The female assistant was the second person to know about Simon's plan to acquire Bell Atlantic. The first one was naturally Janet.
Simon plans to rush to New York after finishing his trip to San Francisco to formally discuss with the top executives of Westeros Corporation and Cersei Capital the feasibility of launching dual-line operations of the MCA acquisition and the Bell Atlantic acquisition at the same time.
This trip to San Francisco was mainly about Ygritte and AOL.
Ygritte's problem is simple: the company is out of money again.
After Carol Bartz and Jeff Bezos jointly took charge of Ygritte, Simon was quite satisfied with the recent work results.
Igret continues to consolidate the company's patent barriers in the field of World Wide Web technology through continuous investment in technology research and development. The software sales business has quickly opened up with Carol Bartz's many years of work experience in the industry. The number of users of the portal continues to increase. At the same time, It also successfully opened up the Internet advertising business, and so on.
However, these all mean a large consumption of funds.
Simon is very clear about the meaning of the hundreds of core patents of World Wide Web technology that Yigrit has mastered. Yigrit has developed a complete set of graphical interface browser software, server software, web design software, etc. based on World Wide Web technology. Application tools are all software products with very solid business prospects. Therefore, Simon plans to invest an additional US$50 million this time in order to continue the development and promotion of World Wide Web technology sites.
When Igrit was established, the total share capital was 10 million shares, of which the Westeros Company invested 10 million US dollars to hold 9 million shares, and Tim Berners-Lee held another 1 million shares. In the last capital injection of 20 million U.S. dollars, the total share capital of Igret doubled. Tim Berners-Lee's shareholding did not change, still 1 million shares, but the shareholding ratio was reduced to 5%.
This time, Simon did not let the professional asset appraisal team intervene and personally determined the valuation of Ygrit at US$50 million. For a start-up technology company that has not yet generated stable revenue, this number is a bit high, but Simon believes that Yigrit is worth this number.
On the other hand, Simon still has no intention of squeezing Tim Berners-Lee's shareholding ratio. He has always been very fond of the founder of the World Wide Web. Therefore, just like last time, Li was provided with a plan to maintain his shareholding ratio through loans.
However, Tim Berners-Lee did not accept this time. He is very satisfied with his holdings and his current job.
Although Simon plans to use a portion of Yigret's equity to reward company executives and employees at the right time, he will not give the equity to someone for nothing.
As a result, the total share capital of Ygritte doubled again to 40 million shares. Westeros Company's shareholding in Ygritte increased to 97.5%, and Tim Berners-Lee's shareholding increased to 97.5%. The share ratio is reduced to 2.5%, and the number of shares held is still 1 million shares.
As for AOL, the main thing is still negotiating the exclusive agreement with Steve Case.
Although Simon plans to acquire a telecommunications company in advance, AOL's development pace will not be adjusted in the short term. As long as it can sign exclusive agreements with three regional telecom operators: Bell Atlantic, NYNEX and Bell Pacific, AOL's development in the next few years will be more effective with less effort.
Of course, the biggest problem in this matter is funding.
AOL shareholders are not like Tim Berners-Lee, who suggested that after the agreement is concluded, they can temporarily obtain funds through loans to pay for the first-year buyout payments of the three companies.
The three companies still insist on paying exclusive fees based on the overall number of users, but there is still a lot of room for negotiation on the specific amount. In the end, as the female assistant predicted at breakfast last time, the exclusive fees will be reduced to about US$1 per household. By then, the amount of just over 20 million will be fully within AOL's credit line.
This time, Simon also had a general understanding of the operating conditions of the 100 Internet cafes owned by AOL.
Within one month of opening, thanks to excellent early promotion and the public's curiosity about this new leisure and entertainment venue, AOL's 1 million Internet cafes achieved total revenue of US$2.06 million in the first month, with an average revenue of each Internet cafe Turnover exceeds $20,000.
Regardless of the initial investment, excluding store rent, employee salaries and power grid expenses, in this month alone, AOL's Internet cafe chain generated a gross profit of US$530,000.
If this business situation continues, AOL will be able to recoup its initial investment in about two years.
Because of the exemplary role of these 100 Internet cafes, some people have begun to contact AOL hoping to open a franchise chain.
