The one who laughs last may not win. The death of QQ Cyclone will become a microcosm of Xunlei's future.

To date, Wolf Warrior 2 has broken a new record at the Chinese box office and is expected to top 4 billion yuan. However, with rave reviews and high morale in the public opinion, it seems that there is less and less room for change. Cheng Hao posted on Weibo yesterday: To be politically incorrect, I think Wolf Warrior 2 is just average. The action is okay and the film is about killing people even if they are far away, but there is really no plot.

Although this sentence expressed the voice of some people, it was contrary to the overall trend of the environment, so it was criticized for a while, and many people condemned this behavior of taking advantage of the hot spots. Some netizens even asked: What is Xunlei? As an Internet veteran, it is probably hard to imagine that Xunlei would reappear in the public eye in this way.

However, what Xunlei should pay most attention to is not this matter. Recently, Tencent's download tool QQ Cyclone announced that it would officially cease operations. The specific service time will end on September 6. After 9 years of service, Tencent finally abandoned this star product that once shook the download service market, which also means that Xunlei has become the last survivor.

The Internet industry has always been a place where the last one standing wins, but if there is only one left, it may not be a good thing. Because the premise for this situation to occur is either a complete market monopoly or a sunset industry. The former is unlikely to occur due to legal sanctions, while the latter is an inevitable result of the changing times.

Although the deceased is in the heart, Xunlei, the vested interest, may not be feeling well. After outlasting all competitors and unifying the market, it finally found that the market had already gone downhill. This feeling must be a bit bitter. More importantly, the demand for download services is gradually decreasing. Whether and when this last wall of Xunlei will fall is a question, especially without the download business, what kind of situation will Xunlei fall into?

The one who laughs last may not necessarily win, but may also end up losing both sides.

During the past 14 years, Xunlei has always had many competitors, but now it is the only one left, which seems a bit lonely.

In 2002, Zou Shenglong and Cheng Hao, who called themselves the third generation of Internet returnees, co-founded the Third Generation Technology Development Company in Shenzhen, which was the predecessor of Xunlei. But when the company decided to focus on download services, Xunlei was already five years late, as Hou Yantang's Internet Express had already occupied 80% of the market share.

Fortunately, Zou Shenglong and Cheng Hao had a clear positioning of the product's advantages, and with Hou Yantang's embarrassing excuse of being addicted to games and not having time to update Internet Express, Xunlei, after securing its support, ushered in a new era of rapid development in 2006. However, misfortunes could happen at any time, and what followed was an unpredictable anti-Xunlei alliance, and under the leadership of leaders such as Hua Jun and Zhang He, many potential enemies emerged.

After the incident was settled through a settlement, Xunlei became the latecomer, but eventually faced a real rival, QQ Tornado, which was supported by Tencent. After its launch in 2008, Tornado Download snatched a lot of Xunlei users with its minimalist page style. In addition, its offline download service, cloud playback function and low service fee made QQ Tornado more attractive, especially with the help of Tencent, it was like a "minesweeper".

Judging from the situation that products such as NetAnt and KuaiChe competed for supremacy and took turns to dominate, the download service market in the early days of the Internet can indeed be described as "a hundred flowers blooming", and Xunlei was lucky to be able to survive to the end with its strong strength. Moreover, the farewell of QQ Cyclone, its biggest rival, actually brought real benefits to Xunlei.

On the one hand, most of QQ Tornado's users will flock to Xunlei's last camp, which is undoubtedly the biggest benefit for Xunlei, whose membership is constantly decreasing. It can also reduce the decline of Xunlei's download business and buy some time for the company's transformation. On the other hand, it is true that the market demand for download services is constantly decreasing, but this does not mean that the industry will completely disappear. It is much better for one company to dominate the market than to divide the market.

Of course, what cannot be ignored is the situation and sadness of being the last survivor in the industry.

