Chapter 341: Worthless

That number made Fang Hong and Gao Zhun exchange a glance.

It exceeded the figure they had in mind; originally they had estimated somewhere between 4 and 5 billion.

Qidian at 300 million US dollars, around 2.1 billion is about right, because Qidian contributed 60% of Shengda Literature's revenue.

Shengda Literature could make money, and Qidian deserves a lot of the credit.

That was also why Fang Hong only wanted Qidian; the rest he didn't really want.

It was also why the other side insisted on bundling it — without Qidian, the rest would be a loss, so who would take it?

Of course, the current Shengda Literature hadn't yet been besieged to the point where it absolutely had to sell, so it was understandable that they could quote that price.

In his past life, the sale didn't happen until the end of next year either — only after being beaten back step by step by several major platforms, going through a failed IPO, team departures, internal turmoil, the CEO stepping down, and a string of other massive blows did they finally sell to Tencent.

Before the sale, Shengda kept denying it — you can imagine how reluctant they were.

The team departures had already happened in March; after that came internal turmoil, with a large batch of core staff leaving, and the CEO developing depression and stepping down.

This is the war of capital — it can grind a person down like that; you can imagine how bloody it was, not to mention that Baidu and Tencent both had platform advantages.

Otherwise, did you think Chen Tianqiao would sell Shengda Literature to Tencent? He probably hated Tencent to death; the main thing was he had no choice but to sell — no team, no capital.

Unless new capital came in, there was no way to keep playing against those people.

"Our valuation of Shengda Literature is about 4.5 billion. You suddenly added so much money — are you treating us at Chang'e as suckers?"

Gao Zhun paused, then said again: "To put it bluntly, with that kind of money, we might as well do it ourselves. The literary market right now is a mess anyway — who wins and who loses is still anyone's guess."

Those words were rather sharp, so only she could say them; Fang Hong couldn't, because saying it would offend people. As long as he didn't say it, there was room to maneuver.

"If you build your own platform, the team costs, resource costs, marketing, and so on — the time, labor, and resources that would eat up are beyond estimation.

Taking our Shengda Literature is like taking something ready-made: you get the team, you get the platform, you save on marketing — all you have to do is run it well. That saves you a great deal of cost and time, and those costs can't be measured in money either."

That was said by Luo Qianqian.

Still, what she said made sense. If Chang'e did it themselves, they'd have to build a team, divert resources, do marketing, and so on — and it still might not work out.

Didn't Alibaba crash and burn? All that hype and they never got it off the ground — and they had the money and the resources, didn't they?

"This is the era of mobile internet. The mobile end-points are still waiting to be developed — it's a blue-ocean market to begin with. And even if we take your platform, we still have to face the risk of being targeted from outside." Gao Zhun said.

Right now Shengda Literature was the target of everyone's attacks; if it ended up in Chang'e's hands, Chang'e would be the target too.

"We've already accumulated a large library of books, and those books have already built up a reader base. Even if you start over, you'd still need time to build the library up to a certain level. And besides — would doing it yourselves come without risk?" Luo Qianqian argued her case forcefully too.

Building up a book library really does take time, because web novels aren't like traditional industries — web novels have to be serialized, and a million characters takes at least several months to write.

To fill the library to a certain level takes at least a year or so, and that's the fast version, and most of the content is still junk.

The two went back and forth, neither able to convince the other; both made valid points. Negotiation is like that — you lay out your own strengths and the other side's weaknesses.

One trying to push the price down, the other trying to push it up!

"President Chen, Shengda Literature is a very good platform, and I'm very optimistic about it, but the price is beyond what we expected. I don't think there are many people in the market who could take it on."

Fang Hong first affirmed his strong interest in the platform, then hinted that the price wasn't right, and pointed out that Shengda had no choice either, adding: "Your options aren't many either. Alibaba won't take it, Baidu has its own — are you going to sell to Tencent?"

"Of course I won't sell to Tencent." Chen Tianqiao blurted out.

He hated Tencent to death — they poached his team, competed maliciously, and drove him into a situation besieged from within and without. How could he possibly sell to them?

His thinking right now was exactly that; otherwise in his past life he wouldn't have held out so long either — only when he couldn't hold on any longer did he sell.

But the moment the words left his mouth, Chen Tianqiao regretted it — this guy was pretty good at drawing him out.

"Then that's settled. I'm very sincere, and I hope President Chen can give a suitable price." Fang Hong said earnestly.

"I can feel President Fang's sincerity, but I want to make one thing clear: Shengda Literature is a matter of whether I want to sell, not whether anyone is willing to take it over. As long as I want to sell, grudges or no grudges, I can put them aside." Chen Tianqiao was backfilling what he'd just said.

He'd just been careless and let the guy draw the words out of him.

"That's natural. As long as there's profit to be had, any grudge can be set aside." Fang Hong agreed.

"But I'm also not the kind of person who only cares about profit. I'd still rather sell Shengda Literature to someone I like. Whoever can make me feel comfortable — a little more money or a little less, I can accept. If President Fang is interested, we can talk again." Chen Tianqiao was trying to keep the other side on the hook again.

After all, Principal had no grudge against him. Rather than giving it to Principal, it was still better than giving it to Baidu or Tencent — those two had ruined his mood, especially Tencent.