Moreover, in the previous month, the number of users who received customized Internet access coupons and accessed the Internet through AOL's Internet café channels reached more than 2,600, equivalent to 5% of AOL's Internet users in the same period. This is what Simon values most. .
The fundamental purpose of Simon's original proposal to open Internet cafes was to guide people to become familiar with and access the Internet.
In just the first month, it brought in more than 2,600 new users. This conversion rate far exceeded the initial expectations of the AOL team. It is conceivable that as the content of the IE browser continues to improve and the service functions that the IGRET portal can provide further increase, more people will definitely be inclined to access the Internet at home.
Now that this goal has been achieved and will continue, AOL no longer intends to hold the 'Internet Bar' subsidiary in its hands.
Two years is still a long time to get back to where I am.
AOL headquarters in Palo Alto.
After the discussion meeting on the progress of the exclusive agreement negotiations between the three telecom operators, Simon and Steve Case were left alone in the conference room. Steve Case talked about the Internet Bar.
"We have contacted several private equity funds on Wall Street, and three of them are interested in Internet Bar. The highest one has made an offer of US$10 million for the 50% stake held by AOL. I think we should be able to negotiate in the end. to US$15 million. If we cash out in advance, we will cover most of the first-year expenses of signing the exclusive agreement with the three Bell Atlantic companies."
Since he did not plan to make money from these 100 Internet cafes in the first place, Simon is actually not opposed to cashing out.
However, rushing to sell just one month after opening must be a bit of a disadvantage.
Whether it is US$10 million or US$15 million, they are only quotes for 50% of the existing 100 Internet cafes. If you manage patiently for a year or two and develop Internet Bar into a larger chain operation system, the value of this company will definitely increase significantly.
Simon waited for Steve Case to finish and asked, "Where's IBM?"
"IBM intends to continue to hold its shares, but they have no objection to us selling our shares. After we launch, IBM's team can take over the operation of Internet Bar."
A behemoth like IBM, with a recent market value of more than 50 billion US dollars, will not care about a small start-up company like Internet Bar. To be precise, the last time it participated in the investment was only IBM's venture capital department. Every giant company will have similar departments under its umbrella.
Compared with America Online, which is in urgent need of funds, IBM's investment team understands that Internet Bar still has a lot of room for appreciation, so there is no need to be too eager to cash out.
Simon understood why Steve Case was impatient in this matter. The AOL team was very worried that he would continue to spend money to dilute the shareholding ratio of other shareholders. After thinking for a moment, he did not insist and said: "Since you think it's appropriate , then sell it. However, we must ensure that Internet Bar cooperates with AOL in user promotion."
Seeing Simon relent, Steve Case nodded immediately and said, "I understand. In fact, this matter was part of the negotiation conditions between me and those private equity funds from the beginning. By the way, Simon, if Cersei Capital If you're interested in Internet Bar, $13 million is fine."
AOL only invested US$3.5 million in the Internet cafe project. Even if it were sold for US$13 million, it would still be able to obtain a return of close to 300%.
Simon shook his head. He had already discussed this matter with Janet.
Cersei Capital is a very important layout for Simon on Wall Street. Unless necessary, he does not intend for Cersei Capital to intersect with too many businesses under the Westeros Company. This will easily lead to conflicts of interest and cause criticism. The $2 million It’s a small bargain, and there’s no need to take advantage of it.
"Cersei Capital will not be involved in this matter," Simon said after refusing, "Let me tell you about another thing. You should know that I have made a lot of money overseas in the past two years."
When Steve Case saw Simon's refusal, he secretly breathed a sigh of relief. Two million dollars was nothing to Simon, but AOL now really needed to account for every penny of its expenses.
Then hearing Simon change the subject, Steve Case nodded and waited for him to continue.
Simon continued: "The war in Kuwait has caused the federal stock market to continue to fall recently, and now is a good time to expand. My latest idea is to acquire a regional telecommunications company, and the initial target is one of the three AOL is negotiating with."
Steve Case showed a surprised expression on his face. He calmed down after a moment and said with a smile: "Simon, I thought you would use that money to acquire a major Hollywood studio. After all, Daenerys Entertainment has no foundation. The big seven studios are so entrenched.”
