418【Google Financing】

If Silicon Valley is the center of the Internet world, then Palo Alto is the center of Silicon Valley.

Google's corporate address is located at 165 University Drive in Palo Alto, an office building that has spawned many Internet companies. Two months ago, a website called paypal was launched next door. It is still unknown, but after many years, many Chinese people call it "American Alipay".

Google's development is extremely fast. In more than a year, there are already more than 80 employees.

However, there have been frequent negative news recently, and some netizens have been deceived through search advertising links. For example, last month, someone used Google to search for a booking company, and sent the money for the ticket. He didn’t see the ticket until the day of the flight, and sued Google in a rage.

These incidents are so big that even if you think on your knees, you can guess that someone is fueling the flames, nothing more than trying to get Google to accept the financing plan.

Google voluntarily compensated the victims for their losses, and at the same time issued a statement on the homepage of the website and newspapers: "Google does not do evil, and will not become an accomplice of scammers. We firmly believe that in the long run, companies that do good things for the world are more in line with us and The idea of ​​shareholders, even if we give up some short-term interests. Starting today, Google will conduct a strict review of advertisers, and will launch a special screening mechanism in the near future.”

Re-vetting advertisers and suspending new ad placements has caused Google's revenue to decline rapidly.

When Song Weiyang walked into the company, he happened to see two employees being taken away by the police, and couldn't help but ask, "What's going on?"

“The moths of the advertising department,” Sergey explained simply, “take money from scammers and help them circumvent advertising censorship in the hope that they will rehabilitate in prison.”

"That's the way to do it." Song Weiyang laughed.

Since the day Google started charging for search ads, it has been unable to eliminate false advertising.

Google has also had various scandals in history, and was once directly investigated by the FBI. The reason is that Google’s advertising department took the initiative to help scammers evade the review mechanism for profit. A large number of fake, counterfeit and smuggled drugs flooded the search results for a long time, and Google was fined $500 million for this. This scandal is really not a violation of individual employees, but the entire advertising department of Google is involved in it!

In the face of interests, any review mechanism is just a display!

Google was fined 500 million U.S. dollars for playing around like this, so it became more restrained. And Baidu also played like this, but it has not been punished, so it is even more unscrupulous.

This is the fundamental reason why Google and Baidu’s advertising review mechanisms are similar, but the difference is getting bigger and bigger. China’s consumer rights litigation is too nonsense. Sometimes the law and law enforcement agencies are just decorations, and they can only make things big through public opinion. solved.

There is also the lag of the law. The punishment of many laws and regulations in China is still in the 1980s and 1990s. Even if the unscrupulous enterprise loses the lawsuit, it will only be fined 350,000 yuan and ordered to rectify (compensation will be calculated separately).

In 2015, China promulgated the new "Advertising Law", which finally increased the amount of fines, but by how much?

Publishing false advertisements shall be fined not less than 3 times but not more than 5 times the advertising fee. If the advertising fee cannot be calculated or is obviously low, a fine of not less than 200,000 yuan but not more than 1 million yuan shall be imposed. For three or more violations within two years or other serious circumstances, a fine of 5 times to 10 times the advertising fee shall be imposed; if the advertising fee cannot be calculated or is obviously low, a fine of not less than 1 million yuan but not more than 2 million yuan shall be imposed.

In other words, Baidu lost a lawsuit due to false advertisements, and was fined 2 million yuan. This amount of money is nothing! Let alone a fine of 500 million US dollars, if Baidu is fined 500 million yuan, you can see whether Baidu dares to be so arrogant.

Unless a powerful organization takes the lead and prosecutes and investigates a large number of cases at the same time, Baidu can be taught a painful lesson.

...

Song Weiyang, Larry, and Sergey entered the meeting room together, sat down and chatted a few words, and the project leader of Sequoia Capital also came.

"Mr. Harris, this is Mr. Song Weiyang, the major shareholder of Google." Larry introduced.

Harris is a bearded man with a smile on his face. He shook hands with Song Weiyang and said, "Hello, Mr. Song!"

Song Weiyang nodded, sat back and crossed his legs and said, "You guys continue to negotiate, I'll just listen."

Sergey said: "At present, there are two most fundamental differences. One is that Sequoia Capital's valuation of Google is too low, and the other is the setting of the dual voting system."

Harris shrugged: "Gentlemen, the valuation of $600 million is already very high."

Larry said: "Webvan's revenue last year was not as good as Google's, but it was valued at $1.5 billion. Why is Google's valuation only $600 million?"

"I've explained this problem a long time ago," Harris said, "webvan has already conducted two rounds of financing, and a large amount of capital has been injected. Moreover, webvan has also set up many stores and delivery stations. These fixed assets and logistics channels are being evaluated. It scored very well.”