First, Xunlei is alone in fighting against the decline of an outdated industry, and it is inevitable that it is powerless. Download services are a special product of the popularization of the Internet, corresponding to the specific situation of unstable networks and scattered resources at that time. However, the progress of the times has shaken the foundation of the existence of download tools. Products including video websites, clients, cloud disks and browser download plug-ins meet the user needs for resources and downloads at the same time, and the functions of Xunlei, a special download tool, have been weakened accordingly.

Second, the problems of the Thunder download tool itself have led to a poor user experience, exacerbating the loss of members and downloads. Take the latest Thunder 9 as an example. This product combines browser, download and advertising. Although the interface is simpler, as soon as the browser window on the right is opened, the information and advertisements of the Thunder video platform will be forced to appear and play. This experience is very different from the user's simple download demand for the tool, which is undoubtedly self-destructive.

Lenovo went to great lengths to climb to the top of the PC industry, but ultimately had to embark on the road to revival under the impact of mobile Internet. Tianya Community, as the last line of defense of BBS, has long become synonymous with outdated products. Xunlei is also part of this decline. Its industry status and value have collapsed, and the last camp supporting download tools is in jeopardy.

It may only be a matter of time before this wall of Thunder downloads collapses.

Since the rise of video websites, the demand for offline downloads has been weakened. Until the mobile Internet era, this industry has suffered a devastating disaster, and only Xunlei is left to support it. In other words, once Xunlei shuts down its download service, it means that pure download tools will completely withdraw from the Internet stage and disappear in the changing trends. Will this scene become a reality?

In this regard, we should not only focus on the warning of QQ Tornado's suspension. After all, it is under Tencent, and the overall interests are taken into consideration when it was abandoned from marginalized products. Xunlei is different. It started out as a downloading business and has long been a dominant company. According to common sense, Xunlei would not go to this step unless it was absolutely necessary. Moreover, the disappearance of the biggest competitor has made up for the gap in the reduced market demand to a certain extent, and the advantage of being the only one has become apparent.

However, in addition to the intrinsic motivation of user demand, Thunder's own internal problems and the industry background in which it operates may be more critical factors.

According to Xunlei's recent financial report, the number of members has decreased and the revenue has fallen. In the fourth quarter of 2016, Xunlei's membership business revenue was US$21.7 million, a year-on-year increase of 9.5% and a month-on-month decrease of 8.2%, mainly due to the decline in the number of members. As of December 31, 2016, the number of members was 4.97 million, compared with 5.14 million in the previous quarter and 5.02 million in the same period of 2015.

This situation has become even worse in the first quarter of this year. It is reported that the membership income was 20.8 million US dollars, a year-on-year decrease of 6.0% and a month-on-month decrease of 4.2%. As of March 31, 2017, the number of members was 4.08 million, 4.18 million in the previous quarter and 4.49 million in the same period last year. It can be seen that Xunlei's main business has reached a serious decline, and the company's continuous losses have made people doubt whether it can continue to support the download service.

On the one hand, Xunlei's net loss from continuing operations in 2016 was US$24 million, and the net loss was US$2.4 million in 2015. In the first quarter of this year, the net loss was US$6.715 million, compared with US$5.534 million in the same period last year, a year-on-year increase.

On the other hand, as of December 31, 2016, Thunder held cash, cash equivalents and short-term investments of US$381.5 million, while this figure was US$432.1 million at the end of 2015. As of March 31 this year, it had dropped to US$370.9 million. It is one of the few companies whose cash flow exceeds its valuation.

In short, with its core business damaged, Xunlei has to spend a lot of money to seek transformation, which may mean that it is already marginalizing its download services.

The commercial demand for download services has gradually weakened, which is indeed largely affected by the industry trend of technology-driven and product replacement. However, from a higher perspective, it is also a microcosm of the decline of tool products. In the early days of the Internet, a group of early tool applications were born to meet the rigid needs of the market. After years of accumulation, they have tens of millions of users, and their user activity and retention rates are excellent. Xunlei is one of them.

