APTnovel Chapter 488 Successful Negotiation
Chapter 488 Successful Negotiation
Lunch was arranged in a small restaurant on the second floor of the main building of the park. It wasn't one of those formal private rooms outside, but a small room partitioned off next to the staff canteen. There was a round table that could seat seven or eight people, with a plain-colored tablecloth on it.
Zhang Yifan didn't bring anyone else, just himself, along with Lu Ran, Zhou Mingzhe, and Chen Mo. The four of them sat comfortably and happily.
The dishes are local Hangzhou cuisine: West Lake Vinegar Fish, Longjing Shrimp, Beggar's Chicken, Dongpo Pork, and a bowl of water shield soup.
As Zhang Yifan served food to the group, he said, "Our chef used to work at Lou Wai Lou restaurant; I poached him. His West Lake Fish in Vinegar Sauce is more authentic than any other restaurant. You should try it."
Lu Ran picked up a piece of fish with his chopsticks. It was indeed tender. The sourness of the vinegar and the sweetness of the sugar were perfectly balanced. The fish meat spread in his mouth with a faint aroma of wine.
Lu Ran remembered that he had tried West Lake Vinegar Fish before, and he felt that the taste was a complete waste of the ingredients.
But the West Lake Vinegar Fish here is actually quite delicious.
He chewed and swallowed, praising it as "really delicious," then picked up his water glass, took a sip, and waited for Zhang Yifan to continue.
Zhang Yifan wasn't in a hurry. He put a piece of Dongpo pork on Zhou Mingzhe's and Chen Mo's plates, then ladled himself a bowl of soup. After drinking half of the soup, he put the bowl down and spoke again: "President Lu, the number you gave in the tea room just now sounded a bit conservative to me."
Lu Ran put down his chopsticks, looked at Zhang Yifan, and waited for him to continue.
Zhang Yifan wiped his mouth with a tissue, his movements unhurried: "I have a general understanding of TUTU's current size. Three main products are running simultaneously, and we've already expanded into multiple overseas markets. I've seen the data in Europe; the growth curve is impressive. Add to that the AI engine you're currently promoting—although there's not much publicly available information, judging from your interactions with JD.com and Ele.me, that system is already quite mature. All of this combined makes TUTU no longer a small company. The percentage you mentioned might have been appropriate a month ago, but now it's too low."
Lu Ran's mind raced upon hearing this. Zhang Yifan's use of "too low" had two meanings—first, he felt TUTU's size warranted a higher valuation; second, he felt Kuaishou's size wasn't worth TUTU exchanging for such a small percentage. These two meanings combined, translated into negotiation language, meant "your offer isn't sincere enough."
But instead of immediately increasing the stake, he first asked, "Mr. Zhang, what do you think would be a suitable amount?"
Zhang Yifan leaned back in his chair, picked up his teacup, took a sip, and said a number.
After hearing this, Lu Ran did not respond immediately. He lowered his head, picked up a piece of Longjing shrimp, put it in his mouth, and slowly chewed it. He used this action to go through the number in his mind.
The number quoted by the other party was much higher than he expected, but not outrageous.
The other party was testing his limits, which also indicated that Kuaishou and Douyin were indeed interested in this collaboration.
Zhou Mingzhe remained silent the entire time.
Chen Mo spoke up, his tone calm and measured: "Mr. Zhang, we certainly acknowledge the size of Kuaishou and Douyin. But when it comes to equity swaps, it's not about who has the bigger size getting more. We need to consider the incremental value each side can bring to the other. TUTU brings Kuaishou and Douyin improved AI technology efficiency and a supplementary gaming content ecosystem—both new growth areas for Kuaishou. Kuaishou and Douyin bring TUTU user access and traffic support. The value contributed by both sides is actually equal."
Zhang Yifan didn't refute what he heard, but he also didn't back down. He twirled his teacup halfway around and then said, "Mr. Chen is right. But I want to add one point—Kuaishou and Douyin already have complete recommendation algorithms and content ecosystems. The integration of AI technology is icing on the cake, not a lifeline. TUTU, on the other hand, currently lacks a stable user entry point that isn't controlled by Tencent. From the perspective of urgency, TUTU needs this cooperation more than Kuaishou and Douyin. Therefore, a larger share is reasonable."
These words subtly altered the atmosphere at the table.
Zhang Yifan flipped over a card from under the negotiating table—he knew why TUTU had approached Kuaishou, and he also knew the pressure TUTU was currently facing.
He used this as leverage to pressure the ratio; it was an open conspiracy.
Lu Ran put down his chopsticks, leaned back, and looked at Zhang Yifan: "Mr. Zhang, you're right. TUTU does need an entry point that isn't controlled by Tencent; that's a fact I don't deny. But you also said something earlier—Kuaishou and Douyin's recommendation algorithms have already reached a very high level, and improving them by even one percentage point requires a huge cost. If the AI engine can reduce that cost by half, or even more, then this incremental benefit for Kuaishou and Douyin won't just be icing on the cake. It means you can achieve a higher ceiling with the same R&D budget. This benefit is far greater than the scarcity of an entry point."
After he finished speaking, Zhang Yifan's expression didn't change much, but Lu Ran noticed that his hand holding the teacup paused for a moment. The pause was very short, but it was enough to prove that his words had indeed hit a nerve.
Zhang Yifan put the teacup back on the table, remained silent for a moment, and then said, "Let's compromise. I won't go by the number I gave, and you won't go by yours. Let's take a middle ground that everyone can accept."
