For Zhang Chaoyang, who is now “Fifty Knowing the Destiny”, the trajectory of life has probably been laid down in 1995.
Editor’s note: This article is from WeChat public account “Every video” (ID: Meijingyingshi), author Wen Menghua, editor Du Yi.
Sohu, which has been neglected for a long time, is trying to stand in the spotlight of the Internet.
Today, after nearly 20 years on NASDAQ, Sohu and Zhang Chaoyang are trying to change and re-emerge. This time, Sohu will look to the social network model.
On the afternoon of August 6, on the second day of the Sohu 2019Q2 financial report, Zhang Chaoyang, Chairman and CEO of Sohu.com, participated in a number of media meetings including meijingyingshi.
Zhang Chaoyang accepts interviews with reporters (Source: Respondents provided)
At the meeting, Zhang Chaoyang responded to questions such as Sohu’s performance problems, stock price decline, market value shrinkage, and future strategic planning.
“What is the market value of Sohu? When it comes to profitability, we will say that we have a large booth, there are videos and media, and multiple quarterly losses are facts. We are turning losses into profit. This is the first step. Zhang Chaoyang is very honest.
Sohu’s present:Why did the stock price fall after the Q2 earnings report? “Crash on the gun”
After the Q2 financial report was released, Sohu, who had been away from the stage center for a long time, was suddenly noticed because the stock price of Sohu Company fell across the board and the market value shrank drastically.
On August 5, Sohu announced the unaudited financial report for the second quarter of 2019 as of June 30, 2019. The report pointed out that Sohu’s total revenue in the second quarter was 475 million US dollars, an increase of 10% over the previous quarter. The non-GAAP net loss attributable to Sohu Group was $50 million.
As the number of losses of $50 million comes out, the capital market takes the lead in giving a response and attitude.
On August 5, Sohu fell 26.84% reported $8.94, Changyou fell 14.34% to $6.45, and Sogou fell 11.66% to $3.41. As of 11:00 on August 7th, Beijing time, Sohu’s market value was only 345 million US dollars.
Image Source: Tiger Securities
“Sohu Financial News just hit the current economic situation, the global capital market is in a state of panic, making the US stock market panic, investors have some overreaction in the panic, and have no patience to see how this quarter.” Interview just started, Zhang Chaoyang First of all, talk about the stock price issue that everyone is most concerned about.
Speaking of the mood when seeing this reaction, Zhang Chaoyang said that he was a little surprised: “I originally thought this quarter was good, and our loss reduction efforts finally saw it.”
Therefore, Zhang Chaoyang further explained that many investors saw Sohu’s loss of 50 million US dollars. In fact, this loss was included in the one-time impairment of “Jingmao”, a subsidiary of Changyou, with a one-time impairment of US$17 million.
Every reporter noticed that “Shanghai Jingmao” is a company engaged in the pre-imaging advertising business of Changyou. It was acquired by Sohu Changyou in 2011. Its official website shows that Jingmao has more than 10,000 movie screens in China. It covers more than 1,500 theater resources in more than 200 cities across the country. In its heyday, Jingmao once accounted for 40% of the total advertising market. However, due to significant losses in the past two fiscal years, Jing Mao submitted a bankruptcy liquidation application to the court at the end of July this year.
(For related reports, please read: The theater days are not good. Sohu wants to give up half of the pre-impression advertising market
“If you do not count the one-time impairment of Jingmao, Sohu’s loss is actually narrowing.” Zhang Chaoyang said, “It is expected that the losses of Sohu Media and Sohu Video will be further narrowed in the third quarter. Dropped to between $22 million and $32 million. Sohu may be profitable in the fourth quarter.”
In terms of Sohu’s various business revenues, Q2 Sohu brand advertising revenue in 2016 was US$44 million, up 2% from the previous quarter; search and search related advertising business revenue was US$276 million, up 2% from the same period in 2018. , an increase of 18% from the previous quarter. In online games, revenue was $102 million, an increase of 8% over the same period in 2018.