However, the economic law of converting user value into commercial benefits is obviously not applicable to these tool products that best meet the "use it and leave it" standard. While bearing high costs, it is always difficult to find a way to monetize. The lack of a foundation for carrying advertisements has also made this most realistic model have always received mediocre response. In general, the atmosphere of "tools must die" has already appeared in the PC era, and the download service is now facing this long-standing product dilemma.

Therefore, the disappearance of Thunder Download may just be a matter of time.

If it loses its downloading business, how will Xunlei survive?

Once there were many flowers in full bloom, but their beauty is gone in an instant. Apart from occasional mourning, few people actually care about the lives lost. This is even more true with the successive generations of business. For products or companies that have become marginalized, perhaps only sentiment is left to talk about, and this is also the case with Thunder.

But in addition to expressing regrets about a company's ups and downs in the Internet wave from a macro perspective, the role played by the company itself cannot be ignored, just like tool products seeking to transform into platforms or communities, which is both a survival instinct and the courage to explore. In this regard, Xunlei is undoubtedly slow to react. The extension of multiple businesses is either following the trend or rushing around without direction.

In 2006 and 2007, Xunlei launched Dog Search and Xunlei Kankan, which became Xunlei's main core business for a long time. Later, Xunlei also entered the fields of web games, mobile software, security assistants, game acceleration, etc., and also included cloud technologies such as game acceleration, cloud storage, and online video playback.

From the perspective of the time, there was nothing wrong with these products as extensions of download services, especially the membership system derived from Xunlei, which largely supported the company's profit source. However, on the one hand, we can see that these projects of Xunlei were basically only popular at the beginning, and ended up in failure. Even products like Xunlei Neighbor violated the basic privacy of users, which once again shows the difficulty of Xunlei in transforming from a tool to a platform.

On the other hand, while Xunlei was concentrating on launching new products, it missed the best opportunity to influence its future development. As Cheng Hao said, the three opportunities Xunlei once faced were browsers, streaming media, and mobile app stores. The most regrettable of these was the mobile app store, because Xunlei should have been an app store on mobile phones by nature.

It has to be said that the loss of the download service market may be an inevitable trend, but Xunlei, a veteran of the Internet, has had many opportunities to move the company away from the tool positioning, but the reality is not as expected. In the final analysis, Zou Shenglong is responsible for a great deal. However, now that Chen Lei is in charge and the power is handed over, the outside world has new expectations for whether Xunlei will set sail again and create a different situation. In particular, the Star Domain CDN that he cultivated is gradually becoming the starting point of Xunlei's transformation and a new force in its business. This may mean that Xunlei, which has given up its download business, still has new options.

Xunlei's first quarter financial report this year showed that Internet value-added revenue (including cloud computing) was US$15 million, a year-on-year increase of 20.6% and a month-on-month increase of 14.0%, of which cloud computing revenue increased by 86.5% year-on-year and 36.3% month-on-month. In terms of business share, the rapid growth of cloud computing for seven consecutive quarters is the main driving force behind Xunlei's total revenue to maintain a five-quarter growth.

Take last year's live broadcast boom as an example. As a technology company born out of Xunlei, Star Domain CDN not only has Xunlei's accumulation in cloud computing, but can also directly face Xunlei's countless C-end users, giving hundreds of millions of distribution nodes to choose from. Therefore, after obtaining the first batch of top customers such as Xiaomi and iQiyi, Star Domain CDN has successively gained many live broadcast corporate customers such as Panda Live, Momo, Chushou TV, bilibili, Dapeng VR, and Zhanqi.

Of course, in the CDN field, Xunlei can only be regarded as a rising star. Traditional companies such as Wangsu and ChinaCache will inevitably become insurmountable obstacles. However, in the case of the decline of traditional businesses, this may be Xunlei's only life-saving straw.

Xunlei is a rare witness to the ups and downs that the Internet has gone through in my country over the years. Moreover, for a company that started with technology, most people are happy to see Xunlei return to its technological positioning rather than being a blind follower.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.