Many years later, the Internet factory began to “find a father” again

Recently, two major mergers and acquisitions in the Internet circle have sparked a lot of heated discussions. First, Himalaya’s “selling” Tencent Music (hereinafter referred to as TME) has finally settled, with a total consideration of about US$2.841 billion, or about 20.4 billion yuan; Second, Xunlei suddenly announced that it had swallowed Tiger Pounce, and the total cash consideration of the transaction was 500 million yuan.

These two major mergers and acquisitions are embarrassing, compared with the valuation of the glorious period in the past, now it can only be regarded as a “cheap sale”. Himalaya’s last round of financing stayed in April 2021, when its post-investment valuation was equivalent to more than 4.3 billion US dollars (about 30 billion yuan), and now four years later, its valuation has shrunk by about a third. In 2019, ByteDance acquired 30% of Hupu’s shares at a price of 1.26 billion yuan, when its valuation peaked at 7.7 billion yuan.

Looking back at the wave of Internet economic development in our country in the past 20 years, Alibaba, Tencent, Baidu, ByteDance, Pinduoduo and other Internet giants were born, and under the big factories, there are also unicorn companies entrenched in other tracks or vertical fields, surviving fierce battles, “the leftovers are king”, becoming a “small giant” that cannot be ignored, or it can also be said that the Internet factory.

With the deep cultivation of its own business, the position of Internet factories in the Internet business has long been stable, and even giants may not be able to take away their market across borders, which has been confirmed by facts countless times, so although they cannot go to the next level, they are also quite nourishing.

However, Himalaya and Tiger Pounce have sold themselves one after another, which seems to expose the anxiety of factories on the Internet.

Put down your face and throw it into a big factory

2018 is a “harvest year” for the listing of our country’s Internet, and Xiaomi, Meituan, Pinduoduo, NIO, Huya, Bilibili and other “star” companies that are most concerned about the capital market and have developed the most rapidly in recent years have been successfully listed, bringing a new wave of wealth-making myths. Not only them, this year, the number of domestic unicorn companies has increased significantly, and the valuation of many companies has increased significantly, which is expected to be high.

According to the 2018 China Internet Enterprise Value List TOP 100 released by iiMedia Consulting, the ranking of Internet companies rose in the top 10, Kuaishou’s ranking grew the fastest, and the ranking of SenseTime, WeDoctor, Yiguo Fresh Network, VIPKID, Himalaya and other companies rose eye-catchingly.

We can see that at that time, Himalaya and Xiaohongshu went hand in hand, but now Xiaohongshu’s valuation has soared and it has been rumored to be listed, and Himalaya, which has never overcome the listing problem, has ended its “freedom” and sold itself to the giants.

On this list, the Himalayas are not the only ones that are going to the arms of the giants.

At the beginning of this year, Haier Group announced that it would acquire 41.91% of Autohome’s equity for US$1.8 billion (about 13 billion yuan) through its subsidiary Cataille Holdings, officially becoming its controlling shareholder. As the leading automotive vertical media platform, Autohome at its peak is the world’s most visited automotive website, ranking 26th in the list released by iiMedia Consulting, between 58.com and Lianjia.com.

Autohome occupied a leading position in the automotive vertical field long before the advent of the mobile Internet era, and in 2013, it was successfully listed in the United States, becoming one of the typical cases of overseas listing of Chinese Internet companies at that time. However, no one expected that after being used as a traffic tool by Ping An of China and constantly consuming value, it would finally give its hand to a home appliance giant.

Perhaps when Li wanted to step down and resolutely devote himself to the cause of car manufacturing, Autohome had already become an “abandoned child”.

At the same time as Haier Holdings Autohome, another merger and acquisition with more attention also came to an end, and Baidu and Huanju Times finally got what they wanted after several twists and turns in the acquisition of YY Live.

Huanju Times is the undisputed giant in the field of domestic live broadcasting, and it is also one of the few survivors in the Thousand Broadcast War, which has two head products, YY Live and Huya, respectively, in the two major sectors of entertainment live broadcast and game live broadcast. But now that YY Live Broadcast and Huya’s reunion era have been sold, they can only rely on a BIGO to “survive”. What’s even more regrettable is that although Huya successfully defected to Tencent, the merger with Douyu has been repeatedly delayed, and these two highly anticipated live broadcast giants have now disappeared after all.

This year, the “originator of Internet online diagnosis and treatment” Good Doctor Online was also sold. It is said that in August last year, there were relevant reports that Good Doctor Online was looking for an acquirer. A person familiar with the matter said, “Baidu and JD Health have been in contact, and after combining the situation of many parties and the concepts of both sides, Ant Group was finally decided.”

After some fighting, the few players who survived, except for Good Doctor, WeDoctor, Chunyu, and Lilac Doctor, the rest were drug companies. From the beginning of its establishment, Good Doctor adhered to the “three no’s principles”, that is, not selling drugs, not building offline hospitals, and not doing medical advertising.

In fact, it is not only good doctors who are trapped, Wei Doctor, Chunyu, and Lilac Doctor each have their own difficulties, and it is not unusual for them to embark on the road of “selling themselves”.

Compared with these companies, Meitu, which was once considered the “tears of the times” in the Internet factory, is in a desperate situation, and with AI to glow in the second spring, it has recently successfully won the favor of Alibaba, and its stock price has risen again.

Looking back on this year, some Internet factories that originally had a solid business foundation in their respective fields and lived relatively well, seemed to have begun to find their final destination.

