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"Over 5 years' anti Tencent" is a promise made by Wu Guoliang in 2007 when he was appointed CEO of Beijing Lianzhong Computer Technology Co., Ltd. However, since the end of last year, the Mandarin haired people, who are not very standard in Mandarin, have had to repeatedly clarify various rumours on micro-blog, including joint layoffs, large shareholders NHN group to divest money or Lianzhong will be bought in a big way.

Behind the rumors is the embarrassing situation of Lianzhong. In April 26th, another annual report released by 000503.SZ, which claimed to be the major shareholder of the company, showed that Lianzhong had a total revenue of 24 million 890 thousand yuan and a net loss of 14 million 318 thousand yuan last year.

A company has two major shareholders in China and abroad, which is not the most unusual. In the context of the whole online gaming industry's performance, the eligibility of the Lianzhong people is particularly lonely. According to the "white paper on Chinese online game market" published by the Ministry of culture in 2009, the scale of China's online games market reached 25 billion 800 million yuan last year, an increase of 39.5% over the same period last year. Although the growth rate has slowed down compared with the previous two years, most of the game makers still earn a lot of money. Among them, Tencent first took the place of Shanda topped the list with 20.9% of the market share, and the game revenue reached 5 billion 390 million yuan in 2009. The top twelve enterprises accounted for 87.7% of the market share, but there was no joint crowd. You know, in the heyday, the Lianzhong group occupied more than 80% share.

Lianzhong, founded in 1998 by Bao Yueqiao, Jian Jing and Wang Jianhua, can be called the initiator of the Chinese online game. To play the double button on Lianzhong, this game platform has become one of the earliest Chinese Internet companies to achieve profit. Less than three years after its establishment, it left behind the three portals of sina, Sohu and NetEase with a profit of more than 30 million yuan, thanks to its ISP mode.

Relatives or other sad, others also have songs. "Now we see little about Lianzhong." The research director of Wen Rui research center of the digital entertainment industry research institute, Cang Jian, told business weekly that Lianzhong is "once again a big loss to everyone's attention to it".

Self help and fatigue

"Please don't embarrass me. Please take our announcement or the clarification on micro-blog." Li Fang, director of Lianzhong public relations, told business weekly. To reporters' request, Lianzhong CEO Wu Guoliang finally chose silence. Wu Guoliang has been suspended rumors, Li Fang expressed ignorance.

This is in sharp contrast to Wu Guoliang's frequent high-profile appearance after the departure of the founder of the joint venture in 2007. Wu Guoliang has made drastic adjustments to the Confederation and has made great progress in the large-scale online games market that missed the opportunity. He said to Business Week: "we are confident that we can win the old seat."

The self help of Lianzhong began in the era of Bao Yue Qiao. Before and after 2003, because of the two important opportunities of missing instant messaging and large-scale graphic interface network games, Tencent and Sheng Dadeng's many small brothers' market strategy was aggressive and the golden days of Lianzhong were fleeting. Jane and Wang Jianhua quit in 2003. Bao Yueqiao, the technical genius who had successfully developed PTDOS and UCDOS Chinese character system, chose to stick to the strategy and adjust the strategy. The most important thing is to hold hands with the Korean NHN group. In February 2004, Bao Yueqiao met with the head of Korean game entertainment giant NHN group in Singapore's Bank of Hongkong Investment Forum. Two months later, NHN became a major shareholder of Lianzhong.

The connection between Wu Guoliang and Lianzhong also started at this time. As the main negotiator of NHN, Wu Guoliang joined NHN under the arrangement of CFO. NHN's Hangame interactive entertainment platform has 6 aspects: online game platform, e-commerce community, IM platform, multimedia platform, community service and VOD on demand service. While Lianzhong has a well known brand and a huge registered user, its user cohesion is not high. Lianzhong hopes to introduce new content and forms such as entertainment community, personalized virtual image, and create new profitable opportunities through cooperation with ROK. NHN also wants to take advantage of Lianzhong to enter China.

But these things, Tencent and Shanda are all doing the same. In 2004, Lianzhong business performance began to decline, but in 2005 it was slightly deficient. In order to change the situation of business slump, Lianzhong officially began to adjust its strategic plan in the second half of 2005. In early 2006, it implemented the development strategy of "returning to games, focusing on games, concentrating all internal forces on the game platform". In February 27, 2006, Bao Yue bridge, which was specially unveiled with its bald head, announced the new Logo of Lianzhong, replacing the 7 year old "red and blue circular seal" into an orange comma with the embedded letter "G". The company slogan also changed from "Chinese game world" to "happy every day". Lianzhong also announced the most important protest measures since Tencent entered the leisure game market in 2003: opening up the platform, and outsourcing wireless, search, e-commerce and other businesses to TOM online, YAHOO China, excellent network and other companies, so as to return to the home to play casual games.

However, the implementation of the new strategy was less than a year ago. At the end of 2006, the group sent mail to its employees and formally resigned from CEO, and was replaced by former CFO CFO.