However, in the media and video areas that Sohu has been paying special attention to, Sohu Media and Sohu Video lost $68 million in the second quarter, a 15% loss from the same period in 2018. Every reporter observed that in the current industry pattern of iQiyi, Youku, and Tencent, which have over 80% market share, Sohu video has fallen behind to Mango TV and 哔哩哔哩.
At the scene, a reporter asked if Sohu’s book value was significantly higher than the market value. Why did not choose privatization? Zhang Chaoyang responded: “Our group is still not privatized, or it is better to stay on the Nasdaq. There is a lot of money on the account, but In different pockets, it’s a bit complicated to search for dogs and swim… Now we are turning around, we have to go ahead and fight.
The past of Zhang Chaoyang:He was busy doing yoga, climbing, and running. “Life is a process, you can’t regret it”
As the earliest pioneer of China’s Internet portal era, Zhang Chaoyang and his Sohu undoubtedly have proud capital.
Zhang Chaoyang has always been a legendary figure. On the Internet and the qualifications of the Internet, Ma Yun and Ma Huateng are the younger generations of Zhang Chaoyang. He knocked on the United States four times and sat on the listed companies of Sohu, Changyou and Sogou, and realized financial freedom very early. Even though the industry insiders have been very vocal about his evaluation, he still can’t deny his position in the industry.
Zhang Chaoyang said in an interview with the media that when he went to Shenzhen to give a speech, Ma Huateng was an audience. “He listened to my story and was very excited. Go back and do QQ.”/p>
For Zhang Chaoyang, who is now known as the “Fifty Knowing God”, the trajectory of life has probably been laid down in 1995. That year, Zhang Chaoyang, who had a halo of Tsinghua University and the Massachusetts Institute of Technology, was spurred by the “Silicon Valley” entrepreneurship that can be seen everywhere in the United States. Suddenly, he had a strong idea of returning to China.
So, in 1996, Aitexin was founded. Two years later, Zhang Chaoyang led Aitexin to launch the “Sohu” product and changed its name to Sohu. Since then, the word “Sohu” has been added to the Internet.
The situation creates a hero. The glorious moment did not make Zhang Chaoyang wait too long. Sohu was only two years after its establishment. In 2000, Zhang Chaoyang led Sohu to ring on the NASDAQ. It was also the same year. Netease and Sina, which were also called the three major portals with Sohu, went to the US to go public. The two companies together with Sohu represented the Chinese Internet on the other side of the ocean.
People who have experienced the “three portal eras” know that in the most prosperous period, Sohu Group has Sohu portal, Sogou input method, Sohu Changyou, Sohu video, Sohu focus, Sohu car, Sohu news client, Sohu Weibo community. At the 10th anniversary of its establishment, Sohu became a sponsor of the 2008 Beijing Olympic Games. The Sogou input method and online games have also developed smoothly, with performance and market value surpassing Sina, and there is no such thing.
Image Source: Video Screenshots
It is undoubtedly the most happy, comfortable, and proud time of the portal. But the most indispensable part of the Internet is the one who broke the game. With the rapid rise of Tencent, Baidu and Taobao, the dominance of portals such as Sohu began to be challenged.
The real qualitative change in the industry pattern occurred after 2008. The arrival of the mobile Internet era has sent the most critical “Dongfeng” to BAT. Taking advantage of the opportunities of this era, Baidu, Tencent and Ali respectively aimed at the three major areas of search, social and e-commerce, and quickly made efforts to make the Chinese Internet rivers and lakes gradually open the BAT era.
On this vital node, Sohu is gradually surrounded by “good culture.” After 2008, Zhang Chaoyang was busy reading books, listening to music, doing yoga, climbing, running, and almost all of the company’s affairs were taken care of by several executives. It has been reported that at that time, he did not see people related to work, and did not even reply to senior management work text messages.
