What's wrong with me being a rich man?

Chapter 697 Where the Benefits Lie (4k)

Liu Chiping appreciated the charm of President Yu's ability to see things from different perspectives.

He suddenly became more curious about how the mountain peaks worked.

The following day, after Liu Chiping pondered the differences between the two advertising formats with Silicon Carbon Data, he visited the Silicon Carbon 7th Floor, which had already acquired a somewhat mysterious aura.

Liu Chiping is in charge of MUS and spends most of his time working overseas. This is his first time visiting the headquarters of the short sellers. What he saw was somewhat disappointing. There was no passionate discussion or gloomy atmosphere; it was just as bland and ordinary as any other building.

It might be even more deserted.

Liu Chiping's visit to the mountain peak was approved by General Manager Yu, and he was even received by a special person, Zhao Shuo, who had conducted several research trips.

He strolled around and glanced at the research reports showcasing the mountain's past achievements displayed in a not-so-inconspicuous spot. He was somewhat disappointed not to find the penguin's name.

"I thought there would be penguins. Did Over Peak short penguins back then?"

Liu Chiping asked a question.

Zhao Shuo shook his head: "President Liu, I don't know."

Liu Chiping smiled and said, "I guess so."

Zhao Shuo shook his head again. He really didn't know, but he guessed that he did.

However, he came to the mountain relatively late, unlike President Li Song and President Xu Xin who had long been in cahoots, and he hadn't heard anyone mention the past, so he could only keep the same questions to himself.

Liu Chiping chatted with the seemingly quiet young man for a few minutes, but didn't sense much difference from the short sellers. Just as he was about to leave, a thought suddenly struck him, and he asked, "Do you have any research on Facebook now?"

Zhao Shuo replied, "Yes, yes."

Liu Chiping trailed off, "Then..."

Zhao Shuo understood: "President Zhang said there's no problem. The short-selling strategy after the peak is transparent, and the positions are also disclosed. If President Liu is interested, he can also provide us with more insights."

Liu Chiping knew that the Mr. Zhang he was talking about was the boss's secretary, and said with slight surprise, "Then I didn't see you mention him earlier."

Zhao Shuo continued unhurriedly, "Since you didn't ask, Mr. Liu, I assumed you weren't interested."

Ignoring Liu Chiping's gaze, he continued, "Our current focus on Facebook is relatively routine, with a particular emphasis on how overseas policies might affect the company's advertising revenue."

Liu Chiping felt a chill run down his spine; it was indeed recorded in the mountain peak records.

However, this differs from the nature of previous short-selling attacks by Guoshanfeng. For a giant like Facebook, it's clearly not about fabrication, but rather an analysis and research into its business model or the impact of major events, much like…

Tencent didn't commit fraud, but its stock price was still impacted by Alibaba's acquisition of WeChat.

Liu Chiping easily understood the transformation of the mountain peak.

“Our main focus right now is on the latest data regulation in Europe, the GDPR, which is the EU’s replacement of the 1995 Data Protection Directive,” Zhao Shuo explained in detail. “With a 20-year time gap, the rapid development of the internet, the Snowden incident in the US a few years ago, and the advantages of the single market rule, the GDPR was just passed two months ago.”

GDPR, short for General Data Protection Regulation, was first drafted by the European Union in 2012, passed by the European Parliament in April this year, and officially came into effect on May 24.

Its main rule is to establish users' data sovereignty, and it stipulates core issues such as the right to know, the right to access, and the refusal of automated decision-making. Moreover, it has a strong extraterritorial reach, and as long as it serves users within the EU, regardless of where the company's headquarters are located, it must comply with the regulations.

Given the locations of global internet giants like Google and Facebook, the target of this regulation is quite clear.

Europe lags behind the United States in internet development, and its mobile internet development in recent years is also inferior to that of China. This unified legislation is to use the rule advantage to counter tech giants. Once a giant violates the law, it can be fined up to 4% of its global turnover or 2000 million euros, whichever is higher.

Liu Chiping was surprised: "This happened two months ago, it's really new, but I haven't seen it in the news."

Zhao Shuo nodded: "President Liu, everyone has their own expertise. The news hasn't reported on it much. The main reason is that although the regulation has already taken effect, there is still a two-year transition period, which is to give companies and institutions time to prepare for compliance. Therefore, the changes during this period are worth our attention."