Simon knew that this was probably what many people were thinking, and he smiled and said: "Many things are still uncertain. I just want to say hello to you first this time. When I go to New York tomorrow, I will formally discuss this matter with James and the others. In addition, Even to acquire a regional telecommunications company, the whole process takes about a year, so it's business as usual on AOL's side. What you have to do is try to negotiate that exclusivity agreement before the end of September. Also, remember Keep it confidential.”
Steve Case nodded solemnly, but he couldn't help but wonder which company Simon was targeting.
Although Simon was based on the West Coast, Case didn't think it would be Bell Pacific.
The name Bell Pacific sounds more grand than Bell Atlantic and NYNEX, but it is actually the smallest of the three companies. It should also be the smallest of the seven Bells. Its business scope is limited to California and Nevada.
NYNEX contains the abbreviations of New York State and New England. Several states in the northeastern United States, such as Connecticut, Rhode Island, and Massachusetts, are very small in area and are called New England for historical reasons.
NYNEX, one of the seven small Bells, also has its business scope in these two areas, and equally shares the Boston-Washington metropolitan area with Bell Atlantic.
Because the states of Pennsylvania and Virginia where Bell Atlantic is located are considered continents in terms of area and population, their scale is slightly larger than that of NYNEX.
Steve Case felt that with Simon's appetite, the only acquisition targets were NYNEX and Bell Atlantic on the West Coast. And it's more likely to be the latter.
But since Simon didn't tell him more and Steve Case didn't get to the bottom of it, any one of the three potential target companies would be a behemoth for AOL. Multi-billion dollar acquisitions are not something he can influence.
Of course, if Simon's goal really shines, Steve Case can also imagine how much help it will bring to AOL. During this period, he racked his brains to sign exclusive agreements with three companies in order to gain access to their telecommunications networks.
The huge amount of buyout funds is not just for a simple exclusive agreement.
As long as the plan is completed and the three companies open their network rights to AOL, AOL will no longer need to invest huge amounts of money and time-consuming efforts to lay its own network lines. It only needs to complete the construction of backbone cables and servers, access the networks of the three companies, and then build these networks. Telephone users with network coverage can easily access the Internet by installing a modem in their home.
After finishing the affairs at AOL, Simon also went to the Cisco headquarters.
Westeros Corporation has completed its increase in its stake in Cisco, bringing its shareholding ratio to 57.5% of absolute control.
Because the U.S. stock market has continued to plummet due to the recent impact of the Kuwait War, Cisco's IPO plan that was originally being promoted has slowed down. Simon did not let Cisco's team completely stop preparations for the IPO. After all, no one knows better than him that this economic downturn is likely to continue. time.
In the blink of an eye, it’s Thursday.
Get up early in the morning, go for a morning run in Woodside Mountain as usual, and plan to fly to New York after breakfast. Because of Simon's schedule, Janet still stayed there and planned to spend the weekend together on the East Coast.
While walking through the cool mountain roads, passing by a three-way intersection, a middle-aged man also wearing sportswear followed from the other side.
Simon glanced at the other person and greeted with a smile: "Good morning, Larry."
Larry Ellison knew from Simon's smile that the young man had figured out that he had appeared here specially. Fortunately, he was thick-skinned enough. There was nothing strange about his unshaven face, but he was very enthusiastic. He responded, "Good morning, Simon."
Seeing that the two of them knew each other, the bodyguard following Simon slowed down and walked farther away.
The two jogged dozens of meters side by side, and Larry Ellison took the initiative and said: "Simon, Westeros Company's shareholding in Oracle has recently increased to 15%. Do you still want to buy it?"
Simon said: "Oracle's stock price is so cheap recently. If you can buy more, you must do it. I am very optimistic about this company."
Larry Ellison didn't know if Simon was laughing at him.
Oracle's stock price has indeed been very low in the past few months. Compared with the highest single share price of $28 last year, it has recently fallen to around $8, a drop of 70%. The market value has also dropped from the highest US$3.6 billion to the current US$1 billion, which is terrible.
Because the stock price continues to fall, many shareholders have continued to sell Oracle shares during this period.
Then, when Westeros Company last declared its shareholding, its shareholding ratio in Oracle increased to 15% against the trend, and it increased its holdings by 4% in just one month.
By buying it like this, Larry Ellison's control of Oracle would be in jeopardy.