Image Source: Video Screenshots
At the same time, the loss of talents has also caused Sohu to gradually lose its former advantage. COO Wang Hao, CFO Yu Chuyuan, Sohu Video CEO Deng Wei, Sohu.com Editor-in-Chief Liu Chun and other executives have resigned. Aiqiyi’s Gong Yu, the next technology Han Kun, and Youku.com Gu Yongzhen were once the effective players of Sohu’s video business.
In the on-site interview, in the face of the reporter’s question about whether the attitude of the previous Buddhist system was regretted, Zhang Chaoyang’s reflection also said: “Life cannot be regretted, life is a process, and past experiences are a fortune. , we have different stages of understanding the world, no regrets.”
After 20 years of listing on Sohus Nasdaq, Zhang Chaoyang convened an employee to open a conference before the winter of 2018. At the meeting, he said that Sohu should be the fourth in BAT and must rise again.
Zhang Chaoyang wants to change:Social product “fox friend” is the future of Sohu. “I entered the first line of sales, first make up the income”
Open Zhang Chaoyang’s Weibo, the latest news stays on the August 1st for the Fox Friends platform: the fox friend is on the shelves, use it.
In June of this year, Zhang Chaoyang announced at the new product launch conference that the social product “fox friend” is the future of Sohu. At that moment, he and Sohu finally got attention again, and Sohu focused on socializing.
This is not the first time Sohu has made up its mind to re-emerge. As early as in 2015, Zhang Chaoyang had twice retired and returned twice.
The competition in all areas of the Internet is no longer the same. In the field of information, today’s headlines have made a big hit, and with the short video of vibrato, it has become a strong competitor of BAT; in the video field, Sohu video, which has been regarded by Zhang Chaoyang as “heart-shaped meat”, is squeezed by BAT, which has stronger capital strength; in the social field, Sohu missed the opportunity because of the missed opportunity, and finally chose to give up.
Aiqiyi CEO Gong Yu (left), Zhang Chaoyang (middle), and Executive Deputy Secretary General of China Network Audiovisual Services Association Zhou Jie (right) (each data sheet)
In the interview, every reporterIt is noted that UGC has become a frequently mentioned word in the current Sohu style of play. In Zhang Chaoyang’s view, it is not possible to rely entirely on the channel’s big investment and buy so many online dramas to get DAU growth. Such growth is very expensive, and profit is never hopeful.
Different from the current BAT, in the video content, Sohu video chose a “small and beautiful” homemade strategy. “It is a long-term strategy to lower the cost of content and gradually move from PGC to UGC, and user-generated content to social networks.” Zhang Chaoyang told reporters.
Zhang Chaoyang believes that the current network drama has become mainstream. In 2019, Sohu video self-produced drama “Now Ho Boss wants to marry me”, “Seeing the Palace Lord 2”, “Haha Gym” and so on. However, for the profit of the homemade drama, Zhang Chaoyang pointed out that it is different from the social network platform. “If you spend one or two million to make a drama and make moderate adjustments in density, you can have a profit model as a whole.”
Image Source: Sohu Video Screenshots
In terms of media platform, Sohu emphasized the return to the media. Advertisers are mainly brand-based, and the size of users depends on the stickiness and socialization of UGC and PGC to maintain the growth of users.
In addition to strategic adjustments, Zhang Chaoyang gave the words “open source and thrifty” in terms of measures to keep losses down. He believes that throttling is first aimed at some costs, and in the case of people who have been streamlined, channel costs are big.
The current Zhang Chaoyang works for more than ten hours a day. “I am also selling the first line now. The income is going to be done. Brand advertising, medium and long tail advertising is more effective. With the socialization of products, we spend on channels. Money will be less, so that it will be profitable.”
On the other hand, Sohu threw away the loose “good guy culture” before. Internal management is more stringent and goal-oriented. Zhang Chaoyang realized that to achieve the goal, there is no strict management and it is unfair to the excellent people. “Now I am at the company at 7 o’clock, asking everyone to go to the company at 9 o’clock. Only when everyone is together can they communicate more efficiently. Laziness and idleness are unacceptable now.”