Liu Chiping pondered the impact of this policy, and then thought about what President Yu had discussed yesterday.

MusVid hasn't started monetization yet, so he hasn't really paid much attention to this aspect. However, Douyin just announced its trial in this area at the Silicon Carbon Technology Day in China, starting with content advertising.

This type of advertising does indeed collect user information directly within its own app, such as what types of videos they like, which can be called first-party data. Facebook and Instagram, on the other hand, track user behavior across apps, which can be called third-party data.

Clearly, the former falls within the scope of compliance with the EU's GDPR, while the latter must be amended.

Upon thinking of this, Liu Chiping asked, "What has Facebook's reaction been? What direction are you considering now?"

“Facebook and Google haven’t taken any action, at least we haven’t collected any information,” Zhao Shuo said. “Mr. Liu, we are actually paying attention to the future changes of Apple and Google regarding the authorization of user behavior information collection. Globally, there are basically two major systems, Apple and Android. The authorization of information collection is at the system level, so they are key targets.”

Looking at the situation as a whole, Liu Chiping's expression subtly changed. Snapchat is about to be besieged by Facebook. Although Facebook will also be affected, it has multiple apps with a wide user base, while Snapchat's revenue may be relatively singular for some time.

If Facebook's crackdown is effective, and if there are policy changes affecting revenue, Snapchat could potentially suffer a structural impact.

He was shocked. Could it be that the cause of a defeat had already been revealed to the world in advance?
Liu Chiping understood the direction Guo Shanfeng was considering and felt that this chain of logic made a lot of sense. The EU had already made clear legislation, which would inevitably bring direct impact, but the market had not yet noticed it.

After all, even they themselves hadn't noticed the difference between first-party and third-party data.

Now it depends on what Apple and Android do.

Liu Chiping felt that he should pay more attention to this aspect in the future, and also consider Mus's advertising placements and potential competition.

When he met Mr. Yu at dinner that evening, he couldn't help but mention what he had heard at Guoshanfeng during the day, and they also talked about the possible moves of Apple and Google.

While eating, Yu Xing said, "It's not too hard to guess. I reckon Apple will make the first move, and it will be a big one."

Liu Chiping seeks a solution.

"Don't make it too complicated, keep it simple. Mr. Liu, which do you think relies more on advertising, Apple or Google?" Yu Xing asked with a smile. Liu Chiping instantly understood: where the profits lie, so do the obstacles.

Apple's core revenue comes from hardware sales, followed by App Store commissions, software subscription services such as iCloud, and perhaps advertising revenue last. Google is different. Google leverages the influence of the Android system to naturally possess a search entry point and generate profits, with advertising being its core revenue source.

Faced with policy and compliance requirements, Apple can make decisions quickly without much hesitation, while Google, entangled in interests, is likely to be much slower in both speed and scope.

Liu Chiping himself has been in charge of major companies and is well aware of internal interests. Combined with his own experience, he can be almost 100% certain that Apple will be the first to make changes at the system level. Once such changes occur, advertising types that use third-party data will inevitably be impacted.

Because Apple's position in the global smartphone market is undeniable.

After sorting things out, he suddenly slapped his thigh and exclaimed, "Mr. Yu, if that's the case, not to mention Snap, Google and Facebook will also be greatly affected. I'm even thinking of joining you in shorting the market!"

Yu Xing couldn't help but chuckle: "Go for it! I've told you about all the negative factors. Just follow this strategy and short sell. You'll be the next king of short sellers."

Liu Chiping reluctantly withdrew his hand: "President Yu, short selling was a joke, but your research is indeed insightful. You've really figured out the most likely scenario from EU policy."

Yu Xing laughed and said, "It's hard to say. I just feel there's a tendency, just like your judgment that Apple will move. This is from our company's current perspective. Apple's own advertising revenue accounts for a small percentage, only about 5%. Google is different; its advertising revenue accounts for 9%. The competition between them is also quite fierce."

"Apple emphasizes the protection of privacy information, which is consistent with its brand image and can also hurt competitors' advertising business. If competitors' advertising business is not accurate enough, Apple's higher-quality advertising can also grow as a result."

"However, Facebook, Google, and Snap all have very high market capitalization and user base. How to proceed in the secondary market is something we need to continue to gather information on before we can make a decision."

