentence, but that just means we'll have to get involved even more."

The ideal is wonderful, but the road to success is also very difficult. Both Little Ma and Lao Ding hope to get a piece of this lucrative business, but they are unwilling to bear the risks if they were to do it themselves.

Now that Tan Jincheng is willing to do this, all they need to do is cooperate, share some benefits along the way, and if they succeed, they can enjoy the fruits of their labor together; if they fail, the losses will be within a controllable range. Why not do it?

Another thing they greatly envied was that Orange Technology didn't have the factions that existed in their company.

Sun Tongyu's departure is a great loss for Orange Technology, but a great benefit for Tan Jincheng. His successor, Cheng Hao, is a founding member of the company, capable of maintaining the status quo but lacking in innovation.

Therefore, in certain major decisions, they have to rely on the prestige of Tan Jincheng and his wife to act. In addition, Gu Yanning, who was placed in the company, has also grown up, which is a kind of check and balance for Cheng Hao.

Tan Jincheng doesn't manage Orange Technology's operations, but he still enjoys absolute power. For example, during this transformation, he simply informed Cheng Hao that the company would be making a big move and asked him to cooperate.

It may seem disrespectful, but Boss Tan has always maintained this attitude. His absolute power gives him absolute prestige, and no one in the company dares to disobey him.

"No problem, then we can organize a negotiation team now, try to get it done as soon as possible, and then start planning as soon as possible."

Maintaining 51% control is Tan Jincheng's bottom line. As for the rest, let the negotiation team discuss it in detail. He can accept whatever outcome is reached. Since both companies can provide some data, even if there are some changes later, it will still be a profit for Orange Technology.

"You're really impatient; alright, I'll make a call."

Old Ding was a latecomer; the other companies' negotiation teams were already being assembled, so he also had to speed up a series of processes.

On October 8, the first working day after the National Day holiday, Orange Technology announced a major personnel change: Gu Qingqing, the former CEO who had previously stepped down from Orange Technology's management, returned to Orange Technology as Chief Human Resources Officer.

His administrative rank is Senior Vice President, and he reports directly to President Tan Jincheng.

The first step of the restructuring plan has begun!
(End of this chapter)