Ignition Dimension (ID: chaintruth) original
Produced by Burning Finance
Author | Lu Jingzhi
Edit | Cao Yang
The disappointing earnings data seems to be further corroborating that the "old story" of the Internet giants is nearing the end. And these giants who are "falling on the altar" urgently need the next "myth" to "continue their lives".
Facebook's parent company Meta (FB.US) released its first-quarter 2022 financial report showing that in the case of total revenue up 7% year-on-year, Meta's net profit fell by 21% from last year. Google parent company Alphabet (NASDAQ: GOOG, GOOGL) net profit in the first quarter of 2022 fell 8% year-on-year, and total revenue growth was also the lowest since the end of 2020, at just 23%. Streaming giant NFLX.US is even more epic "rollover", in the first quarter of 2022, the loss of global paid users exceeded 200,000 people, and the revenue growth rate was less than 10%.
Not only overseas giants, but also the life of domestic Internet giants is not good. The traditional big factories led by BAT (Baidu, Tencent, Ali) and the new generation of unicorns led by Meituan, Pinduoduo, and Station B are experiencing "pain".
Tencent Holdings (00700. HK) full-year 2021 results show that net profit growth in 2021 was only 1%, the lowest increase in nearly a decade. Baidu Group (09888. HK) will see only 12% growth in its main online business in 2021. And Alibaba (09988. HK) despite a 29.8% year-on-year increase in revenue for the full year of 2021, its main business customer management revenue showed a negative year-on-year growth of 1% in the fourth quarter.
To meituan (03690. The net loss margins of the new Internet unicorns led by HK) are even more worrying. According to the financial report, Meituan's net loss for the whole year of 2021 expanded to 15.57 billion yuan.
Undoubtedly, the Internet that touched the dividend ceiling has reached a crossroads of the times, and how to find new stories has become the key to their "life extension". The giants, led by Facebook, seem to have found the next story - Web 3.0.
In October last year, Facebook changed its name to Meta (derived from metaversemeterse) and officially announced its exploration of metaverse. In fact, not only Facebook, but also the news that well-known Chinese and foreign enterprises have laid out the Web 3.0 ecological chain has been spread in recent days. Blockchain technology, NFT (non-homogeneous tokens) and meta-universe social and games have attracted much attention as the first tracks of Web 3.0 to "go out of the loop".
Overseas, on January 18 this year, Microsoft acquired Activision Blizzard for $68.7 billion, in the acquisition book, Microsoft clearly stated that the purpose of the acquisition is not only to expand Microsoft's game business on mobile and PC, but also to lay the foundation for Microsoft to build a metacosm. Chairman and CEO Satya Nadella said, "Gaming is currently the most dynamic and exciting track in the entertainment industry, and it will be the leading track for the development of the meta-universe in the future. ”
Domestically, large manufacturers led by Ali and Tencent have also begun to march towards Web3.0. Alibaba's acquisition of Hong Kong's highest-selling English-language newspaper, the South China Morning Post, has set up an NFT company, Exact Labs; Tencent in March invested in Australian NFT startup Immutable, which is now valued at $2.5 billion and is newly promoted as a unicorn.
With the continuous layout of major giants, the Concept of Web3.0 has begun to become hot in China. The search volume of Baidu index "Web3.0" has increased by 6 times compared with half a year ago. The search index in the past 7 days shows that "Web3.0" as a whole increased by 839% year-on-year, and mobile soared by 1198% year-on-year.
Figure/Baidu Search Index
Source/Baidu Index Screenshot of Burning Finance
However, in stark contrast to the fanatical layout, there is a strong skepticism about the concept of Web 3.0 in the industry.
Around Christmas last year, Tesla founder Musk publicly questioned Web 3.0, "I don't think Web 3.0 is real, it's more like a hot word for marketing now." But imagine what the future will look like in 10, 20, 30 years? 2051 sounds like crazy futurism! ”
Dorsey, former CEO of Twitter, also slammed Web 3.0, saying, "Users don't actually own Web 3.0 products, and the actual owners of Web3.0 are the venture capital firms behind the project, and their limited partners." Web 3.0 can never be separated from the incentives they set. Ultimately, Web 3.0 will be a centralized entity with different tags. ”
Will Web 3.0, which is sought after and controversial, become the next "god-making" machine of the Internet?
Web 3.0: Old Concept New Story
Web 3.0 is nothing new.
According to public information, the main radiated track of Web3.0 includes three dimensions: "application layer", "interaction layer" and "software layer". They correspond to "NFT digital collections, games, social networking and other applications", "hardware devices such as wearable devices or control devices", and "artificial intelligence and operating systems".
