Wu Jun: The end of the Yahoo era heralds the arrival of the age of intelligence

Wu Jun: The end of the Yahoo era heralds the arrival of the era of intelligence (transfer)

Text / Wu Jun


Yahoo is finally sold!


Yahoo is no stranger to netizens who started surfing the Internet in the 1990s. Once upon a time, it was synonymous with the Internet. This was once the world's largest Internet company, when the Internet bubble peaked in early 2001, its market value was as high as about 120 billion US dollars. Today, after losing money for a period of time, under pressure from investors, it had to sell its main business to Verizon, the telecom giant, for a mere $4.8 billion. Although I said many years ago when I introduced Yahoo in "Top of the Wave ∙ First Edition" that it may cease to exist as an independent company in the near future, when that day does come, as a As an old user who has used Yahoo for more than 20 years, I still have a lot of emotions.


1. Is Yahoo selling cheap?


Before commenting on Yahoo's acquisition, we must first correct the misunderstanding of many media and readers, that is, Yahoo was sold at a low price, or that Yahoo has missed the best selling opportunity in recent years because of the declining business (Microsoft once bid in 2006) $44.6 billion to buy Yahoo). This wrong understanding may come from the intentional misleading of the media headline party, or from the ignorance of some people.


The first thing that needs to be clarified is that Yahoo is only selling its main business and the corresponding real estate (office building) this time, not all assets. The assets of a large company usually include the following parts:


Net cash assets (cash + customer payables - debt + tax credit)

the value of the business

value of investment assets

real estate

Brand, intellectual property and other intangible assets


Generally speaking, the main value of Internet companies is reflected in the value and intangible assets of the business they operate. But things are different for Yahoo, which currently has nearly $40 billion (roughly $39 billion at July 2016 stock prices) invested (mainly Alibaba and separately listed Yahoo Japan) and a net $5 billion Cash assets, these make up the bulk of Yahoo's assets. In addition, its patents will also be quite valuable. According to the price of Microsoft's purchase of Nortel Canada's and Google's purchase of Motorola's patents, the value of this part of the assets is at least more than 1 billion US dollars. If you add the business and real estate sold to Verizon for $4.8 billion this time, Yahoo today is worth about $50 billion, far from "less than $5 billion" as many people imagined, and even better than Microsoft's back then. The $44.6 billion (acquiring all of Yahoo's assets) was much higher. If one considers that after the failure of Microsoft's acquisition last time, Yahoo's go-getter Lu Qi left the company to Microsoft, and took away a large number of Yahoo elites, the answer sheet that Yahoo can hand over today is quite good.


Of course, Yahoo's market capitalization has been halved today by the standards of the $120 billion peak of the dot-com bubble in 2001. However, Yahoo was already one of the best-performing and longest-lived companies in the world of that era. Netscape, a contemporary of Yahoo, no longer exists. America Online (AOL), whose market value used to exceed 100 billion US dollars, was finally sold to Verizon for only more than 4 billion US dollars (all assets), and it has been protected under Microsoft's wings for a long time. MSN has never been profitable, and it's even less used today. After Yahoo, a number of Yahoo-like companies were born in China, and the representative ones are Sina, NetEase and Sohu. Today, their influence on the Internet in China is also on the decline. Except for NetEase, which is relatively profitable due to its good game performance, the other two have been hovering on the edge of meager profits and losses.


Not only are the Internet companies born in that era not in a good situation today, but other IT companies that were standing at the top of the Internet bubble are not much better than Yahoo. Today, Cisco's market value is down more than 70% from its 2000 highs, as is Intel's decline, Sun was down 90% when it was acquired, and telecommunications equipment companies that once benefited from the development of Internet infrastructure , such as Nortel, Lucent, etc. have long disappeared in people's field of vision. Therefore, although Yahoo has its own problems, it has its own problems, but more importantly, its era is gone, or that wave has passed.


2. From Internet 1.0 to Mobile Internet


The era of Yahoo's birth (1994) is what we today call the era of Internet 1.0. At that time, the entire Internet was almost blank, so there was an opportunity to use the Internet to do anything. At the same time, it is precisely because it is blank that any Internet company must do everything, which is the characteristic of that era.


