500亿的猜想

Guessing at 50 billion

> By Duan Yongping · his NetEase blog (nteswjq.blog.163.com, now closed; read from web archives) · 2010-02-09 · [Original link](http://nteswjq.blog.163.com/blog/static/12699812010194626715/) ([archived](https://web.archive.org/web/20110719201907/http://nteswjq.blog.163.com:80/blog/static/12699812010194626715/))

> This post includes letters from others or quoted material; Duan Yongping's own words are marked separately.

[Translator's note: a passage quoted from a blog reader's question in the comment section (unsigned) stands here in the original; it is not Duan Yongping's words and is not translated.]

My 50 billion has no scientific basis at all; I pulled it out of thin air. I just think it's very possible that some years from now Taobao's earning power will exceed eBay's today. eBay was a very good company early on, but because of the pressure of being a listed company they made some very strange mistakes and lost a lot of business to Amazon. My main worry about Taobao is whether they'll do evil if they become too dominant. Taobao is growing very well now, but it doesn't seem serious enough about cracking down on counterfeit and shoddy goods. Although "national conditions" is a decent excuse, if they can't find a long-term effective way to limit and eliminate them, Taobao may become a distribution center for counterfeit and shoddy goods. That would greatly hurt the majority of merchants doing honest business on Taobao, and would also destroy Taobao's reputation. Still, from what I know of Jack Ma, I think he's definitely not a short-sighted person and will certainly find a way to solve it (or maybe they've already found a way and are implementing it now?). Also, I don't think Taobao will list soon, because I really can't think of any reason they would. But if they listed now, the market might not give them as much as 50 billion; if I had to guess, I'd guess under 15 billion. But if Taobao lists after its business model becomes clear, the result could be completely different. Heh, too many ifs. My guess is that some years from now Alibaba Group or Tencent will be the first private listed company in China to reach 50 billion, or even 100 billion, US dollars of market value.

On GA and online games

I quite like playing games; very early on I was one of those "addicted youths" online more than 135 minutes a day. I've always felt that being poisoned by internet addiction is better than being poisoned by certain internet-addiction "experts". Actually everyone plays lots of games in life, from mahjong to all kinds of ball games to stock speculation and so on; online games are just one of them. Without games of all kinds, how would one get through the days? Because I like games, I'm fairly familiar with online game companies, and I've also made some money investing in them. Besides NetEase, which everyone knows about, I actually also have (or had) shares of Perfect World, Changyou and GA. GA is the online game stock I've made the least on so far. I think GA at its current price isn't expensive and the downside is very small. GA has more than 3 dollars of cash per share and earns over 50 cents a year. Although the old ZT Online is hard to grow now and may even shrink somewhat, in the long run, because Shi Yuzhu is very focused on games, Giant will sooner or later put out some good games. Green ZT Online is pretty good: you can play whether or not you have money, it has a bit of a Fantasy Westward Journey feel, and I've had quite a good time playing it. I don't know Giant's other games well yet. My main worry about Giant is that they'll take "Wall Street" too seriously and neglect players' real needs in pursuit of short-term profit. In fact, Shi Yuzhu has no pressure or need to pursue short-term profit; through his own gradual "reflection" he'll find a way. After all, he's run companies for many years and understands business very well. I think it's only a matter of time before GA gets back to its IPO price, but going higher than that may take some luck.

On the index

So far I haven't seriously studied the index; after all, my investing these years has done much better than the index.

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