Figure: Some ecosystem scenarios and enterprise instances of Web3.0
Source/Koshi Lightyear Screenshot of Burning Finance
As early as 2006, Web 3.0 has been discussed, but because years of exploration have not yielded results, the topic of Web 3.0 has gradually been forgotten. Therefore, just when most Web 2.0 users believe that Web 3.0 is still an extremely advanced concept at this stage, practitioners have been exploring this concept for many years.
"I am a serial entrepreneur, initially appreciated by the boss of my first job, and co-founded a small and famous financial public account. Because of the financial media work, I have contacted some 'big names in the currency circle' and have 3-4 years of knowledge reserves for the Web 3.0 format, so I am also very confident that I can tell the professional knowledge of this industry as a 'human word' to Xiao Bai. With the image of the virtual anchor "Meta-Universe Princess" in Xiaohongshu, Douyin, B Station and other platforms to explain the web 3.0 format of professional content content creator "Meta-Universe Princess", as early as three years ago has begun to explore Web 3.0 related knowledge.
Like the "Meta-Universe Princess", Xiao Yuchen, a VC entrepreneur, was also "circled" by Web3.0, but Xiao Yuchen also experienced an inner struggle in the process of being "circled".
"I've always thought that Bitcoin is a 'Ponzi scheme', after all, this is completely inconsistent with my value system of doing traditional VCs." Xiao Yuchen told Burning Finance that he bought bitcoin by accident and sold it about 2 years later. "After getting an investment that was far more than I could have imagined, I had the desire to learn more about blockchain technology."
Jack, co-founder of a digital collection platform in Shanghai, has been exposed to blockchain technology since 2014. Three years later, Jack was full-time engaged in the development, investment and other projects of blockchain technology, and officially began the entrepreneurship of the digital collection platform at the end of 2020.
"Unlike the so-called NFT or digital collectors who have entered the industry, we have long seen this technology in the blockchain field in the domestic imagination space. Now NFTs and digital collections are a whole new track, so we want to seize this opportunity to become the first echelon 'evangelists' with Internet giants such as Ali and Tencent, and create a new unicorn company with a new track. “
In the view of the meta-universe princess, the change of the Web 3.0 ecology to the Web 2.0 ecological practitioners is of subversive significance.
"Web 3.0 Rich Creators." Meta-universe princess said that the entire Web 3.0 ecosystem is a reform of data, ownership and user relations. "In the Web 2.0 era, we have upgraded from Web 1.0, which can only read information, to a readable and writable form, but there are many deficiencies in the protection of creators' rights and interests. It is not uncommon for manuscripts to be forwarded, stolen, tampered with, and so on without authorization. However, Web 3.0 can be more clearly confirmed and profitable, that is, all users who use content need to 'pay' the author with virtual currency or tools such as NFTs, and the creator also retains 100% ownership of the work. ”
"For example, a friend of mine wrote an article about the unfair treatment of content creation in Web 2.0, which was included in the Web 3.0 content platform Mirror, who gave him an NFT tip worth 300,000 yuan. This is the Web 2.0 era, which is unimaginable to creators. Meta-Cosmic Princess added.
Xiao Yuchen quipped, "There will be a joke metaphor in the investment circle, the VC who invests in the traditional Internet is called 'Old Money', and the investment in the Web 3.0 field is called 'New Money'." Before 2020, 'Old Money' was not worthy of 'New Money', but after the Web 3.0 fire last year, traditional VCs including Sequoia Capital also explored new areas. ”
As Xiao Yuchen said, IT Orange data shows that Sequoia Capital has participated in many investment events in the virtual human ecology and virtual game industry chain this year and last year; IDG China also laid out a blockchain trading platform and a digital asset custody platform in 2021; in August 2021, China Merchants Securities participated in the financing of North American blockchain company Cyclus with $1 million.
"There is also a difference between investment in the Web 3.0 track and traditional investment, and we will pay more attention to the team background, and whether the investors and financial strength behind it can support them to complete what they want to do." In addition, the round of financing is also a point that Xiao Yuchen attaches great importance to when investing in the Web3 track.
"Because this track is still a very new track, there is not much data to refer to and benchmark. On the one hand, this requires a lot of 'intuition' and experience for VCs, and on the other hand, it is also possible to avoid premature entry leading to valuation biases. This is also slightly different from traditional VCs that invest in mature tracks. ”
However, even though Web 3.0 is still an absolute new thing for the public, the above practitioners have a positive attitude towards it. The Meta-Universe Princess said that after the number of fans reaches a certain number in the future, she will try to monetize new "gameplay" such as NFTs that issue its own avatars. "I also want to be a model for all creators who want to try Web 3.0 content and tell them that there are more diverse possibilities in this field."