Wu Guoliang led a new round of strategic adjustment of Lianzhong, and abandoned the previously identified strategy of returning to leisure games, and made every effort to enter the large-scale online games market. Prior to this, Lianzhong has adopted the global game agent platform GlobalPublishing, which was established jointly with NHN, and introduced the first large-scale graphic game of self running "soul travel". After Wu Guoliang took office, Lianzhong increased the investment in the large-scale online games with unprecedented strength: the joint operation strategy online game with Hau Yu, "three national policy 4" and the graphic game "starry home 2", acting as NHN's large-scale online game "R2", and in 2009 launched the first 3D martial arts combat network game "Jing Wu world" and so on.

But after the Spring Festival, just after the Spring Festival, Lianzhong began to be surrounded by all kinds of negative news: Yang Yongan, vice president of Lianzhong group's large-scale online games, left. Some projects such as the "Jing Wu world" and "millionaire dream" were suspended. A large number of employees did not work normally. NHN withdrew a large number of employees and planned to divest them. The grand and perfect time and space were intending to take over.

Married nonhuman

For the plight of Lianzhong, the former Lianzhong CEO Xie Wen recently said in an interview: "Haihong holdings should be responsible for the current situation of Lianzhong." He said that the Haihong holding family's atmosphere is serious, and it has long been short of investment to Lianzhong. Lacking of talent and mechanism, it lacks the arrangements and consciousness of modern enterprises, making it difficult for Lianzhong to break through in essence, making the market share of Lianzhong dropped from 85% in 2000 to less than 1%.

At present, Bao Yue Qiao, an angel investor, has also said that when Lianzhong missed the opportunity of large-scale online games, besides overly paying attention to the SP business that brought profits to him and ignoring the online games, the more important factor came from the big shareholder Haihong holding. "Haihong is considered from the perspective of the overall layout of the group. At that time, it has many large online games to do, such as" A3 "and so on. From its layout, it may feel that chess and cards should be the focus of Lianzhong. Lianzhong has also proposed the idea of marching into large-scale online games, but the board's opinion is to evaluate it and look at it again. Bao Yueqiao recalled that Lianzhong did not insist that "Haihong is still a major shareholder."

At the same time, Haihong holdings's investment in Lianzhong is also limited. According to an old employee of Haihong holding, in the four years of the most critical 1999 to 2003 of the development of Lianzhong, excluding the cost of the acquisition, Haihong invested all the funds of Lianzhong not more than 10 million yuan, and even in 2003, when the Tencent worked hard and the United States badly needed funds, there was no help from Haihong.

In the current Lianzhong numerous "scandal", NHN intends to divestment is undoubtedly the focus of attention outside. In fact, for a long time, NHN is not the same as Lianzhong. For example, when the joint agent R2 was launched in 2007, there were serious differences between the two sides. The game was developed by NHN and has been running in Korea for over a year. Lianzhong board of Directors believes that the product development is not perfect and needs further localization. However, the Korean side does not believe China's conclusion and insists that the R2 product itself has been listed in China and should be listed on schedule. Finally, Lianzhong had no choice but to compromise.

In the layout of NHN, Lianzhong has been positioned as a link between NHN and China's online gaming market, that is to say, NHN simply wants to introduce its large online games into China through Lianzhong. In developing new products independently, NHN has little support for Lianzhong. Because a large online game investment generally has to be between 20 million and 30 million yuan, and it is hard to see profits in the short term. NHN naturally does not want to invest too much money to bet. "Like culture, games also need a process of localization." Cang Jian analyzed "business weekly" that players did not buy NHN's "bringing ism".

For the decline of Lianzhong in recent years, many analysts believe that Lianzhong has started with leisure chess and card games. Loyal users are the first batch of netizens in China. Their consumption concept is more mature and they prefer Internet leisure game business. However, NHN's large-scale online games in China are relatively low in users' relative age, and the conversion rate from the former user group to the large GUI game is not high. Large online games need to spend much more time online than chess games. In the most competitive online games market, Lianzhong has a strong ability to attack the enemy.

With the cooperation of both sides Jing Wu world "For example, after the launch of the game, Lianzhong won the two awards of" China's game industry 2009 excellent enterprises "and" China's game industry 2009 most anticipated online game ". But Li Fang told reporters that the game of heavy weight on the road of Lianzhong Renaissance has been abolished. Yu Yi, an online game analyst at Analysys International, pointed out to the business weekly that "the world of martial arts" is not hard to popularize, and the game concept is also leading in domestic products, but the experience of the game is really not satisfactory. This product is quite low in user coincidence with Lianzhong's original chess game and can not be transferred smoothly.

Stock ownership questions

It is undeniable that the introduction of shareholders to solve financial difficulties or achieve alliances is almost the "standard action" in the development process of Internet companies. Unfortunately, Lianzhong did not rely on two "big trees" to ride the cool, but suffered great handicap. In addition to strategic differences, press survey found that the relationship between Lianzhong and the two shareholders is very complicated. This may be explained from another aspect: why the two big shareholders will become a stumbling block on the road to revival.

