[Chapter 719: Misleading the Entire Industry]
Chris had it a lot easier than Eric. He remarked, "Based on the initial assessment, Ian and Steve will receive 3 million shares each, Jeff Locke will get 2 million shares, and Tina Brown will receive 1 million shares. According to Wall Street's current valuation of Yahoo at 5 billion dollars, with this stock incentive plan, they're set to jump straight into the 100-millionaire club. The likelihood of the four of them leaving is very low. Besides them, a significant group of mid-level managers and exceptional employees will also receive stock options ranging from a maximum of 200,000 to a minimum of 10,000 shares. There might be some losses from this group being poached for high salaries, but it won't have a major impact on Yahoo."
Yahoo's total stock was around 100 million shares, and based on Wall Street's valuation of 5 billion dollars, the share price equated to 50 dollars. After implementing this stock incentive plan, Yahoo would instantly create dozens of millionaires internally.
The challenge for competing portal sites was minimal. To maintain a long-term lead would require massive investments in tech R&D to build patent barriers and an effort to prevent core employee turnover as much as possible. This was the primary reason Eric had formulated the stock incentive plan in the first place. If they failed to keep these strong managers and exceptional employees, those who had accumulated valuable experience at Yahoo could easily replicate the Yahoo model with the support of competitors once they left.
While Chris wasn't overly worried about Microsoft's attempts to poach talent, Eric held a different view. It was clear Microsoft was aware of Yahoo's stock incentive plan yet still chose to probe Steve Mitnick. This indicated they were prepared to make a greater sacrifice.
The final details of the stock incentive plan wouldn't be settled until the end of July, but there was no such thing as a free lunch in this world. These shares rewarded Yahoo's management for their work over the past years but also meant that the employees accepting the rewards would be tightly bound to the company.
According to the initial agreement, if employees who accepted the stock rewards chose to resign within five years, Yahoo would forcibly buy back their shares at the original grant price. The resigners would also be restricted from engaging in any internet-related jobs during the subsequent five years, or face huge penalties. Given the rapid advancement of the internet industry, being away from it for five years would almost guarantee being eliminated.
Eric believed July would be a significant turning point for Yahoo. The internet industry was just beginning to rise, with countless opportunities for overnight success. Thus, before the official implementation of the stock incentive plan at the end of July, he knew some Yahoo employees would be tempted by more lucrative offers and might decide to forfeit their valuable stock options in favor of joining other companies or even starting their own ventures.
After thinking for a moment, Eric slowly realized that while he couldn't stop employee attrition, he could leverage Yahoo's leading position in the industry to manipulate events. After all, Yahoo was already a benchmark for many emerging internet companies. Some of Yahoo's internet products had already attracted imitators, but no one had yet posed a credible threat to Yahoo's market position.
Since every move Yahoo made would be analyzed and imitated, it could potentially mislead the newcomers into a different path. The portal site model couldn't last forever, but like the forthcoming internet bubble of the next few years, Yahoo could excessively package the portal model on the surface, painting a much brighter future than its actual potential, thus distracting their major competitors into focusing solely on the portal business. In private, Yahoo could pursue the correct path, as numerous historical examples had proven that a giant company's rapid rise and fall hinged more on strategy than on funding or technology.
If they couldn't tread the right path, then even burning through 10 billion dollars yearly would be futile. Nokia had encountered a similar fate when they were dethroned by Apple in the smartphone market; their investment in R&D still far exceeded Apple's that year, yet they ultimately had to exit the market in failure.
Having outlined his primary thoughts, Eric said, "Let's talk about the plan I just thought of. Isn't Boston planning to hold a Yahoo Tech Alliance and Advertising Alliance conference? I've decided to move that up to early July and to make it as extravagant as possible. We'll also hold a Yahoo product launch during that time and promote our soon-to-be-released YahooPay payment tools and other products via television broadcast."
"Eric, I'm not too sure about that. Yahoo is already under the lens of so many people. If we make a big splash, it could be detrimental for us. Why would we do that?"
"Because," Eric said with a sly smile, "I want to mislead the entire industry."
Chris was about to continue questioning him when there was a knock on the study door. Joanna walked in and, noticing Eric's peculiar grin, remarked, "What sneaky scheme are you plotting now?"
Eric wiped his expression clean, shook his head seriously, and replied, "Nothing. Chris and I are just discussing a charity plan to donate some money to African buffaloes, trying to help control their population. Managing millions of them migrating every year can be quite an operation."
Joanna rolled her eyes gently, knowing Eric was joking. "Alright, we can talk more about this later. It's time to eat."
As Joanna left, Chris couldn't help but chuckle, "African buffaloes? How did you jump from the internet to this?"
"Elia hid the remote last night, and we were forced to watch an hour-long documentary on the African savanna," Eric laughed, getting up. "Let's head to dinner and we can discuss what we were just talking about afterward."
Chris stood up too, laughing, "Elia is so smart. She'll definitely be just as outstanding as you in the future."
"Too outstanding can be a problem," Eric replied, gesturing around their villa. "Her starting point in life is higher than any child in the world. I worry that little lady might have no dreams and might want to rule the world or something."
"Haha."
...
The two laughed as they walked out of the study. As they entered the living room, they saw little Hawaii running in, the sound of her small boots pattering on the floor, her eyes wide open, her face displaying an unusual mix of excitement and anxiety. Spotting Eric, she immediately rushed into his arms.