"For now, we can only say that it's worth paying attention to."

Liu Chiping's attention returned to Mus: "President Yu, the advertising models of Mus and Douyin are almost unaffected by the new policy. As long as we can further increase Mus's user base, then with the combined efforts of inside and outside, that will be the biggest negative factor."

Seeing Liu Chiping's somewhat excited expression, Yu Xing joked, "President Liu, you really could go work on the seventh floor."

Liu Chiping took a deep breath: "I just thought... this is indeed a good opportunity to expand our market share in overseas advertising, and it seems like a good opportunity to take action after overcoming the obstacles."

Yu Xing nodded, no longer discussing his observations and thoughts on the matter, and simply offered his support: "Start by burning money."

Liu Chiping's eyes instantly turned serious. After looking at President Yu for a few seconds, he said, "President Yu..."

Yu Xing indicated that he was listening.

Liu Chiping said solemnly, "I also have some spare money that I can invest in Guoshanfeng's fund."

Yu Xing: "..."

He suddenly remembered what Liu Chiping looked like when he was the president of Tencent, and laughed, "Then if you have enough money and aren't afraid of the risks, talk to Li Song."

Liu Chiping believes that from privacy policies and Apple's interests to Guo Shanfeng's demonstrated information gathering capabilities, combined with Mr. Yu's ability to draw inferences from similar cases, these are enough to convince him to invest money in the fund.

If even crossing the mountain peak is impossible, then... well, you have to accept the loss.

At that moment, Liu Chiping inexplicably thought of his time at Tencent, and it seemed that things were indeed more interesting after he came to Lingang.

That evening, Yu Xing took his discussion with President Liu home and talked about it with Liu Wanying, the big short seller, mentioning Liu Chiping's approval.

"Yes, there is hope." Liu Wanying gave a simple response, then continued to curl up on the sofa and browse her tablet.

Yu Xing said with a smile, "You didn't see the look in President Liu's eyes. I feel that if you persuade him more, he might really come to the mountain peak."

"Even if others aren't on the mountain peaks, your heart can be," Liu Wanying said without looking up. "This is the 'three-in-one' principle of Lingang: gather everything that's useful."

As she spoke, she suddenly tossed the tablet lightly: "Big short seller, take a look at this summary."

Yu Xing felt that Xiao Ying was acting strangely today. Usually, she would have been very enthusiastic and talked to him about the changes and implications of privacy policies.

He took the tablet and glanced at it; it was an open email.

Yu Xing glanced at it for a while, his expression somewhat strange: "If you cover up the content at the back, I would think this is an accusation against us."

The email discussed a data analytics company that used massive amounts of data to serve Brexit supporters, including pushing targeted political ads in swing constituencies.

Yu Xing recalled the Mus index he had drafted.

Liu Wanying frowned: "That was my first reaction. The fund uses MUS data for analysis and judgment, so we need to be careful about this issue."

Yu Xing's mind raced with thoughts, this...

Guoshanfeng Fund naturally did not disclose the reasons for its previous bets, including the name of the index, which was only known within a small inner circle. It was mentioned when it went to Shanghai for a meeting, but the level of secrecy within that circle should be even higher.

Liu Wanying continued, "Yes, we need to destroy the evidence."

Yu Xing looked at the email again. The company listed was "Cambridge Analytica." He was both amused and exasperated, but he couldn't help but nod in agreement.

This wasn't the first time Guo Shanfeng had received similar messages; previously, Guo Kongcheng had even personally delivered evidence to their door. However, recently they have increasingly encountered political factors, including Mozi's visit and the current situation in Malaysia.

Yu Xing carefully reviewed the email, which pointed to Facebook as the source of the data. If this incident was true and had been exposed, it would undoubtedly be a scandal.

As for whether it's true or not, it's not surprising that even they can fabricate a seemingly plausible Mus index in a short time, and other organizations can use big data to build models and then exert influence based on them.

Seeing Yu Xing deep in thought, and waiting for a while without any response, Liu Wanying asked, "What are you thinking about?"

Yu Xing shook his head and did not answer the question. He was just thinking about another user who was also using the MUS platform for promotion: Tang Feit, Western Sun, King of K-lines, and Godfather of Political Economy.

(End of this chapter)