[Chapter 461: Establishing an Online Hype Team, IMDb]
The year was 1996. With Netscape Navigator and Yahoo's portal quietly growing, the internet had truly started to enter millions of American homes. It was beginning to change people's daily lives -- through email, forums, and new ways to access information.
According to the latest data, there were already 30 million internet users in the United States, and this number was increasing by 2 million every month.
After a year and a half of development, Yahoo had successfully carved out a unique position in the internet world with its portal site. The services it offered included a search engine, email, forums, news, and information. Naturally, such growth wasn't possible without capital support.
Yahoo had successfully completed both its Series A and B funding rounds. In the final round of funding, the post-investment valuation reached $150 million. Mangrove Capital had acquired 20% equity during the angel round. In the subsequent Series A and B rounds, Jerry Yang and David Filo obviously wouldn't let Mangrove Capital continue to lead. However, as a major shareholder, Mangrove Capital maintained its stake by co-investing in the later rounds, putting in $600,000 and $2.4 million respectively, keeping their equity steady at 20%.
With ample capital, Yahoo exploded onto the fast track of growth. By the end of last year, the company had begun expanding internationally, launching versions in Japanese, Korean, French, German, Italian, and Spanish.
According to Winnie, Yahoo's founders were already preparing for an IPO.
...
As the internet user base swelled, forums started to mushroom everywhere, becoming lively hubs. Many users discussed movies extensively -- sharing recommendations or venting criticisms.
In October of the previous year, a website called IMDb (Internet Movie Database) officially launched. It functioned as an online database covering movies, actors, television shows, TV stars, and film production details.
IMDb had been created on October 17, 1990, and contained extensive information such as movie details, cast lists, runtimes, synopses, ratings, and reviews. By now, it had almost 20,000 films and shows catalogued.
Keeping up with the rapid internet development, IMDb transitioned online, offering users free access to its vast database. From then on, people no longer had to call or write to designated staff to obtain or consult information. The site even launched message boards where registered users could share and discuss news about movies, actors, and directors.
It seemed the era of internet film promotion had truly arrived.
...
Linton, having emerged from the future internet boom, deeply understood the importance of online promotion. More importantly, he knew just how impactful organized online hype teams and smear campaigns could be for a film's success or failure.
Before others had a chance to react, he knew the best approach was to quietly claim this lucrative market and make a fortune.
With this in mind, he called his assistant to bring Bella to the 16th floor.
"Boss, you called for me?" Bella arrived promptly after receiving the notice.
"Bella, do you often browse internet forums?"
"Boss, I frequent Yahoo forums quite a bit."
"What about others?"
"Other forums, I visit occasionally."
"Are you familiar with the IMDb website?"
"Yes, IMDb is my favorite movie information database. I used to call them for info frequently. Three months ago, they launched their online query system."
"When you browse forums, do you talk about movies?"
"Sometimes. After watching a movie, I often can't help but post my thoughts online. For good movies, I'm quick to praise and share. For bad ones, I can't help but criticize."
"That's what I like to hear. Have you ever considered how we might promote movies on these forums?"
"Yes, we could organize people to post positive comments about our films, drawing more viewers to theaters."
"Good. I'm planning to establish an online publicity department. Got any ideas?"
"Wait, boss, you want me to run this new department?"
"Yes. You'll be in charge. How confident are you?"
"I'd be honored, but... I don't really know how to do it."
"Internet movie promotion is new territory. Everyone's still figuring it out, but it's not complicated at this stage. It's mainly about organizing a team to register multiple accounts. When one of our movies is released, you'll post extensively across various forums. Not just initial posts -- other accounts should follow up with comments to build momentum and attract attention."
"Thanks, boss. I accept the challenge."
"Great. Start preparing and think carefully about how you'll proceed. I'll set up the department immediately, with you as manager. The team should have five members, and you can select them yourself. If no one suitable is found internally, feel free to recruit externally.
Also, don't limit yourself to just your department's team. You can bring in active forum users as collaborators. For example, pay a certain amount for posting a thread, more for a popular post, and some for comments. Using incentives, you can build a large network of supporters among internet users. This will vastly improve our promotional effectiveness."
Soon, Linton Film Company established its Online Publicity Department, with Bella appointed as manager.
...
At the same time, recognizing IMDb's growing influence, Linton asked Winnie to have Mangrove Capital proactively approach the site for investment.
Interestingly, IMDb's original shareholders insisted on keeping the service free for users. They had never found a viable business model and had operated at a loss since inception.
At that time, IMDb was registered as a nonprofit. Its funding came from shareholders' contributions and donations from enthusiasts.
Although moving IMDb online greatly enhanced user convenience, operational and maintenance costs also rose sharply.
Volunteers uploaded much of the content and maintained the site during their free time, but expenses for software, hardware, and bandwidth were substantial.
As the shareholders scrambled to raise funds, Mangrove Capital made its investment offer.
it should have been a win-win deal, but the shareholders feared venture capital involvement would compromise IMDb's original mission of free access to movie and TV data. They imposed a condition that the site refuse any commercialization.
Mangrove Capital obviously couldn't accept this -- after all, they weren't running a charity. Naturally, the deal collapsed.
One could only say that the shareholders were rather naive; they could barely make a living, yet they were insisting on ideals and beliefs.
...
Winnie reported the situation to Linton, who admired the shareholders' dedication but disagreed with their stance and had no intention of giving up easily.
He advised Winnie, "Since they haven't hit bottom yet, let's push them a bit to face reality."
...
For the next two weeks, IMDb suffered continuous hacker attacks.
Without enterprise-level firewalls or professional security staff, the site was frequently down and customer support was overwhelmed by calls.
The solution was simple: purchase professional security software and hire experienced site maintenance engineers -- but these required funds IMDb lacked.
At that critical moment, Mangrove Capital returned with a new proposal.
This time, the two sides compromised, sidestepping the contentious commercialization issue.
They agreed IMDb would remain free for all users while allowing commercial operations behind the scenes.
Mangrove Capital invested $2 million, securing a 40% stake and becoming IMDb's largest shareholder.
*****
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