The aftershocks were still being felt.

Microsoft.

Within just two days of the news breaking, Yanwenzi Group's stock price rapidly shrank by 11%, causing the company's valuation to drop by more than a billion dollars. As the largest shareholder, Tao Liangchen’s personal wealth evaporated by approximately eight hundred million dollars.

This clearly showed that the behemoth that was Microsoft held a far higher position in people's minds than Yanwenzi Group.

The two companies' total market capitalization differed by more than thirty times, putting them in completely different weight classes. No wonder Yanwenzi Group, despite clearly holding advantages in market and technology, was still not favored by many investors.

On the contrary, a group of institutions, including Merrill Lynch and Nomura Securities, secretly made moves to buy large quantities of shares at low prices. These shares, which they increased their holdings in, accounted for about 3.6% of Yanwenzi Group's total share capital; otherwise, the decline would certainly have been even greater.

In March of last year, Cisco's stock price briefly broke through $550 billion, successfully suppressing Microsoft and ascending to the top spot in Nasdaq's total market capitalization.

At that time, some people laughed at Tao Liangchen for being foolish, having sold off Cisco and Qualcomm, two major rising stocks, so early.

Only a little over a year had passed, and Cisco's stock price had already fallen to around $130 billion and was still steadily declining.

Meanwhile, Microsoft still firmly occupied the top spot in Nasdaq's market capitalization, maintaining a total value of around $320 billion, with a large amount of liquid capital in hand.

The vast majority of computer manufacturers worldwide had to pay Microsoft a fee for purchasing the Windows desktop operating system for each computer they produced. Some customers seemingly didn't spend money, but in reality, the price was already included in the computer's sales price. Huang Zuan Computers was no exception, having spent a lot of money to secure a preferential price after a lot of effort.

Tao Liangchen's personal wealth was very high, already ranking him as the sixth richest person in the world.

However, in terms of recognition, influence, and the sheer amount of wealth controlled, he was still far from being able to compare with the wealthy and powerful Microsoft. After all, the accumulation time was still too short.

Just the mere expression of ambition in instant messaging and social networking from MSN, a Microsoft subsidiary, caused Yanwenzi Group to fall into trouble.

Fortunately, Microsoft, mired in antitrust lawsuits, was essentially competing with Yanwenzi Group with shackles on its hands and feet. It could only rely on the desktop operating system platform used by hundreds of millions of people to drive traffic, as well as its massive liquid capital, and was unable to completely restrict Yanwenzi Group... The advantage was still on Tao Liangchen’s side.

The truth was indeed so.

So many instant messaging companies had sprung up in Silicon Valley, yet none could compete with Yanwenzi Group. The key was that iCQ and TVT were not just for chatting, but also built two different social platforms. This was Yanwenzi Group's core advantage, allowing users to build social circles online.

With the great weapon of social networking, Yanwenzi Group was basically invincible. There was still no product on the market that could replace "Moments" and "Personal Space."

Tao Liangchen was trying to turn crisis into opportunity, seizing the time to expand Yanwenzi Group's business scale. Actions that would easily arouse vigilance in normal times had recently become a reasonable and legitimate form of self-help.

Microsoft was a platform serving third-party companies. Once it tried to extend its reach into other fields, touching the interests of other internet companies, it would easily arouse resistance from the entire industry, making it difficult to move forward, as if stuck in a quagmire.

The same logic applied.

Since Yanwenzi Group also centered on third-party service businesses, providing advertising and traffic services to third-party companies, if it started to expand for no reason, extending its reach into other internet industries, it would inevitably lose a large number of advertising customers, and might even be dragged down by malicious lawsuits, supporting other competitors, and other means.

Silicon Valley could not accommodate an internet giant spanning numerous industries.

This was also the fundamental reason why Tao Liangchen had ignored many opportunities in the past two years, daring only to invest through KOKO Venture Capital.

Large-scale online network games, payment tools, and online movie rentals were three industries that had just emerged in recent years, or rather, niche emerging fields that no one paid much attention to. After repeated deliberation, he dared to invest in them through Yanwenzi Group.

After all, entering and grabbing someone else's business was completely different from personally incubating and opening up a new market.

Like Blizzard Entertainment's *Warcraft*, *StarCraft*, and *Diablo*, as well as Valve Corporation's current flagship products *Half-Life* and *Counter-Strike*, these actually belonged to the category of single-player games...

Faced with Tao Liangchen's offer of $80 million, plus the assumption of the company's debt, Kevin Hastings, the founder of Netflix, considered it until the next morning and readily agreed. He was as happy as if he had met a life-saving benefactor.

There was no other way, he was really forced to.

As early as two or three months ago, Kevin Hastings had gone to his competitors, hoping that they could acquire Netflix's business. Unfortunately, they didn't agree. The company couldn't get new financing, and had only a little over $700,000 left in its account, not enough to pay the express delivery fees for its cooperation with the Federal Postal Service. It was heavily in debt.

Not only had it run out of supplies, but it might also face group lawsuits from customers. He really didn't expect Tao Liangchen to descend from the sky and offer such a surprising acquisition price. It was simply a turning point, a new lease on life, to the extent that Kevin Hastings and his partners didn't even bother to bargain anymore.

The specific acquisition was handled by John Zhou. When he had dinner with Tao Liangchen, he said:

"I had Netflix's CEO calculate it, and their debts are about eight million dollars. Can a company that burns money to expand like this really bring us profits? Customers only need to spend twenty dollars a month to choose six movies, watch them, and then send them back to the company, and they can continue to choose six movies. Not to mention the cost of the discs, the warehousing costs, labor costs, and round-trip delivery fees are all borne by Netflix. They burned more than fifty million dollars last year, clearly just trying to raise money."

By frantically burning money to increase customer scale, turnover, and growth rate, this set was very easy to raise money with before the stock market crash in March of last year.

No one would care whether the company was losing money. They could create a set of growth and profit forecast reports for how much money they would make in the future, and they could attract countless investors waving checks.

Only a short year had passed, and this set was no longer feasible.

Netflix would incur more losses with each additional customer, scaring away many potential investors. With Yanwenzi Group's traffic scale, no wonder John Zhou was starting to worry.

Tao Liangchen didn't take it seriously, and said with a smile:

"It's like getting a gym membership. There are indeed people who go every day, but most people just feel like they need it. Whether they can use it even once a month is still unknown. Netflix's traffic cost is very high, accounting for most of last year's losses. However, the business itself is in good shape, which is just right for Yanwenzi Group's situation. It can inexpensively monetize traffic through Netflix."

Monetizing traffic was only secondary; he didn't tell John Zhou the more critical reason.

With Netflix's situation, as long as it accumulated enough users, it could easily jump into the online viewing industry when internet speeds became faster in the future.

And then, through a paid subscription model, it could rapidly grow into a large-scale internet company. This alone made Tao Liangchen feel it was worth taking a shot at acquiring it...