The scenery of Momo was vividly reflected in a team building that could not hide Lufu in 2018.
In August 2018, more than 2,000 employees around the world took 82 flights from Beijing, Shanghai, Chengdu, New Delhi, Kuala Lumpur and other cities to Tokyo, Japan, and booked more than 800 local hotel rooms at one time...
This grand carnival, such a wealth and lavish money, has attracted the envy of all Internet industry people. However, this scenery did not last long, and it was only about a year later that Momo began to decline. It can be clearly seen from the financial report that Momo reached the peak of performance in revenue and net profit in 2019, and began to decline sharply in 2020.
In October 2020, when Tang Yan handed over the company to Wang Li, then COO, Momo's revenue and profit had both declined year-on-year. Two years later, in October 2022, Tang Yan took over the CEO position from Wang Li and became the "savior" who was about to turn Momo Building down.
It can almost be said that the two years since Tang Yan handed over the baton to Wang Li have perfectly avoided the difficult business period affected by the epidemic (see Chapter 1 for details), and from a hindsight point of view, Tang Yan is even suspected of "throwing the pot".
And Wang Li's role during his tenure, in addition to "backing the pot", seems to be only to change the company's name and use "Zhiwen Group" to dilute its label of "hooking up software". Now, Tang Yan has been back for nearly half a year and has handed over his first financial report, but judging from his current results, he has not become Momo's "savior".
On March 16, 2023, Zhiwen Group (Momo's parent company) announced its 2022 Q4 and full-year financial reports, the data shows that in 2022, Zhiwen Group recorded a total revenue of 12.7042 billion yuan, down 12.8% year-on-year, and a net profit of 1.8858 billion yuan, of which Q4 revenue was 3.2127 billion yuan and net profit was 398.0 million yuan, making profits for 32 consecutive quarters.
Judging from the financial report, Momo is still a skinny camel bigger than a horse, although it is going downhill, but the profitability is good. However, this is the first report card handed over by Tang Yan returning to the position of CEO, but it is obviously not ideal. This overall decline is directly related to the decline of the live broadcast business, which accounts for the majority of Momo's revenue, and the continuous loss of Tantan.
Therefore, when Tang Yan took over as CEO again, a question that had lingered in the outside world was inevitably revisited: Can this old captain still save Momo, a giant ship that has sailed into a lost path?
01 disappeared big brother on the list
Zhiwen Group's revenue consists of five parts, namely live streaming service revenue, value-added service revenue, mobile marketing revenue, mobile game revenue and other service revenue. Among them, live streaming service revenue and value-added service revenue are the company's main sources of revenue, accounting for 53.7% and 45% of Zhiwen Group's revenue respectively in Q4 22.
From the specific data, in Q4 22, the live broadcast service revenue of Zhiwen Group was 1,724.2 million yuan, a year-on-year decrease of 19.8%, a year-on-year decline for 12 consecutive quarters, while the total revenue of Zhiwen Group also happened to decline for 12 consecutive quarters; As the second largest source of revenue for Zhiwen Group, value-added service revenue contributed 1,449.5 million yuan in Q4 22, down only 1.8% year-on-year.
In contrast, it is obviously self-evident which piece of business is "dragging down" Zhiwen Group. For the poor performance of the live streaming business, the explanation given in the earnings report is that the decline is mainly due to changes in the epidemic and regulatory policies, as well as a surge in new crown infections and reduced channel investment at the end of last year. This reveals a feature of Momo Live Broadcast, which is obviously online revenue, but relies heavily on offline activities to achieve.
The founder of a live broadcast guild of Yingke and Momo once said: "The most important thing for social users on Momo is to meet offline. Watching live broadcasts is also to meet the anchor offline. If the anchor can't meet, it's useless for the big brother to give a tip." Therefore, unlike other online businesses and live streaming platforms, Momo has benefited from offline restrictions caused by the epidemic, but has been damaged by the inconvenience of meeting offline.