Statistics show that Haihong holdings entered Lianzhong in 1999. At that time, Lianzhong was only half a year old. It was short of funds. It sold 79% of the shares to the public network of Haihong holding subsidiary at a price of 5 million yuan, and the remaining part was evenly divided by three founders (7% each). In May 2001, Haihong holdings purchased 66.7% of the shares of the China public network and became the direct controlling shareholder of Lianzhong. In April 9, 2004, NHN bought 50% of Lianzhong 50% for $100 million.

According to the announcement issued by Haihong holding in March 11th, the two largest shareholder is holding a joint stock company through a registered company in the Cayman Islands called OurgameAssetsLimited (OAL). OAL as the head office of Lianzhong, NHN owns 55% of the shares, Haihong holding 35% stake, and OAL management has 10% stake.

But in the annual report of Haihong holding in 2009, Lianzhong and OAL all appeared as joint ventures. The annual report shows that Haihong holding 50% stake in Lianzhong, holding 35.34% stake in OAL company.

In addition, there is a clear gap between Lianzhong and OAL. According to the earnings of Haihong holdings, Lianzhong lost 15 million 127 thousand yuan in 2007, lost 363 thousand yuan in 2008, and made a profit of 647 thousand yuan in the first half of 2009, with a net loss of 14 million 318 thousand yuan a year. OAL earned 12 million 958 thousand yuan in 2007, 13 million 842 thousand yuan in 2008, 7 million 393 thousand yuan in the first half of 2009, and a net loss of 20 million 166 thousand yuan a year.

In fact, after Haihong Holdings' 2009 earnings report came out, some media had consolidated the performance of the two companies, and concluded that Lianzhong's net loss in 2009 was more than 34 million. Haihong holdings issued a notice to clarify this, and declared that "Lianzhong computer's performance did not reflect the combined performance of Lianzhong company."

about Haihong Holdings What kind of shareholding structure has been established between OAL and Lianzhong, and how OAL can get far more profits from Lianzhong? Li Fang, director of Lianzhong public relations, has not answered the enquiries of BusinessWeek reporter, but rather said "it is best to ask Haihong Holdings". But as of press release date, Haihong holding office of the secretaries has no answer. Prior to this, Xiao Hong, chairman of Haihong holding company, accepted the telephone interview of the Securities Daily reporter, who said that there are many subsidiaries under OAL, including Lianzhong computer, but the main business is the chess and card business of Lianzhong computer.

Back to the origin

It is worth mentioning that from the performance of Lianzhong nearly three years, we can see that Wu Guoliang's measures to enter the large-scale online games have achieved some success. But Li Fangxiang's business weekly said that Lianzhong has started the three year development strategy of chess and card, and will definitely focus on chess and channeling (joint operation) business in the future.

According to the plan, Lianzhong's main goal this year is to launch leisure net games such as "new landlords", "military flag" and "Dezhou Poker". In the next two years, 11 new games and new platforms will be built and promoted. The company expects the lowest number of online users in 2010, with a total annual income of 54 million 70 thousand yuan in 290 thousand. After two years of development, the online goal of 600 thousand people and the income of 142 million yuan will be completed in 2012.

In terms of joint operation, Liansheng started its own business platform "55 plan" in 2009 after creating the "18 fund" and "win the giant" plan on the front and rear of the giant and giant, providing partners with support for R & D, marketing, technology, channel, operation, customer service, and so on, with a maximum revenue of 55.

After several rounds, Lianzhong returned to the origin of leisure chess game. Cang Jian believes that the transformation of Lianzhong is in line with the market prospect. With the increasing number of Internet users in China, relaxed leisure games have more potential than large online games. But he thinks, "Shanda is now ready to fight, and the advantage of Tencent is even more obvious. Lianzhong wants to win successfully."

One of the big variables is obviously shareholder issues. Haihong holdings announced in its Clarification Announcement in March 11th that since 2004, the company has been working happily with NHN, and has not yet received formal written notice from NHN about the sale of shares, "according to the relevant agreements signed between the company and NHN company. NHN The agreement between the company and the third party to sign any share sale must be approved by the company in writing. If NHN sells its shares, Haihong holding company will perform relevant procedures to consider whether to exercise the priority of the transferee and make a notice on related matters.

In April 30th, Lianzhong company also issued a Clarification Announcement. "NHN will continue to maintain its existing cooperative relationship with Haihong group. In the high growth Chinese game market, we will continue to achieve the development direction of ourgame.com's game industry without changing it," he said.

But from the strategic adjustment that has been identified by Lianzhong, we can see that the prospect of "transnational love" between Lianzhong and NHN is not optimistic. "Or to intervene fully, or to sell as early as possible, is the two choice before NHN." Cang Jian analyzed "business weekly" that the possibility of NHN increasing investment for the Lianzhong people who lost a lot of users and their status was completely different from the past was very slim. "He surely hopes to sell a good price early."

"He looked at Zhu Lou, seeing him feast guests, seeing his building collapsed." In the Chinese online games market, which is already a strong hand, Lianzhong has to rely solely on its own efforts to reinvigorate its splendor. It is a slim chance. The key is how to learn from the lessons learned before, and to find a real takeover for the company to bring value added as soon as possible. Otherwise, even if the strategy is more in line with market rules, it may be the last lament of this dynasty.