Xiao Yuchen said, "After the establishment of systematic standards in the future, there will be more injection of large capital, and it will naturally create more opportunities." ”
The layout of Web 3.0
Of course, it is not only the above-mentioned "new players" who see the opportunity, but the layout of the Internet giants is much earlier.
According to the report of "Brief Analysis of Scene Ecology under the Concept of Web3.0", the layout of Web3.0 by manufacturers at home and abroad mostly begins with the two tracks of game and interaction layer (such as wearable devices).
Figure/ Web3.0 investment layout of major domestic and foreign manufacturers
Source/Koshi Lightyear Screenshot of Burning Finance
Roblox, a game platform known as the "first share of the metaverse", began to launch its Roblox Studio development engine and its own monetary system as early as 2010; Google and Microsoft also began to lay out Web3.0 in 2012 and 2013, respectively. Among them, Google launched the wearable glasses Google Glass in 2012, and Microsoft acquired Mojang, the developer of the game Minecraft, in 2013.
Domestically, Tencent and Ali are both players with earlier layouts. Among them, Tencent invested from the game ecological chain, and Ali chose to start from the interaction layer.
In 2012, Tencent acquired a 48.4% stake in Epic Games' issued share capital for $330 million. According to the data, the latter is an American VR game developer. Alibaba led a $827 million Series C round of funding from wearables technology company Magic Leap in 2016. In March of the same year, Ali first revealed the company's VR strategy, and announced the establishment of the VR lab GM Lab, and launched the Taobao VR shopping product Buy+ in November slightly later.
Zhao Xiaoma, a partner at CIC Insight Consulting, told Burning Finance that information technology often reaches ordinary people through entertainment first. Web 3.0 includes a series of new technologies such as AR/VR, blockchain, virtual puppets, etc., focusing on the new experience of virtualization. These are two main reasons why most vendors' exploration of the Web 3.0 space begins with gaming and interactive devices.
As Zhao Xiaoma said, starting from 2020, domestic manufacturers have successively joined the layout of the Web3.0 plate.
IT Orange data shows that Xiaomi has participated in Web3.0 concept investments such as 3D modeling, gamification virtual space platform SaaS and proposed AI technology for three consecutive years in 2020, 2021 and January this year. Byte acquired A-SOUL, a key virtual person idol, in June 2021, and participated in the strategic investment of wearable device company Li Weike in January this year.
In addition to investment in interactive devices and games, the three giants of Alibaba, Tencent and Byte have successively laid out the NFT and digital collection fields in recent years.
In June 2021, the Alipay Mini Program "Whale Detective" (formerly known as Ant Chain Fan Grain) debuted the limited edition Dunhuang Feitian and Nine Colored Deer Digital Collection. According to the Financial Associated Press, since Alipay first launched the NFT digital collection, as of January this year, there have been 46 sets and 237 kinds of digital collections totaling 2.945 million copies through ant chain, with sales reaching 37.787 million yuan.
Burning Finance found that the platform currently renamed "Whale Detective" will issue 1-2 NFT digital collections per day, limited to 8,000-10,000 copies.
Tencent's layout in the NFT field is more cautious than That of Ali.
Unlike Alibaba, which directly develops the NFT digital collection platform in the Alipay Mini Program, Tencent has chosen to release an independent NFT transaction APP. In August 2021, Tencent launched its NFT trading software "Phantom Core", and sold 300 "Audio "Thirteen Invitations" Digital Art Collection NFT" in the first term.
According to the Financial Associated Press, as of January this year, the "Magic Core" has issued a total of 10 models and a total of 29,067 digital collectibles in addition to the "Thirteen Invitations", totaling 1556348 yuan.
In October of the same year, ByteDance's TikTok launched its first NFT series, TikTok Top Moments, and TikTok also bought a full-page advertisement in the New York Times that "NFTs will be introduced to reward content creation."
Web 3.0: Urgently needed to be "defined"
"The ideal is very full, the reality is very bone" is used to describe the development of the current Web 3.0 or it is most appropriate.
Just as any industry's evolution from barbaric growth to scale requires a process of being defined and regulated, so does Web 3.0. Even though Web 3.0 has been debated by giants, no one seems to really tell the public "What exactly is Web 3.0?" ”
In fact, so far, the definition of Web3.0 has not been a uniform and standardized answer in academics, and practitioners and investors are also in the stage of "benevolence".