Lu Ran thought for a moment and then gave a number that was a few percentage points higher than his initial quote.
After listening, Zhang Yifan didn't immediately agree. He picked up his phone, glanced at it, then put it down again, and said, "I'll go through the internal process again. You should also discuss it with your team. If both sides find this amount acceptable, we'll give you a formal response by next Wednesday."
Lu Ran said yes.
The conversation then shifted from formal negotiations to other topics.
Zhang Yifan inquired about the specific situation in the European market, and Lu Ran briefly explained the regional agency structure of the three companies and its current progress.
Zhang Yifan then asked if Minecraft had encountered any content compliance issues overseas. Lu Ran said that in Europe, the PEGI rating is the main process, which is simpler than in China. However, if they were to enter the Middle Eastern market, the workload of cultural adaptation would be greater.
As they chatted, the atmosphere at the dinner table relaxed.
Zhou Mingzhe finally spoke up, asking Zhang Yifan how the recommendation algorithm team within Kuaishou maintained long-term efficiency.
Zhang Yifan said that they change their research direction every six months to prevent people from getting stuck on the same problem for too long. If they get stuck, they change people and perspectives.
After listening, Zhou Mingzhe nodded and said that this idea was somewhat similar to the job rotation system in TUTU's technical department.
Chen Mo added from the side, "We rotate every three months. Too short and we don't get any work done; too long and we get stuck on minor details. Three months is just right."
Zhang Yifan glanced at Chen Mo: "Your team rotates every three months. Won't that cause problems with the code handover of core projects?"
"So there's a lot of documentation. We have someone in our tech department specifically responsible for reviewing the documentation quality. Whether code can be merged depends first on whether the comments are clear. If the comments aren't up to par, no matter how good the code is, it'll be sent back for rewriting."
Zhang Yifan smiled and didn't ask any further questions.
But the way he looked at Chen Mo was noticeably more serious than before.
It was almost 2 p.m. when lunch ended.
Zhang Yifan escorted the three people to the park entrance, shook hands with them, and said, "I'll give you an answer by next Wednesday. I'll contact you regardless of the outcome."
Lu Ran nodded in agreement. After shaking hands, Lu Ran and the others got into the car and headed to the high-speed rail station.
After driving for a while, Zhou Mingzhe, sitting in the back seat, spoke first: "It's not easy to negotiate here. Zhang Yifan seems easygoing, but he's carefully calculating every move. The number he quoted today was clearly prepared."
Chen Mo, sitting in the passenger seat, added, "It's indeed difficult to negotiate. But the 'compromise' he proposed shows that he's already done the math internally. If he had absolutely no intention of cooperating, he wouldn't have proactively suggested a middle ground. He's now waiting for our formal response, while also considering the opinions of his other senior executives."
Lu Ran leaned back in his seat, listening to the two people's analysis, but his mind was on something else entirely.
Zhang Yifan's statement in the tea room today—"Kuaishou and Douyin's size is what it is; reporting a low percentage would be insincere"—is not wrong in itself, but it implies a more crucial piece of information: Kuaishou and Douyin internally value TUTU higher than TUTU itself anticipated.
If Kuaishou's internal valuation model takes into account TUTU's technological assets and overseas growth potential, then the percentage quoted by the other party is actually reasonable.
Thinking about this, Lu Ran's mental scales tipped slightly toward "acceptance".
He took out his phone and wrote down the key points of the conversation in his notes app.
The equity ratio proposed by the other party, the strength of their willingness to cooperate, their assessment of TUTU's valuation level, and their proposed compromise.
I wrote several keywords for each entry and then saved the document.
It was almost dark when we got back to Shanghai.
Lu Ran parted ways with Zhou Mingzhe and Chen Mo at the high-speed rail station. On her way home in a taxi, she sent Zhang Yifan a message: "We had a great chat today. I'll be waiting for your reply before next Wednesday."
Zhang Yifan replied with just two words: "Received."
Lu Ran stared at those two words for a while, then put his phone away. He could sense that Zhang Yifan's response was much more concise than when they set off; the more concise it was, the more seriously the other person was considering it.
Lu Ran didn't have a moment's rest in the following days.
He had Zhao Yiming run a new round of tests on the AI engine's optimization module for the recommendation system, and he also had Chen Mo compile a joint traffic ecosystem plan based on publicly available data from Kuaishou and Douyin.
After organizing all the usable materials, he asked Zhou Mingzhe to conduct a new risk assessment of the share swap, confirming that even if the operation was carried out according to the figure reported by Zhang Yifan, there would be no hidden dangers to the company's control.
On Wednesday morning, Zhang Yifan's reply arrived on time.
It wasn't a phone call, but an email. The content was short, but the wording was formal.
The core message can be summarized in one sentence: After internal evaluation, Kuaishou and Douyin believe that the basis for cooperation between the two parties is valid, and recommend proceeding according to the intermediate value agreed upon by both parties during the negotiations.
After reading the email, Lu Ran leaned back in his office chair for a while, then picked up his phone and sent a message to Zhou Mingzhe and Chen Mo respectively: "It's done. Proceed with the midpoint agreed upon last time."
Zhou Mingzhe replied with a single "Okay" instantly.
Chen Mo's message came a few seconds later: "Then we can talk to Tencent now. With the deal with Kuaishou and Douyin finalized, their last advantage on the distribution channel side will be broken."
...