In 2020, Tang Yan turned away, leaving a mess where revenue and profits began to decline, and an extremely unfavorable external operating environment, to the new CEO Wang Li. But now, the epidemic has ended and Tang Yan has returned, why can't Momo's live broadcast business still work? The reason is that in 2022, there are new regulations for regulatory policies.
On March 30, 2022, the Cyberspace Administration of China and other institutions jointly issued the Opinions on Further Regulating the Profit-making Behavior of Online Livestreaming to Promote the Healthy Development of the Industry, which stipulates that a reasonable upper limit should be set for individual virtual consumer goods and the amount of a single tip; Set a cooling-off period and a delayed arrival period if necessary.
Two months later, on May 7, the four ministries and commissions jointly issued the "Opinions on Regulating Online Live Streaming Tipping and Strengthening the Protection of Minors", which stipulates that online platforms should cancel all tip lists within one month of the issuance of this opinion, prohibit the ranking, drainage, and recommendation of online anchors based on the only basis of the amount of tips, and prohibit the ranking of users based on the amount of tips.
And Momo earns live broadcast income precisely through user tips to anchors and platform shares, and the introduction of new live broadcast regulations is tantamount to drawing salary from the bottom for Momo.
In addition, the previous LBS social network actually led to a large number of judicial dispute cases, and in fact, a large number of judicial cases eventually pointed to the platform to get to know the people involved in the case is Momo. This has led to stricter censorship of Momo, and Momo's self-castration of live content has become more and more serious.
It can be said that even if there is no dividend disappearing and no impact of the epidemic, it is reasonable for Momo's live broadcast business to shrink, and the epidemic is just to advance the time.
At the same time, Q4 mobile marketing revenue was 32.9 million yuan, compared with 25.4 million yuan in the same period last year, a year-on-year increase of 29.8%; Mobile game revenue was 5.3 million yuan, compared with 19.3 million yuan in the same period last year, a year-on-year decrease of 72.4%.
Mobile marketing revenue and game revenue contributed very little to Momo (only about 1%), and the combined revenue of the two fell by 14.5% year-on-year, showing a continuous decline, which in turn led to the increasing dependence of Zhiwen Group on live streaming revenue and value-added business revenue.
On the other hand, Momo's original acquisition of Tantan for nearly US$760 million (including 5.3 million Momo's Class A shares and US$600.9 million in cash) seems difficult to say now.
According to the financial report, the net revenue of Tantan in the fourth quarter of 2022 was 346.7 million yuan, down 20.7% year-on-year; In terms of monthly activity, Tantan's MAU fell further, with 18.4 million MAUs in December last year, compared with 27 million in the same period in 2021; In Q4 2022, there were 1.7 million paying users, down 32% year-on-year from 2.5 million in the same period last year.
Nowadays, Zhiwen Group, which cannot find an outlet for user growth, while its main live broadcast business is hindered and continues to decline, but also because Tantan has become a hot potato, dragging down the revenue of the entire group, and carrying heavy baggage, anxiety is inevitable.
02 Giant ship without a captain
At the beginning of the pandemic, Momo's share price had fallen from a high of $54 to $34 (early 2020). Subsequently, when Tang Yan "dumped the pot" and left, and Wang Li took over the baton, Momo's stock price had fallen to $15 (October 2020).
But perhaps knowing his own destiny or knowing his mission, after Wang Li came to power, he did not rush to make a big move, but spent his energy on internal management and brand image transformation that must be done but did not yield much profit.
After becoming the new CEO, Wang Li described the current situation of the company in an internal letter to employees: Our human structure is not very healthy, there are not enough smart and diligent new colleagues, and there are many old employees who are lax and inactive; Our business model also has unhealthy places, and the rapid development in the past has also brought some hidden dangers in terms of revenue structure and business ecology, and our attention to user experience has also begun to wander.
In 2014, Wang Li, who was only 31 years old at the time, assumed the position of COO of Momo, and four years later was promoted to president of Momo. But from past interviews, Wang Li does not have much passion for company management. According to a later report, Wang Li once said that he has no special feelings for Momo, and the whole company is very flat, like a person calmly accepting aging, getting closer and closer day by day.