In the Internet 1.0 era, if a website (or Internet company) wants to gain users and advertising revenue from traffic, it must create its own content, build its own IT services, and find ways to spread it, and at the same time, it needs to find its own advertisers. Therefore, the Internet companies of that era all have a common feature: they are both media companies, IT companies, communication companies, and advertising companies. Looking back today, these companies, known as portals, were actually quite unclear about their positioning. Some of their businesses are even contradictory to each other, which also leads to conflicts between corresponding departments and conflicts between company management. Sina's early "drive away" founder Wang Zhidong (Weibo) and others actually reflects the contradiction between whether it positions itself as a media company or a technology company. This unclear positioning can be said to be a natural defect of Internet 1.0 companies. Compared with other Internet 1.0 companies, Yahoo can be said to be the best, which is why it has become synonymous with that era.


Another feature of the Internet 1.0 era is that Internet companies want to do any business that has something to do with the Internet, so the product lines of those large portals are incredibly long. Yahoo used to have a very long product line such as news (portal website), finance, email, hotel and flight tickets, e-commerce, search, video, recruitment, instant messaging, etc. The number of products is so large that users must first use a search engine to search for Yahoo's products and products. service before you know which one to use. Similarly, the early Tencent had the same characteristics, so that the whole industry felt that its tentacles were stretched too far. Since there were many blank sites for various businesses in the early days of the Internet, the potential problems of the savage enclosure and rough development were temporarily overshadowed by the superficial prosperity of rapid development.


However, the information age is no longer an era of building aircraft carriers, making an enterprise bigger and stronger, and forming the kind of enterprise consortium at the end of the 19th century. This era emphasizes the division of labor, emphasizes the use of strengths, and does one thing well and finely. After the burst of the Internet bubble, the Internet industry has gradually entered the 2.0 era. The essential feature of this era is expressed in a term in the media industry as "separation of production and broadcasting", that is to say, those who produce Internet content (people and companies) are different from those who provide Internet content. The service providers (platform companies) are separated, the former concentrates on doing a good job in content, and the latter does a good job in services. The two largest Internet companies in the world today, Google and Facebook, do not actually own any content. They are actually just channels for distributing content and Internet services. Facebook's success is not just as a social network, which has been around for a long time, but as an Internet 2.0 platform, a platform where users and software practitioners can freely distribute their own content and software.


Usually, an era will create a company of its own era, rather than continue to build a company of the previous era. This has been described a lot in the genetic determinism of "Top of the Wave", so I won't repeat it here. In the era of Internet 2.0, most of the first-generation companies are outdated. Even though Google acquired Internet 2.0 companies such as Blogger and YouTube very early, it was still very uncomfortable to be squeezed by more thorough Internet 2.0 companies. Tencent was also in crisis in that era of transition, and its fierce competition with 360 and Sina Weibo occurred during that period. It is not that the previous generation of companies did poorly, but the result of natural selection of the times.


The second take-off of Google and Tencent is lucky to catch up with the new generation of Internet wave, namely the mobile Internet or Internet 3.0. Google, which owns the Android operating system, controls the mobile internet to such a large extent that it regains an advantage in competition with Facebook, which has acquired Instagram and Whatsapp (which can be seen as the international version of WeChat), etc. Mobile Internet companies have caught up with the wave of the Internet in the 3.0 era. Similarly, Tencent is far behind other game companies (Tencent's main revenue comes from games), and it relies to a large extent on WeChat. In 2014, when Facebook bought a 100-person Whatsapp company for around $20 billion, everyone wondered if the price was too high. However, you must know that if Tencent did not have WeChat, its market value of 220 billion US dollars today would be at least halved, which means that Whatsapp is much cheaper than WeChat. Facebook has to pay this price, which is the entry fee it needs to pay for the mobile Internet era. Similarly, Alibaba insists on making its own mobile phone when the outside world is generally not optimistic, also because it needs to pay the entrance fee of the new era.


In the short span of more than 20 years, the Internet has developed by leaps and bounds, so that the most daring prophets more than 20 years ago did not imagine the prosperity of the Internet today. In such an era of rapid development, new great companies will continue to be created, and those once great companies will be announced to be eliminated. Like Google or Tencent, after almost missing the Internet 2.0 era, they can catch up again in the 3.0 era. It can be said to be a miracle. The element of luck is far greater than the level of the so-called managers. Yahoo, on the other hand, did not have the luck of Google and Tencent. It was eliminated by the times, so it is largely a historical inevitability for it to get to where it is today.