The Internet began to “murder” survivors

Many Internet factories were born, grew and then gained a firm foothold in the cracks of giants. For example, Vipshop, the three major e-commerce giants firmly control the main market, but Vipshop, which started early and has a special model, can get a share of the e-commerce industry and make profits year after year; Another example is Momo, in the context of Tencent’s dominance of Internet social networking, Momo has successfully occupied the social track of strangers with the hormonal economy.

However, like other Internet medium-sized factories, their success is behind the “leftovers are king” after fierce fighting in the industry, so their business moat has been relatively stable for a long time. Like Himalaya and Momo, no matter how new applications emerge one after another, it is always difficult to shake the position of the boss.

However, in the context of the industry touching the ceiling, the survival logic of Internet factories is generally tested.

According to the CIC report, Himalaya will account for 60.5% of the listening time of mobile users in 2023, ranking first in the market. After a round of high growth, its revenue growth rate has almost stagnated. According to the prospectus data, from 2021 to 2023, the company’s revenue will be 5.856 billion, 6.061 billion and 6.163 billion respectively, and the revenue growth rate will plummet from 43.7% to 1.7%.

Behind this is the peak of user size and payment penetration.

The same goes for Momo. According to the data, in 2025, the total number of paying users of Momo App in the first quarter will be 4.2 million, compared with 7.1 million in the same period last year, a year-on-year decrease of 2.9 million; The Tantan App had 800,000 paying users in the first quarter, compared with 1.1 million in the same period last year, a year-on-year decrease of 300,000.

Even Vipshop, which has always been stable, has ushered in an inflection point. Judging from the annual results of 2024, Vipshop’s operating income was 108.421 billion yuan, down 3.93% year-on-year, and net profit attributable to shareholders of the parent company was 7.74 billion yuan, down 4.64% year-on-year, which is the first time in recent years that both revenue and net profit have declined. Before that, the previous year’s performance was extremely eye-catching, with a GMV of 208 billion yuan, a year-on-year increase of 18.7%; the number of active users was 87.4 million, a year-on-year increase of 3.9%; the number of orders was 812.3 million, a year-on-year increase of 9.8%.

In the past, when Internet giants were competing to cross borders and indulge in expansion, they were able to make money by focusing on the business of their industry. Today, the entire industry is stagnant or even the market size is shrinking, and their secret to maintaining decent performance has become two words – throttling.

From now on, the previous way of survival of Internet factories has also laid hidden dangers for the current predicament, because without frequent trial and error, many enterprises have not been able to change the situation of being too dependent on a single business.

Taking Hupu as an example, in 2017, Hupu’s prospectus revealed that its advertising revenue accounted for 61%, and value-added businesses such as e-commerce accounted for only 20%. As “Knowing Goods” was divested for independent development and later grew into a unicorn “Dewu”, Hupu once again lost the pillar of diversified monetization, and advertising dependence became more and more serious – its advertising revenue accounted for more than 90% in 2022.

Of course, Dewu has grown into a more commercially valuable unicorn, and the “fruit” of Hupu has continued to grow to a certain extent, but the vertical community has completely lost its future.

China factory “dies” in short videos?

Vipshop, Momo, Himalaya, Tiger Pu, Betta Fish… If you look at the situation of these Internet factories, it can be found that the development of many companies is hindered, to a certain extent, due to the impact of the short video era.

The most obvious is the Himalayas. In recent years, from audiobooks, radio dramas, knowledge payment to podcasts, new content forms and vertical platforms have emerged using sound as a medium, greatly enriching the content of the long audio track. But whether it’s a podcast, audiobook, or audio course, the survival of audio content is limited to a fragmented period of time that covers users. Similarly, the rise of short video has quickly seized users’ fragmented time, which has made the audio less and less user-time.

According to the “China Online Audiovisual Development Research Report (2025)”, the number of online audio users is 335 million, and the number of short video, long video, and online live broadcast users is more than 700 million, of which the use time of online audio has decreased from 58 minutes in 2020 to 25 minutes.

With its high degree of addictiveness, it erodes the attention of users in almost all other Internet fields, including social networking, online music, long videos, etc., and even changes long-formed user habits.

For example, stranger socialization, at present, interest-oriented, finding people with common interests and hobbies and common language, so as to build social relationships, is more attractive to this generation of young people than simply relying on hormones to support the connection between strangers, so the light social model is popular. With the blessing of short video algorithms, interest matching is becoming more and more accurate, making it easier to find like-minded people or find suitable circles.

This obviously poses a greater test for Momo and other stranger social products to attract new users.

Even Vipshop, an e-commerce platform, cannot escape. Short video platforms such as Douyin and Kuaishou have reconstructed their trading models through live broadcasts and short videos, and successfully opened up new ways of consumption with interest recommendation algorithms. The rapid growth of e-commerce business on short video platforms is the growth dilemma of comprehensive e-commerce and vertical e-commerce, especially vertical e-commerce, which has been hit harder.

The explosion of short video content and the prosperity of commerce have allowed the technology and development dividends of mobile Internet to cover more sinking and larger-scale individuals, which is another leap in the Internet economy. At the same time, its invasion of other fields seems to be rewriting the order and pattern of the Internet economy, and the decline of Internet factories is a manifestation. Although this is not only caused by short videos, the decline of Internet manufacturers may also be a warning of the regression of Internet content consumption.

For Internet manufacturers, if the whole people cannot awaken from the “addictive happiness” brought by short videos, they will still face more sustainable development problems.

So, we may understand why finding a new home is on the agenda.