Chapter 86: Domain Name Dilemma
Chapter 86: Domain Name Dilemma
Fang Hong was no stranger to Sequoia Capital. Established in 1972 in Silicon Valley, North America, it was a globally renowned venture capital firm with offices in North America, Greater China, and India. Known for its strategic investments, Sequoia had funded notable companies such as Gaode Software, Qihu 360, and Bona Pictures in recent years.
The fact that Sequoia Capital had reached out indicated that prominent investors had started to take notice of the rapid rise of Quantum Jump's new website.
Quandong Weibo had been performing exceptionally well. In less than two months since its launch, the platform had attracted over 700,000 users—a remarkable feat given the internet landscape of this era. By comparison, Wang Xing's campus network had taken three months to reach one million users.
After concluding a phone call, Xu Jingren returned to his seat, looking at Fang Hong with curiosity. "Why are you rejecting foreign investment? From what I know, most internet startups in China have received funding from Sequoia Capital."
Fang Hong's expression remained firm. "Once you accept foreign capital, they will dictate how you run your company. They will push for offshore registration, use VIE (Variable Interest Entity) structures, and ensure that their eventual exit is smooth. We must remain clear on our stance—Quantum Jump will not go public in the United States. My goal is to list on the A-share market and keep the profits within China. That means we cannot let foreign investors take control."
His reasoning was solid. Many Chinese internet companies chose to list in the U.S. because:
1. The A-share market operated on an approval system, meaning companies had to wait one to two years for approval—an unbearable delay for fast-growing internet startups.
2. The A-share market was weak. If foreign capital held too many shares, the market would struggle to absorb their exit later.
3. Foreign investors wouldn't even be allowed to withdraw their funds until 2015, when the Shanghai-Shenzhen-Hong Kong Stock Connect was introduced.
Moreover, companies using a VIE structure (common in overseas listings) could not list on the A-share market. While certain profitability conditions applied, these were secondary concerns.
Fang Hong's plan was to take Quantum Jump public through a backdoor listing by 2012.
Xu Jingren was surprised. "A-share listing? But the current A-share market does not allow a dual-class share structure with different voting rights. How do we handle that?"
Fang Hong smiled. "When the time comes, we can restructure. There are many ways to maintain control, such as a dual-share structure or a concerted action agreement. These methods will ensure we remain in control of the company. Don't worry."
The others nodded in agreement. Everyone trusted Fang Hong's leadership, knowing that he understood the capital market better than anyone present.
The Domain Name Dilemma
At that moment, Xu Jingren brought up another issue. "By the way, we have a problem with the domain names for our Weibo platform. We don't own t.cn or weibo.com—we've been using liangdongweibo.com instead."
The t.cn domain was a valuable short-link service, similar to Twitter's t.co in North America. Owning t.cn would allow Weibo to shorten URLs within posts, improving the platform's user experience.
Xu Jingren continued, "From our research, t.cn was purchased in 2006 for 110,000 yuan. Our team contacted the owner and made an offer, but he's asking for 850,000 yuan."
He then moved on to the weibo.com domain. "We also found the owner of weibo.com. His name is Zhang Weibo, an IT professional who registered the domain back in 1999. We haven't made a formal offer to him yet."
Fang Hong had a clear memory of this situation from his previous life. Before his rebirth, Xinlang Weibo had acquired weibo.com for 8 million yuan. However, if they had waited a bit longer, Tencent and other major competitors would have driven the price up to 20 million yuan.
Similarly, t.cn was eventually sold for 5 million yuan to Xinlang.
But now, in 2008, Quantum Jump was not yet a major player. Unlike Xinlang, which was already a leading internet giant, Quantum Jump's offer would likely be accepted at a much lower price—perhaps between 2 to 3 million yuan.
Fang Hong made his decision. "We need to secure these domain names as soon as possible. The t.cn seller is asking 850,000 yuan—accept the offer, but negotiate cautiously to avoid further price hikes. As for weibo.com, send someone to meet Zhang Weibo, but give him only one chance to quote a price. If the offer is below 3 million yuan, we'll take it. If it's higher, we'll reconsider."
Xu Jingren hesitated. "That's 3.85 million yuan for both domains. If we spend that much, we won't have enough for operations, marketing, or even salaries."
Fang Hong smiled confidently. "Don't worry about money. This month, we'll close a Pre-A financing round with Qunxing Capital for at least 50 million yuan. I'm still negotiating the final amount, but it will be no less than 50 million."
The room fell silent for a moment, then erupted with excitement.
A Pre-A round raising tens of millions was a rare achievement in the Chinese investment landscape of 2008. Many startups didn't secure this much funding until Series A or even Series B rounds.
Xu Jingren grinned. "If you can convince investors, then we have nothing to worry about."
Everyone trusted Fang Hong's judgment. If he was confident, it meant that the 50 million yuan financing was almost guaranteed.
After staying for another hour, Fang Hong left the office. The company was now on track, running smoothly as per his vision, allowing him to focus on bigger strategic moves.
Leveraging Government Endorsement
However, there was one more thing to do for Weibo.
As he left Quantum Jump's office, Fang Hong made a phone call to Hua Yu, an executive at Qunxing Capital.
"Brother Hua," Fang Hong spoke as he walked, "I need you to pull some strings. Get Xincheng's municipal government to open the first-ever official government Weibo account—'Xincheng Weibo Official.'"
This was a crucial strategy. If Xincheng's government launched an official Weibo, it would legitimize the platform and signal government endorsement, significantly boosting public trust.
If Quantum Jump approached officials directly, they might reject the request. However, Huayang Group had extensive political influence in Xincheng. With their backing, this deal could be secured far more easily.
Hua Yu responded without hesitation, "No problem. Leave it to me."
With that, Fang Hong took a deep breath. His plans for Weibo were falling into place—and soon, Quantum Jump would dominate the social media landscape.