3. Wall Street can't give Yahoo a direction


If Yahoo's missteps had to be identified so that it could learn a lesson in the future, it was genetically faulty in the first place, and the consequences of that became apparent later on.


Every company has its own genes, which are difficult to change, and the fate of a company has a lot to do with its genes. For example, IBM, which serves large enterprises, is difficult to do a good job in consumer-facing products such as personal computers, and Microsoft, a traditional software company, is difficult to do well in Internet services. So it's no surprise that IBM missed the opportunity to lead the era of the personal computer, and Microsoft missed the opportunity to lead the era of the Internet. A company's genes, to a large extent, come from its founders. The founders of Google and Baidu are both engineers, so these two companies have developed into technology-led companies; Tencent and Facebook founders are essentially product managers, so these two companies focus on product experience; Amazon The founders of Alibaba and Alibaba are businessmen, so the two companies are business-driven. It is difficult for us to say which of the characteristics of focusing on engineering, focusing on products and focusing on business is better, but it is better to have characteristics than no characteristics, because when the company is in difficulties, it can find ways to exert its strengths to the limit and focus all its strengths Break through the predicament at one point.


If a company's founders are weak, or lack a firm idea, then their influence on the company's genes is relatively small, and the company will appear to have no characteristics. Unfortunately, the founders of Yahoo have no obvious characteristics themselves. As a result, Yahoo is such a featureless company. It should be said that as Stanford PhD students, Jerry Yang and Philo of Yahoo still attach importance to technology. Philo himself has even been the first backup of their system administrator, but compared to Google, Yahoo is not a good technology company. Because it doesn't believe that technology at its best can completely replace people, and Google believes that. Yahoo is very concerned about the experience of the product, it caters more to the user than Google, but it doesn't know how to lead the user like Apple. In business, Jerry Yang geniusly discovered advertising, a business model suitable for the Internet, but neither he nor Philo were good businessmen.


Jerry Yang and Philo were well aware of their inadequacies, so they did what the textbooks (and now the media) have been acclaiming—bringing in professional managers. Long before Yahoo went public (in 1995), it introduced its first CEO (Tim Koogle), and Jerry Yang became Yahoo's chief (Chief, some places call him the chief), while Philo focused on engineering details , so Yahoo's genes were not well formed in the beginning.


While introducing professional managers as CEOs, Yahoo has been largely controlled by capital. At first, venture capitalists like Sun Zhengyi controlled Yahoo. Fortunately, these people did not interfere with Yahoo's business. However, after the listing, Wall Street capital, which pursued quick profits, gradually controlled Yahoo, and Yahoo gradually became a focus on Yahoo. the company in the next year's financial report. Before the dot-com bubble burst, the false boom masked Yahoo's problems, but in 2001, when the U.S. economy went down and the dot-com bubble burst, Yahoo's problems began to emerge. During this period, CFO Decker (Susan Decker) from Wall Street helped Yahoo turn a profit through her cost control method, but Decker's lack of technical experience made Yahoo unable to accurately control the development of future technology. Decker was not even optimistic about Google's future, and privately sold a large number of Google shares at a lower price than Google's listing price (this part of the shares, if held today, is worth more than Yahoo's sale of business and real estate to Verizon) total price). At the same time, although Samuel, the new CEO from traditional media, has the intention to build a technology company, but because he does not understand technology and lacks this ability, he has been gradually selling Google shares in the two years after Google went public. Maintain ostensibly plausible financial statements until you run out of Google stock available for sale. During this period, the number of shares owned by Jerry Yang and Philo has accounted for less than 10% of Yahoo, so their role in Yahoo is limited to spiritual leaders. It is worth mentioning that, fortunately, Yang Jieyuan made a very correct decision at that time. He acquired more than 40% of Alibaba's shares from the hands of Masayoshi Son of SoftBank Group with the assets of Yahoo China and one billion US dollars in cash.