In fact, after Wang Li took over Momo, his biggest move was to change the name of the company and rename Momo to Zhiwen Group, in an attempt to dilute the "hook-up" label on Momo. At the same time, he also updated the mission vision and corporate values, changing the company's mission vision to "connecting people, connecting life", and changing the corporate values to "kindness, honesty and enterprising".
Wang Li explained the vision: "In the past decade, the company has been connecting more people with each other, and in the future, with the further development of virtual reality, the continuous maturity and popularization of VR/AR hardware to the home, and the change of human-computer interaction mode, there will inevitably be a new opportunity to open the door: a way to directly connect the lives behind people." This means that the company's business logic will also be adjusted, and we also need to actively explore and layout in the hardware field."
In May 2022, Zhiwen Group invested in INMO Yingmu Technology, a domestic AR smart glasses manufacturer.
Perhaps compared to Tang Yan, the younger Wang Li is less mature and stable, and needs more fresh stimulation. He once posted a Weibo comment on Moutai's stock price, believing that Moutai's price-to-earnings ratio is very reasonable: "Facebook 40 times, Moutai 50 times, it's normal, I don't understand what a bunch of analysts are chirping there."
Subsequently, this Weibo was published by the media under the title "Momo CEO Feels Moutai P/E Ratio is Reasonable", which caused a series of public opinion disputes. Tang Yan called him directly after he found out, can you be more mature? In the end, Wang Licai deleted the Weibo content.
Just as Wang Lidu "did not do business", after delegating power, Tang Yan did not focus on Momo's main business.
Tang Yan originally wanted the company to get on the right track and achieve wealth freedom, and then devoted himself to his favorite literary and artistic career. It is rumored that since stepping down, Tang Yan basically does not manage the company's business, only holds quarterly meetings a few times a year, and then devotes 10 hours a day to Momo Pictures, entering film and television production, and Tang Yan also frequently appears at film festivals.
In 2021, "Unexpected Summer" produced by Momo Film Co., Ltd., Tianjin Maoyan Microfilm Culture Media Co., Ltd., and Beijing Fine Blue Line Cultural Communication Co., Ltd. will be released, and the final box office of the film will be about 5 million. Although the box office is not high, it has a good reputation and was nominated for the Pingyao International Film Festival.
In addition to establishing Momo Pictures, Momo has also invested in a number of entertainment companies. For example, Kubot Culture Media, Qindao Culture, Folk Music Performance Team Women's Twelve Music Workshop, Film and Television Industry Network, etc., the purpose is to create an entertainment company linked by film and television, entertainment variety shows, and artist agents. However, from the perspective of investment, these entertainment enterprises invested in them have not produced good synergy with the company's main business.
There were once investors who commented on Snowball that Momo would make money, but would not spend money. Since the establishment of Momo, there has never been a shortage of money on the books, but Tang Yan has only spent once, that is, to acquire Tantan, but this is obviously a failed attempt. In 2021, the two founders of Tantan left, and since then, Tantan and Momo have entered a period of deep integration. However, due to Wang Li and Tang Yan's lack of interest in social networking and live broadcast business, Tantan's gain to Momo is far less than the drag it brings.
Some people say that in the past two or three years, the giant ship of the Zhiwen Group, which has been in a lost state without a captain.
03Difficult to solve "heart disease" in overseas markets
At present, the core problem in front of Momo is that user growth has fallen into a bottleneck, and the revenue of live broadcast as a pillar business has been declining, and the development of new services has become one of the most important options.
Momo, which is constantly turning its rudder in the social field, has set its sights on the online fitness track. Last October, Tech Planet reported that Momo launched two online fitness products, "BonBonJump" and "Calorie," which focus on dancing and sports social, respectively.
However, in essence, calories are still similar to Momo, Tantan, extending the underlying logic of strangers' social fields to the sports market, and even Keep has not alleviated the anxiety of user growth over the years with social + fitness, and making friends through exercise is worth putting a big doubt mark on it.
In addition to online fitness, in order to alleviate the anxiety of revenue growth, Momo (Zhiwen) also set its sights on the game field.
