Lao Tzu eventually died. No big shock there. His books and philosophies, however, lived on. In the second century A.D., the book, Dao De Ching, was rediscovered and revised, and revised, and revised. The original document no longer exists, but nonetheless, the philosophy has survived.
Time marches on, and so did the philosophy.
Confucianism became the State philosophy. In other words, the government ran on Confucian principles. Yet, the government officals used Daoism as an escape from that lifestyle. The two seemingly incompatible philosophies now work together to balance the lives of Chinese officials. Well, until the Communist takeover in the 1940's.