Baidu Robin Li: Baidu Is Only 3O Days Away From Bankruptcy.

Robin Li, who became the most eye-catching fortune and new China in 2005, has always had a sense of crisis because of Baidu's listing.

"Baidu is only 30 days away from bankruptcy. The reason why we all value the search market is that its growth rate is very high. Growth is also a kind of change. If we can not grasp the change of market demand in time, we will be eliminated.

Following Ding Lei, Chen Tianqiao and Wong Kwong Yu, in 2005, President Robin Li of Baidu Online Network Technology (BIDU) became China's most eye-catching wealth Nouveau. Robin Li, who owns 22.4% of Baidu, has the highest figure of over $900 million on the day Baidu landed on NASDAQ. The famous school came into being, started with technology and started business for five years, and then made Robin Li, the world's largest Chinese search engine. It is also known as a new good man and a perfect version of a successful man.

　　 New record of NASDAQ

On Christmas Day 1991, when Robin Li, 23, traveled to Beijing from New York State University of buffalo for a master's degree in computer science, he would not think that he would create a new record in Nasdaq in 14 years.

In August 5, 2005, when Baidu was listed, the share price went on a wild road. The highest price was $151.21, which closed at $122.54, a 354% rise compared with the issue price of $27. This has not only created the highest first day listing of the Nash market since the Internet bubble in 2000, but also the highest record in the US stock market in the past 231 years, and Baidu has become one of the ten most profitable stocks in the US history.

Several executives of Robin Li and Baidu witnessed this exciting moment in the trading hall of the underwriter Goldman Sachs. "At the beginning, the traders in charge of our stock started to bid from 30 to 35, but almost no one wanted to sell them, and the bills kept moving in. The more nervous he cried, the higher the price was, but no one was willing to sell it. He had never seen such a thing before. " Indeed, NASDAQ has not seen such a phenomenon for 5 years. At 11:40, the chief dealer of Goldman Sachs, who constantly updated the offer, shouted out to Robin Li for a quote of $72 per share, and Baidu's first transaction was announced, which was more than 200% higher than the issue price of $27. For a moment, Robin Li had only one feeling: excitement.

Baidu's good performance has changed the impression of international capital markets on Chinese companies. Robin Li said: "we are starting to look at Chinese companies. They feel that Chinese companies are synonymous with cheap products, just like some of the products made in China. Now they find that Chinese companies have the concept of selling very expensive and highly sought after, so American investors come back to see which other Chinese companies are trading in the United States besides Baidu. Are these companies undervalued? After the listing of Baidu, shares of other listed companies in China and even later listed companies in Hongkong have increased a lot.

The popularity of Baidu's listing was the beginning of the roadshow. From Hongkong to Singapore, from New York to San Francisco, Robin Li finds that most investors are quite optimistic about China's search market and show unusual interest in Baidu, the world's largest Chinese search engine. "In the process of roadshow, I usually have 10 meetings in a city, too many funds are interested in us, or even at least manage the fund manager who has more than 1 billion dollars, so we can meet him alone. After the meeting, investors have a more realistic understanding of us: they seem to be doing things in real terms, not hype, so there is a 90% order rate. We originally planned to issue $about 70000000 stock, resulting in an order of more than a billion dollars.

Baidu's offer price has been raised again and again from the initial 18 US dollars to 27 US dollars. While Chinese companies used to go to NASDAQ, most of them went on cheap routes, and it was good at 20 dollars. Some investors also question this. In San Francisco, a fund manager told Robin Li: "I don't usually look at such a small company. You earned so much money last year, which is very limited by the standards of American companies. You are now the most advanced search engine in China, but I can easily find out different results by looking for someone else. Robin Li became more excited when he encountered such a problem: "I know this person is really interested in the company, and the more acute his question is, the more he says he has done his homework." He began to talk about the growth of Baidu, the prospect of Baidu, the more recognized the manager was, "even if such investors, even if Baidu's share price is higher, they may not sell because they have confidence in the company."

　　 Transformation to bidding ranking

After the celebration, Robin Li shed tears. "It's mainly because it's not easy. No matter how hard it is, it will be sad. If success is easy and easy, it is impossible to cry. " In 2000, Robin Li and her friend Xu Yong took the investment of $1 million 200 thousand from venture capital Peninsula Capital and Integrity Partners, and returned from Silicon Valley to start their own business. (Baidu's financing, please refer to "new fortune", January 2005, "Baidu is not manipulated"). At that time, it was the burning period of domestic Internet fanaticism. Many Internet Co, though not profitable and of a very small scale, tended to rent the most luxurious office buildings, to travel in five star hotels, and to fly first class. "I have worked in Silicon Valley for many years, and I understand that the conditions for start-up companies are very hard. I judged that venture capitalists in the United States would suffer a great deal in China." So Robin Li spent 1 million 200 thousand dollars cautiously.