Dialog Zhang Chaoyang:Sohu Laojiao? “I won’t fight back”
Reporter: On August 5th, what do you think of the mood of the capital market reaction?
Zhang Chaoyang: I was a little surprised. I originally thought this.The quarter is a good quarter, and I am still happy, and finally we have seen the loss reduction. However, it was reflected in the third quarter. In the evening, investors didn’t even look carefully in the second quarter. They didn’t care much in the third quarter. They hoped to digest them for a while.
Reporter: After the release of the earnings report on August 5, Sohu’s share price fell more. Have some measures been taken to restore the stock price? Some media now say “Sohu Daddy”?
Zhang Chaoyang: The stock price has gone by it. We have started to grow profitable in one quarter. After I talked about what Sohu will do next, don’t you think so? I will not fight back, let the proof of the next quarter.
Reporter: After the new financial report was issued, there was a saying that Sohu itself had a certain gap between the search business and Baidu. Is there a certain gap between the video and the excellent love? Where is the advantage of Sohu?
Zhang Chaoyang: Sohu has delayed some distances and is now catching up.
Reporter: Why don’t you pay dividends on your account?
Zhang Chaoyang: There is a lot of money in the account. In different pockets, it’s a bit complicated to search for dogs and swim. We must continue to fight ahead.
Reporter: Since there is no plan for privatization, when will Sohu turn losses?
Zhang Chaoyang: In the fourth quarter, it is possible for the group to turn losses.
Reporter: When is the media expected to make a profit?
Zhang Chaoyang: On the one hand, the media has done a better job of advertising, including users who have accumulated PCs on computers with a large user base and users of mobile phone Sohu.com, to be better monetized. Media content is profitable by reducing channel spending.
Reporter: What difficulties does the media business face now?
Zhang Chaoyang: Various APP channels have invested too much. Various pre-installed and various application stores are costly and have a lot of water. Only by finding the way users generate content, the way social networks or semi-social networks are the right way.
Reporter: What specific measures are there for future data growth?
Zhang Chaoyang: Make a nuclear bomb hope that it can explode, uranium 235 in the process of accumulation, critical mass, need to first count the number of users (do it).
Reporter: When some big companies encounter problems, will they choose to adjust the organizational structure or change the person in charge?
Zhang Chaoyang: We have been conducting it, and we may not have reported it outside. Some people in key positions are also changing, first of all, product technology, and then to all aspects.
Reporter: Is it not convenient to give an example?
Zhang Chaoyang: No, it’s not very good for people involved.
Reporter: What happened to Feng Xin in the recent storm? What do you think about this matter?
Zhang Chaoyang: I don’t know much about the details. There is no way to evaluate them.
Reporter: Now video websites are increasing their investment in self-made dramas. How do you view the video website’s investment in self-made dramas?
Zhang Chaoyang: We are now out of a road. Nowadays, young people basically watch TV less, network dramas become mainstream, and watching TV becomes a tributary. This is a phenomenon. The demand for homemade drama is absolutely there. I said very early that this is the same as the social network department. It is not a winner, but there are many homes. You don’t have to fight for the price, it’s just a hundred flowers. The works made by hundreds of millions or hundreds of millions of dollars are too hot and cost too much. We have always proved that spending one or two million to make a drama can also be very hot.
Reporter: What is the gene before Sohu? What is the new Sohu gene?
Zhang Chaoyang: Sohu is changing a lot now, and I myself have changed a lot. In the past, I did not invest enough or the details were not enough. I lacked experience in management and took a lot of detours. Now the changes are relatively large. The first is the investment in time. A company must manage time and must invest time. Only when investing time can there be enough time to absorb information and think. Sohu is more entertaining, younger and more fashionable.
Reporter: Is there any inevitable connection between your personal experience and the difficulties faced by the entire company?
Zhang Chaoyang: It has a relationship. One is the time I spent, and I gradually rectified one department. Product technology, this year into the front of sales; income, on the one hand to reduce costs and increase income, in the high-limit income in the next few quarters should be able to see improvement, I am now free to grab income.