In another half a year, when Webvan launched its IPO, its valuation directly reached 8 billion US dollars. Then the Internet company went astray, took the money to build stores and channels frantically, and broke the capital chain after only a few months of playing, and declared bankruptcy amidst the astonishment of everyone.

If you have to make an analogy, the operation mode of webvan is a bit similar to JD.com. It's a pity that the United States is sparsely populated, the cost of delivery is too high, the efficiency of online shopping is too low, and the Internet bubble burst, which directly led to this company becoming a martyr.

Larry said: "Webvan's investment in stores and channels will never exceed 10 million US dollars. This is not the reason why they are overestimated."

Harris said: "Investors have taken a fancy to Webvan's business model, which is different from Amazon. Amazon mainly sells books and audio-visual products online, while Webvan sells daily necessities. Webvan can definitely become an online Wal-Mart, so it is called Estimated at $1.5 billion."

"Google also has its own business model," Sergey said, "and it's a unique business model, the only one in North America!"

Harris said with a smile: "But there are many search engines. If Yahoo recovers and acquires an excellent search engine, I am afraid that Google's future development will be blocked."

"But Yahoo only cares about the traffic of the portal website, because the traffic is linked to the stock price. They don't do other businesses, and they even leave the better search engine unused. They are afraid that the search engine will lose users if the search engine is too good." Larry argued.

Historically, until 2002, when Google’s annual revenue reached 240 million US dollars, Yahoo suddenly realized something and offered 3 billion US dollars to buy Google. At the time of the dot-com bubble, dot-com companies were vastly undervalued, and $3 billion wasn't too insulting.

Harris frowned: "What do you think the valuation should be?"

"At least $1.5 billion!" Sergey Lion said loudly. Now is the golden age of the Internet, and it is normal to quote $2 billion.

"I'm afraid this price is a bit whimsical." Harris said.

Larry said with a smile: "You can go back and continue to evaluate, anyway, Google is not short of money for the time being."

Song Weiyang interjected, "Even if I'm short of money, I can continue to invest."

Harris was very troubled by this, and said: "Then let's put the evaluation price on hold for now, and let's talk about the dual-class structure first. The ratio of 1 to 10 voting rights seems to be too low."

"There is no room for negotiation," Sergey said, "You have only two options: accept or not."

The ab stock model was very popular in the American Internet industry at this time. Under the same circumstances, the founder's stock voting rights were several times that of external investors. One vote is equal to two votes, one vote is equal to five votes, and one vote is equal to ten votes. They are all possible, and the two parties can negotiate and determine.

Harris had a splitting headache. It had been a long time since he had encountered such a difficult founder, so he had to go back and report the situation to the company executives.

Next, Song Weiyang met with the project leaders of several other venture capital institutions, and without exception, all of them fell apart.

In fact, Google's funds have bottomed out, because the speed of development is too fast, and the monthly salary of more than 80 employees is a large expenditure.

Larry and Sergey invited Song Weiyang purely for acting.

A few days later, Taurus Capital, which is not well-known in the United States, suddenly announced that it would continue to inject capital into Google, estimating Google at $1.5 billion.

Song Weiyang even went on a talk show, bragging about how he attacked Soros, and then invited two newspapers to promote Jinniu Capital and Google. This is all spent on Google's working capital. If there is no venture capital company pouring in money, Google will have to default on its salary next month.

Although they knew that Google was bluffing, those venture capital institutions panicked. Because the momentum is also effective, more and more companies in the limelight are paying attention to Google, and the pressure of competition has become greater in an instant.

Finally, Sequoia Capital, kpcb and other large venture capital firms began to join forces. They felt that they could not eat Google alone, so they prepared to jointly launch a financing plan.

Five venture capital companies jointly negotiated with Google. The latest valuation is 800 million U.S. dollars, with an investment of 400 million U.S. dollars to obtain one-third of Google's shares.

At the same time, the five venture capital firms also made a request that they plan to send a CEO to Google for administrative operations.

The news shocked the United States immediately.

The king of Internet financing this year is webvan, and the second place is Google!

By the end of the second round of financing, Google's valuation skyrocketed to $1.2 billion. Because these venture capital companies have spent too much money and urgently need to withdraw funds from the stock market, they can't wait to list Google, and they have spared no effort to start various campaigns, claiming that Google has created a new era of Internet business models.

If this momentum continues, I am afraid that Google's next round of financing will be valued at more than $3 billion.

In the Internet these days, it doesn’t matter whether it makes money or not. The more you brag, the more valuable it is. Webvan’s $8 billion valuation is also a bragging.

And Song Weiyang and Jinniu Capital also showed their prominence in this incident, and began to be known by some American people.

The Chinese media quickly got the second-hand news, and immediately exploded. The major shareholder of an American Internet company worth 1.2 billion US dollars is actually a Chinese, not a Chinese like Yang Zhiyuan. Song Weiyang is a native Chinese!