Zhongguancun Online, an established vertical IT portal, is facing a new round of changes. After being stripped out of the system by the parent company CBSi China, there are rumors recently that JD.COM will take a stake in Zhongguancun Online, a vertical IT portal, accounting for about 35% to 42%.
It is even more reported that the introduction of JD.COM was personally operated by Liu Xiaodong, Senior Vice President of CBSi China, and Wang Lu, President of CBSi China District, was responsible for handling the separation of Zhongguancun Online from CBSi.
Tencent Technology learned from a number of authoritative sources of CBSi in China that Zhongguancun Online is indeed preparing for capital operation, but the object of Zhongguancun Online’s scandal is not JD.COM, but another family.
A person familiar with the matter said, "JD.COM once negotiated cooperation with Zhongguancun Online, but the two sides finally failed to reach an agreement."
The "doomsday" dilemma of IT vertical websites
Zhongguancun Online is stripped from CBSi and seeks external financing, which presents its current predicament. The experience of Zhongguancun Online is just a microcosm of the survival dilemma of CBSi’s original science and technology sector in China, and even the entire science and technology vertical industry.
CBS Interactive, abbreviated as CBSI, is an interactive media company under the CBS Group. In the past many years, CBSi has been developing in the form of media in China, and it has taken the form of capital acquisition to attack the city and plunder the land.
CBSi China Science and Technology Group includes Zhongguancun Online, PChome Computer House, ZDNet Zhiding Network, Hummingbird Network, Wanwei Home Appliances Network, BNET Business Talent Network, Xiyu IT Network, Sanqin IT Network and 85 sub-stations in China.
However, CBSi China made major adjustments to its business this year, and drastically divested its original technology business. Some businesses were sold, such as Zhongguancun Online, to institutions, but not to companies such as BAT and JD.COM, which are well-known in the industry.
The other part also carries out capital operation, for example, PCHOME is led by the management team. CBSi China originally had three vertical fields: automobile, science and technology and women. After this adjustment, CBSi China has withdrawn from the field of science and technology, focusing on automobile and women.
Behind CBSi China’s withdrawal from the field of science and technology lies the deep dilemma that the vertical websites of science and technology are facing at present. Electronic product manufacturers’ advertising expenditure on IT vertical websites continues to decline, and the days of many websites are not as good as before.
Relevant data show that in October 2014, the advertising expenditure on IT vertical websites of laptops and consumer appliances increased by 4% and 15% respectively, while the expenditure of mobile phone manufacturers decreased by 49% year-on-year, which was the fourth consecutive month.
Wang Lu, president of CBSi China, once said that the growth rate of IT vendors, the increase of advertising expenses and the proportion of advertising expenses invested by IT vendors in vertical sales tend to be stable, which will be even more cruel to websites like Zhongguancun Online.
This trend has already appeared. In 2011, the IT World Network was shut down. In 2012, the announcement of the closure of Zhongguancun shows the dilemma of vertical IT websites. With the advent of the mobile Internet era, the fragmentation of users’ reading and behavior has further aggravated this trend.
From purely providing information to doing e-commerce
The impact of the mobile Internet is changing users’ traditional reading habits, and it is also increasingly forcing the traditional vertical information websites to change.
The most obvious example is that Easy Car has received a total investment of about 1.3 billion US dollars from JD.COM and Tencent in the form of cash and exclusive resources; Easy Car’s subsidiary, which focuses on the Internet platform of auto finance, has received a total cash investment of US$ 250 million from JD.COM and Tencent.
In this regulation, the resources involved include JD.COM’s exclusive opening of new and used car channels of various e-commerce platforms including mobile applications for Easy Car, and other support for providing core e-commerce platforms. JD.COM provides exclusive resources of about $750 million.
Behind the transaction between JD.COM and Easy Car is the layout of car e-commerce, and both parties are prepared to turn the original pure automobile information into real automobile commodity trading behavior, and gain greater benefits from it. Car home, the rival of Easy Car, has also benefited a lot from the transformation of auto e-commerce.
Extending to the vertical IT industry, vertical IT websites forced by livelihood will also have to transform from simply providing information to trading.
Informed sources revealed to Tencent Technology that the most obvious change of Zhongguancun Online in the future will be from providing information to community interaction to future digital product trading, and e-commerce will be an important direction of Zhongguancun Online in the future.
In the future, Zhongguancun Online will develop in the direction of SNS and circle operation in the vertical IT field, and access to shopping guides. In addition, it will be relaxed at the product level, and it may be involved in more technical fields such as intelligent hardware and 3D printing.
"This is that all media advertising companies need to transform. Without transformation, the vertical IT website road will become narrower and narrower." A person familiar with the matter told Tencent Technology that Zhongguancun Online will recruit a lot of manpower after financing, which may require e-commerce operation experience.
After Chen Tong, the former editor-in-chief of Sina, joined Xiaomi, he once told Tencent Technology that hard news is becoming more and more difficult in the new media format situation, especially under the impact of social networks, which is something that all media should reflect on.
"In the early days, media positioning was mainly based on information, but now, simple information is far from enough. Besides daily news, you have to do other things, such as spreading technical information, do you have to spread knowledge and record your life?"
Chen Tong said, for some media, it is necessary to emphasize the practical function, which can help individuals. "I think this practical function may have been mentioned in the past, but it may become more and more feasible due to the arrival of the era of more precise mobile."
As for the original China management of CBSi China, Liu Xiaodong, senior vice president of CBSi China, has led a part of the team to continue to manage Zhongguancun online operation, while Wang Lu, the president of CBSi District, has left his post, and he may go to a big technology enterprise.
CBSi China issued an internal mail on January 13th, announcing the official resignation of Wang Lu, president of CBSi District. CBSi also mentioned that China market is very important and will continue to invest in China market.
However, from a series of signs, CBSi China’s interest in the vertical IT field is getting weaker and weaker, and IT is unlikely to get involved in the short term. Liu Xiaodong may be the only original management team of CBSi China to continue to struggle in the vertical IT field, and the road ahead is still difficult.
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