"Sure, then let's leave it here for today. We'll find a time to meet again and talk in detail." Fang Hong stood up and extended his hand.

Chen Tianqiao shook hands with him.

Such a large sum, such a big business, such a major acquisition — it wasn't something that could be wrapped up in just one or two meetings.

It would take some time. The other side needed to look at Chang'e's strength, gauge the market winds, and discuss whether 4.5 billion was appropriate. Gao Zhun had just let slip the figure of 4.5 billion — that was a signal.

And Fang Hong also needed time to raise the funds. Without money, no amount of talk was anything but empty words; without money, you didn't even have the confidence to negotiate.

If he had the money, when the other side said 5.5 billion, he could agree on the spot, sign the contract right away, very readily — but he didn't.

This meeting only needed to make his intent clear to the other side; if either party changed their mind, they could notify the other.

After seeing the two of them out, Gao Zhun asked: "President Fang, are we really going to acquire Shengda Literature?"

"Yes. Even if they raise the price, we still acquire it — we must have it." Fang Hong said firmly.

This wasn't a matter of money or not — it concerned his IP library, an important piece of the whole chain.

With literature in hand, as long as you ran it well, you wouldn't need to buy other people's rights to adapt for film, TV, or animation — you'd have your own IP incubator.

"The web-novel world is fighting hard right now. If you take this over, it's like grabbing a hot potato — everyone will come after us." Gao Zhun said worriedly.

That was the core issue. If they took over Shengda Literature, the entire web-novel circle would gang up on them. Shengda couldn't handle it, and at Chang'e's size, they could handle it even less.

That was a very difficult thing!

"It's fine, I know what I'm doing." Fang Hong said.

He didn't care about the attacks from outside. As long as he kept a low profile, his opponents would make mistakes on their own.

Those internet companies, at the start they made a huge splash — great policies, money thrown around everywhere — but very soon they'd show fatigue and make mistakes of their own.

Web novels aren't like other things. It's not about who has more money or more power — it's about content, about authors.

Plenty of great authors and good content will naturally draw a large readership.

If the content isn't good and there aren't enough authors, no amount of money will help. Of course, authors also care about money — about whether they can make a living.

In fact, sometimes the struggle is very simple — it just depends on who doesn't make mistakes. As long as you don't make mistakes, you can hold onto your base.

It's already an era of comparing who's worse. As long as he does a little better than others, just a little better, the opponent will self-destruct on their own.

"Right, help me assess Chang'e's assets, and by the way, help me set up a meeting with a bank manager to see if any of them are willing to lend to us." Fang Hong still needed to borrow money.

Without borrowing money, he simply couldn't open up the situation.

Besides, this was a matter for Chang'e Technology — it couldn't be done in Yutu's name. For Yutu, the only options were Fang Hong pledging his personal equity, or taking it as a personal loan.

"General Manager Fang, I'll say something you won't like to hear. Apart from games, every other sector of Chang'e is currently in the red. And with data like this, banks simply won't appraise it too highly — you won't be able to borrow much." Gao Zhun stated.

Industries like the internet find it hard to borrow too much from banks. Unless you have the scale of a BAT, only then will banks feel reassured.

That's also because those companies were already making money, had office buildings, had connections, and paid a lot of taxes.

What does Chang'e have? Apart from a pile of data, the office space is all rented. Only the equipment is worth some money, and that stuff depreciates by nature.

In the eyes of banks, apart from things they can tangibly see, data means nothing to them — it simply doesn't hold its value, so they can't appraise it too highly.

Say games are making money — in the eyes of banks, games are also just data. Data carries enormous risk: today people play it and it has value, tomorrow nobody plays it and it's worth nothing.

That's why many internet companies can only seek capital investment — going to banks simply doesn't work. Banks prefer things that are solid, things they can see and touch.

Take real estate, for example — with land, steel, and cement, in the eyes of banks that's worth money. That's also why real estate can borrow easily from banks.

It's also why some companies can borrow hundreds of billions, even trillions — their real, tangible assets are right there in front of you.

Additionally, physical factories find it relatively easy to borrow money too — the premises and equipment are right before their eyes, easy to appraise.

"I know. Help me set up the meeting first." Fang Hong wanted to see how much he could borrow — whatever he could get was something. He'd see if he could think of other ways from elsewhere.

"Alright! I'll set it up for you." Gao Zhun nodded.

In fact, Fang Hong understood this too. The previous Yutu was the same — couldn't borrow much. It was only after the film had box office numbers that they managed to borrow tens of millions.

Before that, they wouldn't borrow too much.

Because in the eyes of banks, film and television is also just data — data sitting on a hard drive. You say this stuff is worth money? They say it's worth nothing.

You have to release it for people to see before it can show its value. If you don't let people see it, it's worthless.

Back in the day, when Feng Kuzi borrowed money from the bank to make a film, he first took out insurance, and only then did the bank lend the money. And the loan wasn't based on the film itself, but on the value of Feng Kuzi as a person.

When Wu Jing filmed "Wolf Warrior," he also mortgaged his house. You think the bank cares how awesome your movie is?

Impossible. The bank thinks your film is worth nothing — that's just how reality is!

Try to raise funds from the bank first; if it doesn't work, then we'll talk and think of other ways.

(End of chapter)