"Sweetheart, what's wrong?" Eric asked, stopping in his tracks and embracing Hawaii, who clung to him like a sloth. Just as he opened his mouth to speak, he remembered the expression on Hawaii's face and immediately looked toward the door.
Chris was puzzled, thinking it was the first time he had seen such a rich array of emotions on Hawaii's face.
Before she could answer, a voice echoed from outside, "Hey, Elia, why do you run away when you see Aunt Drew? You've made me so sad that I won't read you bedtime stories anymore!"
Right after that voice, a girl in a light yellow coat entered, rushing to Eric, giving him a warm hug before planting a kiss on Hawaii's cheek before she turned to greet Chris.
Everyone opted for a BBQ lunch that day, and the smell of grilled meat wafted through the living room. Eric picked up Hawaii and continued outside, saying to the girl following them, "You've now become Elia's nemesis. No more reading her scary stories, alright?"
Despite saying that, his tone carried little about holding her accountable.
With Hawaii's exceptional intelligence, both he and Joanna worried she might only focus on logic and miss out on emotions. The girl's earlier mischievous act had added a touch of normal childhood emotions to Hawaii, and Eric knew the girl would never genuinely harm his daughter, so once recognizing this matter, he didn't think much of it.
The girl made a silly face towards Hawaii, who turned her head to bury it in Eric's shoulder, giggling before linking arms with Eric and saying, "By the way, Hanks is also in New York. He didn't come over, but he asked me to send his regards."
...
While Eric was busy investing in Sprint, the summer blockbuster season in North America had silently begun, with the big opening film being Fox's Die Hard with a Vengeance set to premiere on May 19.
This sequel had cost Fox 90 million dollars, but audience reactions during the test screenings hadn't been great. With the formidable competition posed by blockbusters like Jurassic Park 2 and Batman Forever, hopes for box office success in North America looked grim. Luckily, Bruce Willis, along with Arnold Schwarzenegger and Sylvester Stallone, retained strong box office appeal internationally, which led Fox to decide to move up the North American release of Die Hard to align with the summer blockbusters.
Die Hard with a Vengeance indeed did not live up to expectations, taking only 29 million dollars during its opening week. Given its 90 million budget, this performance was nothing short of disastrous, and Fox was already certain they would shelve the series for the long run.
Yesterday, May 26, marked the second week of the summer season with Warner's Fair Game -- a film Eric had had a hand in -- debuting. This action movie had a budget of 50 million dollars and had replaced Cindy Crawford with Claudia Schiffer as the female lead. Rumors indicated significant changes to the script, but Eric had yet to follow up on box office information to see how it had performed.
Forrest Gump was slated for June 9, and Eric had entrusted its distribution to Flower Films, with Drew traveling to New York to lead the promotional tour, which, in terms familiar to Eric's previous life, was akin to a road show.
...
"Be sure to say hi for me," Eric said as they walked out of the villa, handing Hawaii over to Joanna before rolling up his sleeves to help with the grilling, turning to the girl beside him. "When are you all leaving New York?"
"Hanks is recording The Late Show today. We leave for Washington tomorrow, then Miami, and then back to the West Coast starting from Seattle," she explained, standing beside Eric grilling a skewer of chicken wings. "By the way, Amy heard that Kirk Kerkorian has started negotiating with MGM again. One of her friends saw Kerkorian with Frank Mancuso at a party last week."
Eric paused for a moment while flipping the meat before shaking his head and smiling. "Let's eat first. Don't worry about him. I'll call Frank Mancuso tonight. You guys just focus on distributing Forrest Gump."
"Sure," the girl nodded, just giving Eric a reminder. As long as he was aware of it, she wouldn't need to worry about it more.
For MGM right now, aside from the 007 franchise, other profitable series like Charlie's Angels and Resident Evil were under Eric's supervision. The rights for the upcoming summer release of Night at the Museum also rested with Flower Films. Without Eric's approval, no chance that the bank would sell MGM for a good price.
As for Kirk Kerkorian, Eric wasn't about to let him stir up trouble in Hollywood again.
...
After lunch, Eric and Chris discussed in detail the plan to mislead competitors using Yahoo.
The current internet environment belonged to what future generations referred to as Internet 1.0. During this time, users were just beginning to engage with the web, filled with confusion and curiosity about everything online. This made portals, who acted as content guides, seem like they had significant potential on the surface. However, this period was merely the initial phase of users' understanding of the internet, and as they became more familiar with the online landscape, the allure of portals, which could essentially provide only tailored content, was bound to weaken significantly as users began to desire personalized experiences.
Thus, as internet content accumulated during the 1.0 era and became richer, the dawn of the 2.0 era unfolded, marked by services catering to users' unique needs. While portals hadn't been entirely eradicated, they had become less relevant as search engines catering to information retrieval and blogs satisfying social needs started to thrive.
What Eric aimed to do was leverage the resources and advantages of Firefly Group and Yahoo's media presence to amplify the public perception of the portal model's potential. He intended to keep their main competitors' focus drawn to the portal business for as long as possible.
In the meantime, he would work to maintain Yahoo's industry advantage in the portal space throughout the 1.0 era while preparing for the transition to 2.0.
Yahoo had temporarily shelved its IPO plans, necessitating no public disclosures of any details for the coming years, thus rendering this plan quite feasible.
In this grand inflation of the bubble, even if some individuals managed to stay clear-headed, unless Eric found himself unlucky enough to run into a persistent opponent like Microsoft, Yahoo had enough strength to either win over those clear-headed individuals or obliterate them.
*****
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