Since 2013, Momo has been involved in the seemingly socially less socially relevant gaming space. For a long time before the introduction of live shows, membership value-added services and games have been the main revenue of Momo. In order to solve the bottleneck of the user's ceiling, Momo has been trying to open up the link from social to gaming.
For example, in 2018, Momo launched the mobile game "Digimon: Encounter", which was backed by a huge anime IP, which should have set off ripples in the market, and shut down the server in just two years. After this Waterloo, the proportion of game business in Momo's revenue was further compressed.
The uneven quality of its own games, coupled with the lack of Tencent's ability to open up the two major links between games and social networking, has led to low users' willingness to pay, and the development of Momo's own game business has basically stagnated, and the willingness to develop in this sector has gradually declined.
Online fitness and games are unreliable, in order to find a new growth curve, the energy of Zhiwen Group over the years has actually shifted to a greater extent to the strategy of product going overseas.
Some people joked that 10 Tang Yan could not save Momo: "From the perspective of entrepreneurship, a company's ability to become a unicorn has to do with the right time and place at that time." In the current environment, Momo returns to the peak, which is no different from a second business, and it is too difficult. Let the main station of Momo develop steadily, Tang Yan will focus more on new overseas business, and there may be opportunities."
But in terms of consequentialism, Momo's road to the sea is not smooth.
In 12, 14 and 19, Momo successively launched "MO", "Blupe" and "Olaa" three overseas Mojiao software, respectively focusing on the North American, American and Southeast Asian markets, but in the end, due to cultural differences, product function iteration is too slow, resulting in unsatisfactory, lack of user stickiness and forced to break overseas.
The root cause is that Momo is blindly clinging to the old, never escaping the hormonal track based on LBS services, unwilling to step out of the comfort zone, and has failed three times at sea in eight years. Now Momo, which has learned from its previous failures, launched Soulchill, which focuses on "soul socialization", left the Middle East market, and finally found its own place under the blessing of the "interest track" that can perfectly avoid local religious taboos.
According to a ranking of Chinese non-game manufacturers' "overseas revenue" released earlier data.ai, among the 30 Chinese overseas companies in the statistics, Momo's overseas revenue ranked 13th.
However, as early as 2017, MICO merged with Kitty Live and was committed to creating an overseas version of "Momo" to leverage the global market in the form of social + live broadcast. 6 years later, MICO ran all the way and was eventually acquired by Chizicheng Technology.
In this case, it is not yet known how much space the overseas market leaves for Momo. But the market is still looking forward to what new stories Tang Yan's return will bring to Momo.
But realistically speaking, Tang Yan's challenges are really not small. The immediate question is, how to retain and attract more users? How can live streaming and value-added services, which focus on reliance, compete with short video platforms such as Kuaishou and Douyin? Perhaps time will answer these questions.
04 is written at the end
In recent years, the Momo industry has not flourished and declined, some people say that the track has collapsed, Momo will die, so pessimistic is not necessary.
The underlying logic behind the development of stranger socialization is the loneliness that people have. Based on this premise, as long as the Internet still exists, people have not got rid of the seven emotions and six desires, the basic plate of stranger sex will always exist and maintain a certain volume.
However, for most individuals, loneliness will eventually be expelled or suppressed due to practical factors, and perhaps the underlying limitation of strange social interaction is that people will eventually flee rather than enjoy it. E-commerce, games, and acquaintance social networking users may not disappear, but stranger users do.
For Mojiao products, from initially helping users to obtain freshness and fighting loneliness, to helping users entertain in the form of live broadcasts or interest communities, and then to making users eventually dependent on their functions and migration costs, it is the path of benign development. The proposition of fighting loneliness is too small, and just need or addiction is the secret of most products that will last forever.
For Momo, the only good news is that it still has more than $13 billion in cash and short-term investments on its books. At present, Momo's situation is not a desperate situation, but in the face of the underlying restrictions and ceiling in front of Momo's track, there is not much time left for trial and error and adjustment.
*The title image and the accompanying picture in the text are from the Internet.
![Stranger Social App: It hasn't evolved[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)