"Web 3.0 is an intermediary-free read-write network for me, to use an example that I don't know if it is appropriate, that is, if in today's Web 2.0 era, the Internet is a company, then the creators are thousands of employees. In Web 3.0, everyone is like an independent 'self-employed', able to fully grasp their own work and data. The Metaverse Princess said.
Xiao Yuchen said bluntly that in the Web 2.0 era, data is in the server, content is in the cloud, and assets are in financial institutions. In the Web 3.0 era, everything about the user belongs to the user.
"I feel that the core of the Web 3.0 world is to integrate the digital world more organically with our lives, not the obvious fragmentation that we observe now." Zhao Xiaoma said that ordinary people can have more dominance and no longer become "data workers" in the recommendation system and advertising system.
However, it is worth noting that when an industry cannot be clearly defined, on the one hand, it means that there is still a wealth of imagination space; on the other hand, it also means that the industry lacks standards and is full of chaos.
"In recent years, there have been many projects in the name of 'blockchain', and in the early stage of development of the industry, there is no clear specification, and many investors are not clear about how to evaluate, and there are not a few who are deceived." Xiao Yuchen told Burning Finance that at present, there is no systematic specification for the field of Web3.0, whether overseas or domestic.
This is why many investors do not dare to invest money at will even if they value the growth ability of this market. More people are cautious about investing or observing the state, waiting for clear regulations. ”
In fact, for the "clear norms" mentioned by Xiao Yuchen, China has begun to introduce policies to rectify the chaos in the industry.
On April 13, the China Internet Finance Association, the China Banking Association, the Securities Association of China and other three associations jointly issued the "Initiative on Preventing NFT-related Financial Risks" (hereinafter referred to as the "Initiative").
In the "Initiative", it is forbidden for the underlying products of NFTs to include financial assets such as insurance and credit, to issue financial products in disguise, and to divide the ownership of NFTs to "securitize" NFTs. At the same time, in the domestic environment of restricting the issuance of coins, it is forbidden for NFTs to issue and trade tokens in virtual currencies.
"The current policy is not 'one size fits all' but to regulate transactions, which in itself is good news for NFTs, indicating that the value of NFTs is recognized, but the operational behavior in the industry needs to be regulated." Jack said that NFTs are a whole new field, and without clear regulations, large capital does not dare to rush in. The clearer the specification, the better the good news for the NFT.
At the same time, in addition to games and wearables, what other tracks are worth mining under the Web 3.0 concept? In fact, it is also a question that practitioners ponder deeply.
"I think privacy computing will be the next big track of Web 3.0 to 'get out of the loop'." Zhao Xiaoma analyzed that the significance of privacy computing is to protect user privacy data to the greatest extent, while also allowing Internet tools such as recommendation systems and advertisements to provide services.
Zhao Xiaoma added that the Data Security Law promulgated last year, the telecommunications fraud issues that have attracted much national attention, overseas listings, national security issues involving user data, etc. will promote privacy calculations to a more important investment position.
"In addition, in the context of accelerating the promotion of digital industrialization, enhancing key technological innovation capabilities will also be an important significance of Web 3.0." Zhao Xiaoma said that good technology companies will become infrastructure providers in the development of the digital economy.
"At present, there are three important infrastructure construction themes in Web 3.0 - privacy computing, metacosm and programmable finance, based on these themes, the connotation and extension of Web 3.0 can be continuously enriched and expanded, making the Internet more open, inclusive and secure, and developing to a higher level." Zhao Xiaoma stressed.
Bibliography:
$68.7 Billion! Microsoft buys Blizzard at a sky-high price" source: Beijing Daily;
Musk Review web3: Not real, more like marketing terms, source: The Paper;
Does Web 3.0, which was sung down by Musk and Dorsey, really have no future? Source: Everyone is a product manager;
"After experiencing Ali Buy+, I feel that the essence of VR is "transportation"", source: 36Kr;
"Ali Jingdong Tencent accelerates the layout, China's NFT has entered the deep water area? Source: BT Finance;
"170 billion yuan of NFT market Card slot war between Ali, Tencent, ByteDance, and JD.com", source: Cailian Social Science Chuangxin Daily;
"NFT New Regulations Issued to Guide the Healthy Development of Domestic NFTs", Source: Sohu.com;
"Netflix, which insists on the whole process of no breadth, can't hold up the loss of users and the folding of stock prices, can paid sharing become a new engine?" Source: China Economic Network.
*The caption image is from Visual China.
*In the text, Xiao Yuchen is a pseudonym.
*Disclaimer: In no event shall the information herein or the opinions expressed herein constitute investment advice to any person.