By Zhang Xin, edited by Yang Yang
Source: understand finance and Economics (ID: dudongcj)
Under the tuyere, Internet enterprises are stepping up the layout of live broadcasting business.
This transaction means a new starting point for both sides.
For Baidu, the live broadcast service can not only fill the short board of mobile content ecology, but also build a commercial closed loop of content, users and e-commerce, which is expected to revitalize the flow and improve the liquidity.
For happy gathering, globalization is the focus of the next stage in the context of the declining domestic live broadcasting business. Moreover, at present, its overseas business is developing rapidly. If it sells its domestic business, it can be loaded with ammunition and all in overseas.
In fact, gathering all in overseas may be the epitome of the development of most Chinese Internet enterprises. Consumer Internet is a wide range of competition, each giant in the original does not belong to their own territory, launched a new attack.
Moreover, from the perspective of the trend, the pattern of oligopoly competition in the domestic consumer Internet is becoming more and more obvious, which has shown the situation that the strong are always strong. This also means that the market space of non head Internet enterprises will be continuously squeezed. The overseas market, due to the immature development of the Internet, has a better competitive environment than the domestic market.
From this point of view, the sea going of Internet enterprises will become more and more common.
Baidu fans live
Since this year, Baidu's actions have been frequent on the live broadcast.
Subsequently, Robin Li personally for live broadcast business platform, in fan Deng Live Room talked about, in the future hope live broadcast can satisfy users' search needs in time. At the end of June, baidu mobile ecological business group completed the construction of live broadcasting platform, and Gu Feng, the former founder of Huya, became the person in charge of Baidu's live broadcasting business.
On November 17, baidu announced another $3.6 billion acquisition of YY. This is the biggest acquisition of Baidu so far, which shows that Baidu attaches great importance to the live broadcast business. The reason why baidu has to do live broadcasting is very simple.
First, YY can make up the last piece of puzzle of Baidu mobile content ecology.
Despite AI's support, the core of Baidu's business is still content distribution, which aggregates diverse content to attract users, so as to bring traffic and generate revenue for itself.
However, for Baidu, it is more and more difficult to obtain content. In the era of PC, search engine is the only access for users to obtain information. In the era of mobile Internet, microblog, wechat, xiaohongshu and other super apps have become new information portals. Moreover, these apps usually do not open content interfaces to the outside world, and the quality and quantity of Baidu content distribution are challenged, and users also flow to vertical content apps.
In order to build a deeper content moat, Baidu has incubated content platforms such as baijiahao and good-looking videos internally in the past few years. It has invested in and acquired iqiyi, dragonfly FM, pear video, Zhihu, Netease cloud music, palm reading technology and other content aggregation platforms, and established a content matrix covering pictures, texts, audio and video.
But only in the live broadcast, Baidu in the past did not have more layout. Since this year, although Baidu has made frequent efforts, but as a latecomer, after all, there are still some short boards, and it takes some time to catch up with the head players. And in the whole Internet traffic to short video, live to accelerate the migration trend, baidu want to make up for the short board in time, the acquisition of YY is a good move.
Second, revitalize the flow and create a new income growth pole.
Baidu's revenue structure, the vast majority of revenue from the mobile Internet, the core is search and information flow advertising. According to the third quarter report, this part of revenue accounted for 65%, in addition, iqiyi's revenue accounted for 25%, and the key business AI is still a long way from commercial realization.
More importantly, the live e-commerce business derived from live broadcasting has developed rapidly. According to the statistics of Taobao live broadcast list, on the first day of the pre-sale of double 11, Li Jiaqi and Weiya watched more than 300 million live broadcast, and Gmv was close to 7 billion. You should know, vertical e-commerce has worked hard for half a year, and Gmv is of this magnitude.
Moreover, with the trend of video content, live e-commerce has a huge growth space. According to imedia data, China's live e-commerce market scale will increase by 226% in 2019, and it is expected that the market size will at least double year-on-year in 2020.
As a search giant, Baidu has more than 1 billion users and more than 200 million live months. If you take advantage of this wave of live broadcast, the huge traffic deposited in Baidu system will be revitalized again to create a new revenue growth pole.
That's why baidu spent $3.6 billion on YY. Baidu is not short of money. It not only makes a short-term investment of more than 120 billion yuan, but also has 18.4 billion yuan of cash on account, and it can steadily generate more than 10 billion yuan of cash inflow every quarter.
