10 Years Later, The Internet Bubble 2?

" Internet It is the first technology that people have personally initiated, participated in and ended the stock market bubble. The Internet has created its own unique economic cycle, rising and falling, and returning to normal orbit. The above paragraph can be regarded as the best summary of the global Internet bubble in 2000. Now, a batch of Chinese Internet companies incubating after the first Internet bubble are going to the top. At the same time, they are also worried that they will still fall after they get bigger.

The so-called Internet bubble is too much money to chase a business or project, then create huge value space, and find a richer fool. For this "drum game" game, the domestic IPO boom is like an increasingly intense drumbeat. Although the drums haven't stopped, signs of the Internet bubble have already appeared.

The signs of bubbles are not bad.

Take note of your side, it is easy to see that the bus and subway are flashing. Chen Yao Figure, that is, Ganji network. Advertisement The heavy advertising before CCTV's 315 evening party came from the handshake net. These advertisements are all very expensive. Among them, Ganji has invested 400 million yuan in this hot advertisement, while fan network expects its advertising cost to reach 10 figures in 2011, which is 1 billion yuan.

A senior portal sales veteran told reporters that even if the cost of advertising on their website has increased by 30%, the advertising investment of electric business enterprises this year can still be called "Crazy". The money spent on advertising is not only the popular SNS, video website, etc. this year, besides the first group buying website, the B2C websites of mother and baby, shoes and clothes, 3C, books, home and so on are competing to get the funds invested in the advertising campaign.

As a matter of fact, the advertising investment of 100 billion yuan has not been very large in the domestic Internet industry. For example, a well-known group buying website Bao Bao network has been reported to have spent 550 million yuan on advertising promotion, while its rival glutinous rice net and the United States Mission network plan to invest 200 million and 130 million advertisements respectively.

According to the main analysis data of an e-commerce advertisement obtained by the reporter, from the cost of advertising in January this year, the website of the B2C website has an annual growth of 400% of the clothing website "fan guest network" of more than 100 million yuan, the bag and suitcase website "wheat bag" 45 million 700 thousand yuan, the food network station "I buy the net" 41 million 120 thousand yuan, and the creative life website "interesting play net" is 18 million 670 thousand yuan. It seems that the 1 billion plan of van guest network is not a slogan, but a genuine silver bullet offensive.

At the 2011 Annual Conference of ecommerce, Feng Xiaohai, a CEO full of nets, revealed a hint of helplessness in his slightly humorous language. "The group buying industry has changed greatly because of the entry of capital. The first big change is that everyone is very impetuous. At the same time, they are very nervous. They can not sleep because they are capital. Second, the group buying websites that get the capital are no longer profitable. We were very healthy and profitable in July last year. After investing in KBCP, we said that profits should not be considered first. Therefore, we quickly scale the scale to nearly 25 landing cities at the end of the year. Feng Xiaohai disclosed: "at present, advertising costs account for 30% of the total operating expenses."

Bubble symptom two financing gives IPO price

It is obvious that Internet companies are investing heavily in support from venture capital VC. Starting in 2011, tens of millions of dollars in the level of financing no longer become news, Le Tao net, 24 votes, poly and other large and small websites claimed to have won tens of millions of VC. Among them, video website PPLive has won the $250 million story of Softbank only by a few minutes' elevator time. It has been uploaded in the news media for a long time. In fact, PPLive only ranked more than fifty in Alexa, and is facing strong rivals such as Youku, potatoes, thunder and so on. It is hard to say the prospect of geometry. Nevertheless, PPLive's current valuation has reached $700 million.

The larger scale of financing is Jingdong mall. According to its C round of financing estimates, investor DST has invested $500 million in Jingdong mall, and only traded 5% of the shares. That is to say, the current valuation of Jingdong mall is 10 billion dollars. For VC, if we invest 100 thousand yuan in the first round of Jingdong investment, the current valuation will exceed 100 million yuan.

In addition to large Internet companies, VC burn money is not eccentric, even the less qualified small Internet Co is also very popular. A vertical e-commerce website has just been launched, and the financing plan has surfaced. Its founder told reporters that his first round of financing target was about 100 million yuan. "Since the beginning of this year, the enthusiasm of funds for electric business enterprises has continued to increase, and investment volume can also be said to be on a level. If it was placed in the first round of financing last year, it would be expected to be about 50 million yuan."

And another clothing e-commerce website has recently announced that it has received tens of millions of dollars in the VC, and last year, when reporters interviewed him, its daily orders were only about hundreds of single, even less than a few dozen times, it seems to be equivalent to a three level e-commerce website level.

A partner of an investment institution told reporters that he had invested in Internet investment in the past, when the amount of investment was millions of dollars, and now he jumped to hundreds of millions of dollars. "Taking the recent public comment network at the same time of financing and postpone IPO, it can be said that the investor gave the IPO price."

Liu Xingliang, a well-known Internet commentator, told reporters that he had heard from friends of the investment organization that he wanted to invest in an electronic business website for $1 million, but found that he needed $10 million to operate. He had to put the matter on hold. At present, many domestic Internet companies are indeed overvalued.