Initially, Baidu had 8 employees, earning money by providing search technologies for portals. Because Robin Li has the core technology of search domain - the patent of hyperlink analysis, Baidu soon occupied the market of about 80% of China's Internet search, and almost all the mainstream portals in China are its customers, but Baidu still can not make profits. In the view of venture capitalists, the company has only been established for more than a year, and it is normal to not make money. But Robin Li judged that following the original road, Baidu would not make money in three or five years. "I asked salesperson, you sell this product to 2 million yuan to the website this year. Next year, I will take 4 million with it. Will it do it? The salesmen said no. I say, how many websites can you find next year? I can't find too much. " Robin Li realized that such a business model was problematic.

He thought of the bidding rank: "in August 2000, I was very optimistic about this model, when I was looking for a company to do competitive bidding, and we provided the technology behind it." He talked about many companies, but none of them knew what the bidding price was. In 2001, the Internet bubble burst, charging became the top priority of all major portals. Search engine service was the only way to make money. The website wanted to search for cheaper, not better search technology. Baidu's original business model was in crisis. "We need a lot of R & D investment to do better, more advanced technology, but these investments need to be supported by returns. If our customers are concerned about how to lower prices, there will be a vicious circle. So in the summer of 2001, we decided to change the business model. Robin Li decided that Baidu would do its own bidding.

However, this change is not without risk. Once Baidu turns from the background to the front desk and provides services to the end users, it means competition with the search business of the portal website, and the biggest customer will become a competitor. At the same time, as a latecomer, Baidu's technology must be better than the original search engine providers in the market in order to attract users.

The resistance to transformation also comes from investors and corporate executives. "But I believe that I am the one who knows most about China's Internet market and the search engine market. What I want to do is not compromise, not balance, but convince them to look ahead and see what the company will follow along with its original business model." Robin Li finally conquered investors with confidence, including DFG, a venture capital firm that has just invested $10 million, and IDG.

In September 2001, Baidu launched the search service for terminal users for the first time, and also launched the bidding ranking service. The profit model commonly adopted by foreign search engine companies was just released when it was launched. In 2002, Baidu's revenue was only 10 million 500 thousand yuan. In 2003, Baidu announced its profit. In 2004, its revenue was 110 million 900 thousand yuan, and its net profit was 12 million yuan, with an annual revenue growth of 225%. Robin Li's low-key public exposure has become more frequent because he thinks Baidu can become a healthy public company, so he plans to go public.

　　 Join hands with Google to guard against Google

The rapid growth of Baidu makes Google, a search giant, not to be overlooked. In September 2000, when Google launched the Chinese search service, Baidu was also a founding unknown. By 2003, Google had lagged behind Baidu in the Chinese market. The Internet is a special industry in China's economy. Because of the modern enterprise mechanism, there are many excellent talents to enter, and the support of the international capital market. In this field, local companies can defeat the international giants. In the field of portals, SMS, games and so on, they are the leading companies in the field. I believe so in this search. Robin Li said.

Because of Baidu, also to increase the concept of China for the upcoming listing, in 2004, Google's CEO Schmidt began to contact Robin Li, seeking to invest in Baidu. At the beginning, Robin Li rejected Google's investment, "because the first reaction is that they are competitors. Later, I think there are good places. They come in and will give many American investors confidence. " Also for the consideration of listing, Baidu accepted Google's $4 million 990 thousand investment and sold a 2.6% stake. After the listing of Baidu, Google's shareholdings dropped to around 2.2%.

According to the American model, eBay and excellence have become the pieces of China's Internet giants. Some people worry that Baidu will inevitably be bought by Google. But Robin Li is confident: "the initiative is still in our hands. Baidu's equity structure is very reasonable, Google's investment accounts for a small proportion, and Baidu's development, operation and daily decision-making are not interfered. " When Baidu was founded, it divided the shares into three parts: some were owned by the founders, some were held by venture capitalists, and some were stock options held by employees. Robin Li disclosed that his initial shareholding ratio was 50%, while Xu Yong was his 1/3. After the Baidu IPO, the total share capital was expanded to 32 million 320 thousand shares. On this basis, Baidu executives held 43.5% of the shares and held a controlling position. Among the executives, Robin Li held 22.4% of his personal shares and was the largest individual shareholder.

But Google's coveted Baidu is far more than 2% of the shares. In June 2005, two months before Baidu went public, Schmidt visited Baidu again. The content of the negotiations between the two sides is unknown, but the subsequent "cattle card" plan clearly shows that Baidu is trying to guard against Google's intentions.

According to Baidu prospectus, Baidu listed shares are classified as class A and B, and the new issue shares in the US stock market are class A shares, while all the original shares are B shares. The voting rights of every 1 shares of class B stock are equivalent to the voting rights of 10 class A shares. Under the two-tier stock structure, once Google or others buy Baidu's original stock, the shares will immediately be converted from class B shares to class A shares. This means that even if Google purchases most of its original stock, it will not have enough voting power on the board. Meanwhile, Baidu's share capital is also lower than 25% of the previous legend, accounting for only 12.5% of the total share capital. Some commentators believe that the move is like Baidu's plan to prevent Google.

But Robin Li believes that these two initiatives are not entirely aimed at restraining Google's takeover. "The reduction in the number of shares issued is mainly due to the fact that the issuing price of the listing is relatively low, so we are reluctant to offer too many shares in the market. From another point of view, Baidu listed the most.