Although Wall Street can control Yahoo with capital, it cannot give Yahoo a direction. The Internet industry is different from traditional industries, and its development is relatively slow. A professional manager can be appointed to guard the existing business. In the rapidly changing Internet industry, only veterans who have been working hard in this industry can grasp the context of its development, and Yahoo's managers Samuel and Decker do not have this ability. When a company's earnings can no longer grow rapidly, Wall Street's (and other capital's) favorite thing to do is to change CEOs. From time to time, investors like Icahn jump out to remove the board of directors. event. So from 2007 to 2012, Yahoo had six CEOs before and after, and it was precisely because I saw the chaos that Wall Street caused to Yahoo that I dared to predict that Yahoo's days as an independent company would not be long.


Then in 2012, the up-and-coming Mayer took over Yahoo. The workaholic Mayer led by example and once brought a new look to the dormant company. And Wall Street once gave her time to turn things around, but in this company that lacks soul and is dominated by capital, it is difficult for anyone to turn things around. From an investor's point of view, it's in their best interest to monetize Yahoo's business when it can still sell some money.


It can be said that Yahoo has not been short of money since the first day of its existence. Even today, it still has cash on its account, not to mention a large number of stocks of other companies that can be realized. But a lot of times, money alone can't do things, after all, things need people to do.


4. The era of connection, the era of intelligence


Although history cannot be assumed, some people will always wonder, if Yahoo is allowed to go all over again, will it be able to stop missing Internet development opportunities again and again? In fact this is very difficult. It should be said that Yahoo did not make many mistakes at the tactical level. Many of its choices seemed correct at the time, although today we call them mistakes. In the Internet 1.0 stage where everything needs to be done, everything can be done, and there is no shortage of funds, it is obviously reasonable to choose this strategy of enclosure, sowing, and flowering. A technology that seems irrational. The reason why Google chose to do a good job in search is that in addition to Page and Brin being able to take money lightly and have the patience to do one thing, objective conditions also made them do so. After Google’s first official financing (round A), the dot-com bubble burst, and it couldn’t raise any more money. The $20 million it finally raised had to save money, so it could only do one thing well.


In the era of Internet 2.0, Yahoo, as the largest online media company in the world at that time, had the largest display advertising revenue company. If it were to separate production and broadcasting, and take the road of Internet 2.0, it would be tantamount to a strong man breaking his wrist. will make this decision. In the era of mobile Internet, Yahoo CEO Mayer wanted to guide Yahoo's transformation, but Lu Qi and other engineering elites all left. When we look back on a period of history, we often find that if we put ourselves into the historical environment at that time, we can understand that the seemingly wrong decisions made by people at that time were actually completely unavoidable, and we would do the same if we changed it. , which seems to be the inevitability of history.


Technology always has to keep advancing. No one or a company can stay invincible forever by sticking to a technology. Standing on the top of the wave is far more important than sticking to the existing site. The Internet 1.0 era represented by Yahoo has long passed, and the era of mobile Internet has also reached its peak. Everyone can't help but ask what the next wave will be? We humans are entering an era of total connectivity and superintelligence.


From the networking of machines and machines in the Yahoo era (Internet 1.0), to the networking of people today (mobile Internet), to the networking of everything in the future (IoT), we are increasingly finding that connection is more important than ownership. The O2O, the sharing economy that we often talk about today, is based on this premise. Google and Facebook can become the largest Internet companies without having much content. Taobao can become the world's largest shopping mall without having goods and logistics. Didi and Uber do not own a car, but they are the largest rental car companies in the world. Car companies, the common feature they have is connection, including the connection between people and people, as well as the connection between people and things, and the connection between things in the future.


Connection will generate big data, and the processing of data requires intelligence, and this intelligence is far from the intelligence of every human being. It requires super and machine intelligence, which will be an extension of our human intelligence. In the future, our society will be a fully intelligent society, we will have unlimited opportunities, and we will also meet unprecedented challenges. For the many features and opportunities of the future society, you can refer to my book "Intelligent Society".


From the rise and fall of Yahoo, we can see the ups and downs of the development of Internet technology, and we can also realize that in the information age, it is difficult to pursue a century-old store with a long-term foundation. All we can do is to try our best to grasp every technological trend. For any company, it belongs to an era. When an era has passed, its historical mission has been completed. Therefore, its end is not a bad thing. Only in this way can resources be released to invest in more important industries. go in.

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