Three signs of bubbles: lack of innovation and rapid growth of Shanzhai

"It must be the most exciting time for China Internet Corporation now. Before the successful listing of Youku, 360 and other enterprises, VC venture capital invested heavily in money." Huang He, who works in Wall Street, told reporters that China Internet Corporation has become the usual conversation between him and his colleagues for a while. Huang said that he and many American peers believe that although more and more Chinese companies are beginning to look forward to listing in the US, VC is enjoying this, but almost every China Internet Corporation can find a template for American companies. "Youku" is China's Youtube. Diamond birds imitate "Blue Nile". Dangdang is close to Amazon's model. Even the upcoming "Renren" is also known as China's Facebook. Chinese Internet companies still lack innovation. "

At the end of the 90s, although the first Internet bubble came into being, the market in that era was full of the desire for ideas and innovation. Now people are only concerned about the market share and the huge user base. When asked about the existence of the Internet bubble in the domestic industry at present, the answer of IDG capital founder partner Xiong Xiaoge is that there is no bubble. "Now there are four hundred million Internet users, the foundation is completely different."

The lack of innovation has led to the embarrassment of the "group war" of the group buying website. Xiang Ligang, a well-known industry insider, once said with laughter, "the Chinese Internet is seriously lacking in innovation, and even should learn from Sichuan cuisine which is good at improving and breaking through."

The same bad situation happened in the online games industry in China. The "national industry", which once nurtured grand NASDAQ listed companies and nine cities, is experiencing a slowdown. China's online game market annual report 2010 shows that the industry expects to rely on innovation to reverse the trend of decline. However, it does not think that the online game industry is rampant, the big guys plagiarize each other, or even copy their own phenomena frequently. The lack of innovation motive force, homogenization and plagiarism are leading to nearly 7 of online games enterprises are facing death.

Liu Xingliang said: "the last Internet bubble was born in the United States, but this round is likely to start in China. Those top websites in their own fields should have little impact, and the lower level websites will not fluctuate too much. The websites most likely to be affected by the Internet bubble should be websites that have just been listed or in the middle. I think this effect will show prominently next year. " {page_break}

Expert opinion.

Steve Blank: "ugly wife" always wants to see her in law.

Steve Blank is an influential figure in the entrepreneurial world of Silicon Valley. He is the founder of 8 start-up companies. He teaches entrepreneurship courses at University of California at Berkeley, Stanford University and Columbia University business school all year round, the author of the secret history of Silicon Valley. He received an exclusive interview with reporters about the topic of the Internet bubble.

Reporter: Chinese enterprises continue to be in the US IPO. Are they overvalued?

Steve Blank: it is difficult to judge all of them. There must be some short-term ones, but not for a long time. The latest market driven IPO bubble has never been seen in business history. Billions of users will bring huge revenue and profits. Internet Co will grow at an alarming rate. The late valuation of enterprises has expanded rapidly, recruiting talents in Silicon Valley is becoming more and more difficult, new shares are continuously issued, and signs of bubbles have emerged. Investors are full of imagination about the scale of the Chinese market. When most Chinese start to access the Internet, use tablet computers and mobile phones, they can start counting money, but now it may be a little early.

Reporter: what is the current Internet situation similar to 1995~2000?

When Steve Blank:1995 to 2000, people feel that as long as they are ".Com", they will do anything. Netscape began to let underwriters realize that as long as the public is happy to snap up stocks, they can make huge profits from valuation inflation, thus starting the bubble of 5 years. Netscape IPO became the entrepreneurial script. At that time, the mantra was "go all out and go up quickly." the replicable method is "brand, hype, change hands or go public".

In 2011, the current Internet opportunities are unprecedented. Facebook, Zynga and other companies will create greater value than any other company. Unlike today, today's Internet start-ups can be "agile development", which means they can develop their first product in a few weeks, while thousands of dollars come from friends or family members. As I mentioned in the four step epiphany, the generation of business models has become a new standard.

Reporter: when will the Internet bubble burst and how will it break down?

Steve Blank: unlike the last bubble, the first wave of the bubble will be the Facebook, Zynga and other star companies, which will show their true earnings, profits and huge customer base. Like all bubbles, these companies will attract continuous attention from capital, and the IPO pipeline will quickly decrease, and then the bubble will burst. It's hard to say the exact time, but if the bubble started a year ago, maybe 5 years later, it will be broken in 2014 and 2015.

Reporter: do you think China's Internet companies have enough innovation?

Steve Blank: China's rise as an economy is breathtaking. Just like the United States overtook Britain in the early twentieth Century, China in twenty-first Century was on the road to surpass the United States. Like the then us, the early stage tended to imitate rather than innovate. But this is only a phase, not a permanent state.

Reporter: Recently, a Chinese video website similar to Youtube has received $250 million venture capital from PPLive. Do you think this investment is too much?

Steve Blank: I don't know PPLive, but 250 million dollars looks like a big startup fund. I believe that this money should not appear in the front end of enterprise development, but should be at the back end to help expand the scale.