Chapter 522 Selling YouTube
On February 25, 2007, Woaw Technology announced that it had reached an acquisition agreement with YouTube. They would complete the acquisition of the video sharing website for US$1.75 billion.
It can be said that with the financial support of IC Capital, YouTube has developed very rapidly - at the same time, after several rounds of financing from IC Capital, they already hold 70% of YouTube's shares.
By last year, in the second half of 2006, YouTube already had 50 million videos, watched by more than 7 million people every day...
YouTube has also become the number one video company in the United States. , the market share reached 45% - which is nearly twice the second place MySpace's 23.5%, and more than the combined video share of the four major American portals Yahoo, Microsoft MSN, Google Video and America Online AOL!
It can be said that the rise of YouTube has made many people see the prospects of the video industry. Starting from the second half of last year, companies such as SoftBank, Yahoo, News Corporation of America, and Google have respectively offered olive branches and prepared to acquire YouTube.
However, with the help of IC Capital - although IC Capital holds up to 70% of the shares of YouTube, they have been able to maintain their investment in YouTube. A huge reason is that Ivanta respects it very much. YouTube's entrepreneurial team rarely interfered with their management of the company's business operations - YouTube eventually chose Woaw Technology and reached an agreement with them.
The acquisition price of US$1.75 billion can be said to be astonishing. This is also the second largest acquisition since the establishment of Woaw Technology - second only to the US$3.15 billion when they acquired DoubleClick.
This acquisition will be carried out in the form of cash and stock. Woaw Technology will pay US$500 million in cash and issue an additional 217.4 million Class B ordinary shares to YouTube shareholders to complete the acquisition.
IC Capital will receive US$350 million in cash and 152 million Woaw shares; the YouTube founding team will receive US$150 million in cash and 65.22 million Woaw technology shares.
Woaw itself provides users with video sharing and uploading functions, but those are just ancillary functions.
After completing this acquisition, YouTube will become a wholly-owned subsidiary of Woaw Technology, and its videos can also be interconnected with Woaw.com. Users can directly share the videos they publish on YouTube to their Woaw Personal page, you can also easily watch videos posted by their Woaw friends.
The founding team of YouTube will continue to be responsible for the operation of the company and receive more resource support from Woaw Technology.
At this point, the total share capital of Woaw Technology has increased to nearly 4.8 billion shares, of which DS Holdings (Cavendish Trust Fund) holds approximately 2 billion Woaw shares (originally 2.2 billion shares, which have been successively reduced Holding), accounting for 41.67%, and its voting rights hold 57.6%.
IC Capital holds approximately 812 million Woaw shares (the 660 million shares obtained from the sale of DoubleClick were mortgaged), accounting for 16.92%, and the voting rights hold 12.3%.
At this time, Barron still controls nearly 70% of Woaw’s voting rights.
After announcing the completion of the acquisition of YouTube, Woaw's stock price rose slightly by 2.5% to $5.89. At this point, its market value exceeded $28 billion.
After acquiring YouTube, Woaw Technology announced that they will successively launch multi-language versions of YouTube services, and will launch a "Creator Incentive Program" of up to US$1 billion. YouTubers' original content can be based on their The obtained views, user likes and coin input data will result in generous advertising revenue sharing.
The release of this "Creator Incentive Program" has made many YouTubers happy, and more young people have begun to try to produce video content on YouTube.
In addition, YouTube will also cooperate with the R&D center of Woaw Technology to continue to optimize their streaming technology.
In fact, the reason why IC Capital chose to sell YouTube to Woaw Technology instead of developing it on its own is because YouTube can develop collaboratively with Woaw.
In Barron's previous life, even nearly ten years after Google acquired YouTube, although YouTube had become a cultural phenomenon by that time, with more than one billion users watching YouTube videos every month, YouTube still could not profit.
For example, in 2014, YouTube’s revenue was approximately US$4 billion, higher than US$3 billion in 2013. However, although YouTube contributed approximately 6% of Google’s revenue at that time, YouTube’s Nothing has been achieved in terms of profitability.
YouTube pays fees to content creators and purchases network equipment. After deducting these fees, YouTube can basically only maintain breakeven. With the financial strength of IC Capital, it is not impossible to "support" YouTube forever, but apart from making YouTube's valuation higher and higher, there is no obvious benefit - unless they eventually sell YouTube.
Woaw is different. Their combination with YouTube has a synergistic effect. Not only social + video can improve its business format and increase the width of its moat, but YouTube can also use Woaw's powerful advertising to increase its revenue.
In addition, IC Capital can also convert its investment in YouTube into Woaw stocks. After gradually reducing its holdings, the cash obtained can be used to buy lows after the subprime mortgage crisis.
......
"It's an honor to see you again, Your Highness the Duke."
"I really didn't expect to see you here, Miss Borromeo, right? It’s the holidays now, isn’t it?”
In Italy, Barron met Beatrice Borromeo, the youngest daughter of the Borromeo family.
This is when Barron came here after the Gucci-Hermès Group had just acquired Bruno Magli, the famous Italian luxury shoe brand, and met him in the northern Italian city of Bologna. Arrived at Beatrice.
Speaking of Bruno Magli, this is a long-standing brand founded in 1936. Bruno Magli always believes that shoes are a kind of walking art, and it also takes natural art as its design aspect. The main emphasis is on the coexistence of comfort and elegance. Each pair of shoes is made of high-end materials and handmade by professional craftsmen.
With its excellent design, elegant styles, superb shoemaking technology, and luxurious and comfortable texture, BrunoMagli has quickly become one of the main competitors in the Italian shoemaking industry and is deeply loved in Europe and the United States. Loved by celebrities and nobles.
In 1968, the second generation of the Magli family successfully promoted the brand to the leading Italian luxury brand.
After a long period of development, the BrunoMagli brand is now spread all over the world. It is unique among international high-end department store footwear brands such as Takashimaya, Macy's, Saks Fifth Avenue, Lord & Taylor, and is recognized by the world. Revered as "the best shoes in the world".
Brumani has always been a typical Italian family business until December 2001, when Opera, a fund company specializing in investing in Italian lifestyle, signed a contract with the Magli family to officially take over the company.
Currently in Asia, Brummani also has a branch in Tokyo, Japan.
After the Gucci-Hermès Group acquired all shares of Brummani from the Opera Fund and the Magli family, some members of the Magli family will still stay in the company, continuing the classic Italian style in Brummani Handmade shoe standards.
“Yes, I came here to visit. In fact, the University of Bologna here was also the school I hoped to study...”
"You... came here to play by yourself?"
Hearing Beatrice's answer, Barron asked strangely.
"Well, actually, I came here with a few friends, and I just saw a good snack bar, and I saw you as soon as I came out..."
(End of this chapter )