If you look at the current revenue scale of Huaxia Friends, its market value is about 6 billion US dollars at most, but if it is calculated according to the comprehensive calculation of industry development and revenue growth rate, it is more difficult. Baidu's market capitalization, which is comparable to that of Huaxia Friends, has reached about $30 billion. Even if Youwang only has two-thirds of Baidu's revenue, its market value should be about $20 billion. But if you compare it with F&F, even if the source of income is different, the advertising value is different, and some of the water is deducted, and the number of users of Huaxia Friends is basically not much different from F&F, it should be worth $15 billion. If you add in the value of Friends' equity in other companies, it is also at least $5 billion. In other words, the market value of Huaxia Friends Network should be around 20 billion US dollars, which should be established.

In fact, the valuations of Friends.com and Guoke Mobile phones are rising almost every day, which is also the reason why venture capitalists are scrambling to invest. In particular, these are excellent companies that have established development advantages and have stable teams.

Huaxia Friends Network is undoubtedly very good, although Lei Jun now has doubts about the income model of Friends, but Zhou Shi knows with certainty that expanding online advertising is king. The domestic online advertising market has maintained a rapid growth model, especially after the popularization of the mobile Internet, the development speed of digital advertising is particularly amazing, and the scale will exceed 60 billion US dollars in a few years (in 2010, the US digital advertising was about 27 billion US dollars, and the domestic digital advertising market was about 5 billion US dollars), which is 60% of the revenue of the US digital advertising market. If you have a 20% market share in this market, you will have a market value of $90 billion based on a profit margin of 50% and a price-to-earnings ratio of 15 times.

"However, with the development of the mobile Internet, the development space of web games is also limited, and we will have one less source of income in the future!" Lei Jun

"Then open the live broadcast mode!" Zhou Shi

"Live mode?"

"Through various forms of live broadcasts such as personal game entertainment performances, the audience can give tips and give virtual gifts. We provide a platform for these entertainment streamers to participate in the sharing of virtual gifts. "Zhou Shi

"In other words, let Friends.com enter the video field?"

"If Friends is rich, it's okay to let Friends develop iQiyi, it doesn't matter what industry Friends enter in, what matters is what kind of Friends you want to get. Entertainment live streaming, especially the live streaming app on mobile phones, can greatly enhance the interaction between friends on the network. However, in the future Internet advertising market, the share of video advertising will definitely not be low. But I judge that the loss of the video industry will continue for a long time, and his profit cycle will be very long. "Zhou Shi, only when the enterprise can grow healthily can there be ideals, and the friend network has not yet reached the time when it can fight for the ideal.

"Live streaming, video sites, it's a really tough choice. "Lei Jun

"You can also develop the game industry, isn't the current web game platform doing very well?" Zhou Shi

"There are a bunch of bad games outside, our review is much stricter, and the development is not fast" Lei Jun

"Then there is no way, security, and stabilizing these user experiences are the most important thing, we can have no way to make profits for the time being, and we can't lose these users!" Zhou Shi

"What other ways to make money besides live video broadcasting?"

"You make an IOS and Android application distribution platform, the mobile Internet is the future, and the focus of the friend network can be on the APP, do it yourself or invest in those apps that are used by users, downloads, and rise quickly. "Zhou Shi

"But this still doesn't make money?"

"But this can allow you to get more financing, how to make money is your business, if you can't make money all the time, let's talk about it then!" Zhou Shi

"You are a threat from Chiloulou Tower......" Lei Jun

"You're right......" Zhou Shi glanced at Lei Jun seriously

How can there be so many novel ways to make money in the Internet industry, most of the companies that can become giants are enterprises that make money by advertising, Alibaba's annual advertising revenue exceeded 100 billion, and Baidu's income is very close to this number. Lei Jun didn't want to dig deep into the potential of advertising to increase revenue, and wanted to open up new sources of money, which was obviously a bit of putting the cart before the horse.

The profit model of the Internet is very simple, that is, advertising, e-commerce and value-added services, and value-added services include many value-added services, such as games, (video) memberships, live broadcast rewards, payment and so on. In fact, this market is also very large, the global game market is close to the scale of 400 billion soft sister coins, and the Chinese game market is now about 30 billion soft girl coins. In a few years, it will soar to 200 billion soft girl coins, and the global game market will exceed 900 billion by then. Such a huge market is enough to accommodate many companies to compete on the same stage, and the network of friends with traffic advantages does not worry about making money. However, in the Chinese market, the largest game developer has become Time Games, League of Legends, CF plus DNF three trump cards, plus the earliest entry into the mobile game market, the revenue of the three major operating system platforms exceeded 1.2 billion US dollars, plus the game revenue at home and abroad, it actually exceeded 4 billion US dollars (excluding Zynga, June 2009 to June 2010), you must know that Penguin's game revenue in 2010 was 2.3 billion US dollars, but Time Games is a global game company, and egame, a continuously developing game platform, is developing the console game market, and it is understandable to have this income。 Therefore, time games have become the number one source of cash flow for the time system. It's a pity that these have little to do with the friend network, they can also make browser games, although this market is also growing rapidly, but because of the large number of participation, thousands of games have diluted the profits of the entire market. For the foreseeable future, it's no surprise that Friends.com's biggest source of revenue will be advertising.

Zhou Shi once again emphasized with the members of the whole team at the meeting of Friends.com that advertising is their main and most important source of income.

"Our task is to find the best balance between user experience and advertisers, which may not be found, but we have to find it. And we must concentrate our greatest efforts on the mobile terminal, mobile APP plus information flow, which is our most advantageous weapon. Zhou Shi repeated, as long as they are elites, they will have their own ideas, and their ideas may not be in line with reality. However, the advantages of Friends.com are artificial intelligence and big data, as long as we continue to invest in these two fields, it will always bear fruit. In the future, short videos will explode, and it is hard to imagine what kind of user experience will be presented to everyone without artificial intelligence and big data analysis (in fact, search) working in the background.

(End of chapter)