Get together and sell chicken ribs
If you observe the development of happy gathering in recent years, you will not be surprised by the rumor that YY is selling herself.
In the third quarter of this year, the number of monthly lives gathered around the world was 390 million, of which YY accounted for only about 10%. YY, or the domestic market, is no longer the main battlefield for gathering.
YY, which focuses on the domestic market, is also declining. In terms of revenue, from 2019q2 to 2020q2, YY's live broadcasting revenue continued to decline. In the first half of this year, the revenue in both quarters was less than 3 billion yuan, with a year-on-year decrease of 9.7% in Q2.
Behind the decline in revenue growth is the pressure on the growth of paying users. YY live broadcasting belongs to show live broadcasting, and its revenue mainly comes from live broadcasting and reward. The number of paying users is the core index affecting the revenue. However, since 2018, the growth rate of monthly live and paid users of YY live broadcast began to slow down, and then continued to increase.
During the period from 2019q2 to 2020q2, the growth rate of YY live payment users dropped by a cliff. In the first quarter and the second quarter of this year, the growth rate even dropped by 3.6% and 2.2% year-on-year.
In addition, another important reason why huanju is willing to sell YY is that YY's domestic live show mode drags down the overall valuation of the company.
What's more, we can't see a good transformation direction at present. Due to the small number of users, it is difficult to transform the live broadcast on the show to e-commerce; moreover, the users of live show show show are basically male, and the demand for online shopping is low.
Obviously, the domestic business Yu huanju is a chicken rib. Baidu's $3.6 billion purchase price is equivalent to Momo's valuation, which is also very kind. After huanju sells the domestic live broadcasting business, it can provide a large amount of stable cash for going out to sea. Li Xueling has no reason to refuse.
Li Xueling all in overseas
After the completion of the acquisition of YY by Baidu, only overseas business remained for the reunion, which also means that Li Xueling has completed the strategic transfer, leaving behind a new gathering focusing on globalization.
Compared with the decline of domestic business, the rapid growth of overseas business will bring more imagination for new reunion. There are three quarters of the world's Internet users abroad, and the huge scale of users provides a broad space for commercialization.
At present, the trend of globalization is also good.
From the product point of view, the overseas business layout of huanju is more diversified, including the live broadcast platform bigo live, the short video platform like, and the game social platform Hago. Multi business layout can not only reduce the dependence on single business, but also realize income diversification and improve the ceiling.
In addition, despite the impact of India's ban, the overseas products still maintained good user growth. According to the third quarter report, the monthly active users of bigo live mobile terminal reached 28 million, with a year-on-year increase of 27.7%; the monthly active users of like mobile terminal reached 104 million, with a year-on-year growth of 3.8%.
It is worth mentioning that huanju overseas users have ushered in the realization period, which can provide stable cash income for the company. For example, bigo's live broadcasting revenue reached 2.95 billion, up 158.8% year-on-year, accounting for more than half of the company's live broadcasting revenue.
The high-speed income growth also makes the overseas products gathered together become the most outstanding enterprise among the domestic enterprises going abroad. According to sensor tower, a third-party mobile application data analysis company, in the list of overseas revenue of short video / live app in China in the first half of 2020, bigo live ranked first and like ranked fifth.
Earlier, Li Xueling said in the financial report conference call that in the field of live broadcasting, huanju could not see competitors around the world. Selling YY, which is $3.6 billion, may give him more confidence.
It seems that the overseas ambition of reunion is more than that. In addition to live broadcasting, it is also constantly adding code for short videos, social networking, and getting involved in e-commerce. In August, Li Xueling even said to the public that he wanted to turn e-commerce into a major income.
Step by step, reunion has turned overseas into our main battlefield.
In fact, gathering all in overseas can be seen as the epitome of the development of most Chinese Internet enterprises. Consumer Internet is the competition of breadth, more business layout, can bring more traffic, more income, and finally present the situation that the strong are always strong.
This means that Alibaba, Tencent and other leading companies will seize more resources, and when the industry development dividend fades, the survival space of new entrants, even the second echelon players of the stable Internet, such as huanju, will continue to squeeze in the stock market competition.
From this perspective, in order to find incremental space, the global layout of most Internet enterprises will become a trend.