[Chapter 733: The Wrong Path]
"Before this, while various personal websites had already emerged on the internet, these all required a foundation of professional computer skills to be realized. Yahoo's personal homepage service would break through this limitation. Whether you were a student, a chef, a painter, a singer, a model, a plumber, or a homemaker, as long as you wanted to, you could create a personal homepage through Yahoo and showcase yourself," Jeff Locke remarked as he clicked the remote control in his hand, displaying users of personal homepages from various walks of life on the large screen behind him. These users were all invited participants from the testing phase of Yahoo's personal homepage service, including social celebrities from politics, business, Hollywood, and the tech industry.
After briefly outlining the general concept of personal homepages, Jeff Locke switched the screen and continued, "Yahoo's personal homepage connects users from across the United States and around the world through two main categories: interests and locations. This invisible web allows you to showcase yourself to everyone while enabling us to find like-minded friends from all corners of the globe, all through a personal computer, without having to travel or engage in frequent social activities..."
As thunderous applause resonated in the auditorium, Bill Gates snapped out of his deep thoughts. He glanced at Jeff Locke on stage, who was nodding to the audience, and made up his mind.
Although he had already missed the last opportunity to enter the browser software market, Microsoft could still venture into the portal website business, which was relatively easier to imitate. Over these days, Microsoft had probed much of Yahoo's senior management. Bill Gates was also aware that other tech companies interested in the internet industry were making similar moves.
Among Yahoo's four main executives, CEO Ian Gurney oversaw the big picture and was responsible for overall corporate development strategy. Jeff Locke managed Yahoo's portal and related software products, Steve Mitnick handled Yahoo's technical research and development, while the last one to join Yahoo, Tina Brown, led the Yahoo News division.
Having decided to develop the portal website business, digging Jeff Locke from Yahoo would unquestionably yield twice the results with half the effort, given his familiarity with the operation rules of portal sites. Moreover, during preliminary inquiries, Bill Gates realized that of the executives, Jeff Locke had been the most receptive to Microsoft's poaching efforts, largely due to his dissatisfaction with the stock equity reward he was about to receive.
Once the press conference ended, guests began to exit, and Yahoo prepared to hold a reception at a nearby hotel. Bill Gates waved over an assistant who had been sitting nearby, quietly instructing him to set up a meeting time with Jeff Locke, before smiling and walking over to Eric and others.
...
The television broadcast of Yahoo's network product announcement created quite a stir. The subsequent two days of technology and advertising alliance press conferences in Boston attracted even more media attention.
While attending related events, Eric's time was crammed with various responsibilities. Yahoo was rapidly expanding, and the original office space was becoming increasingly shabby. Due to confidentiality needs, Yahoo also could not continue staying in its previous office location.
Both Yahoo's executives and Eric hoped to establish a proprietary corporate campus, but such plans couldn't be realized overnight. After searching, Eric ultimately settled on a thirty-story office building on Massachusetts Avenue. The building had just been completed and was still available for lease, so Eric decided to rent the entire building for Yahoo's temporary headquarters until the corporate campus was constructed a few years later.
Additionally, even though Yahoo had temporarily shelved its IPO plans, Steve Case still hoped America Online could initiate its own IPO. Jorma Ollila also wished for Nokia's stock to list on the New York Stock Exchange, which would not only raise some funds but also help Nokia enter the American market. Eric had to allocate time to discuss these issues in detail with them.
Aside from these matters, Eric also conducted one-on-one discussions with several of Yahoo's senior executives regarding the stock equity reward plan's outcomes. Although some individuals showed inclination to leave Yahoo, Eric hoped to retain as many as possible.
The most unexpected part of this process was Jeff Locke. In the preliminary equity reward plan, the four main executives -- Ian Gurney and Steve Mitnick were set to receive three million shares of Yahoo stock, while Jeff Locke would receive two million shares and Tina Brown one million shares. As a manager from the original three companies before their merger, it was predictable that Jeff Locke would feel discontented with receiving a million shares less than Ian Gurney and Steve Mitnick.
However, Eric didn't perceive this arrangement as unfair. Ian Gurney oversaw Yahoo's overall development and personally managed the establishment of Yahoo's technology and advertising alliances. Many of Yahoo's advertising partners and clients were secured by Ian Gurney himself. Meanwhile, Steve Mitnick, as the Chief Technology Officer, was responsible for the technical development of all products under Yahoo, bringing in genius-level talents. Their contributions undoubtedly exceeded those of Jeff Locke, who only managed Yahoo's portal operations.
After all, Yahoo was no longer what it once was. It had evolved from just a standalone portal site into a multifaceted business that included instant messaging software, browsers, and more. While the portal site was clearly Yahoo's most dazzling division, Jeff Locke had inevitably fallen behind Ian Gurney and Steve Mitnick in importance.
...
Five days passed in the blink of an eye, and it was already July 14. Yahoo's annual meeting concluded that afternoon, with most guests having departed Boston. Although Eric had initially planned to leave that afternoon, he was forced to extend his stay until the following morning due to unresolved matters.
It was now 7:30 PM as Eric and Chris left Yahoo headquarters, walking side by side along the sidewalk on Massachusetts Avenue, followed closely by their assistants and bodyguards.
"So, he's confirmed to join Microsoft?" Chris kicked a small stone off the sidewalk as he asked Eric.
Eric nodded. Although he had raised the offer to 2.2 million shares, he still couldn't convince Jeff Locke to stay. The latter insisted on equity matching Ian Gurney and Steve Mitnick with three million shares to remain, which Eric simply couldn't accommodate. With a helpless smile, he remarked, "Actually, this isn't too bad. It gives Microsoft a direction to focus on, and Gates won't come meddling with us."
Despite having established a robust technological and patent barrier, Eric's trepidation towards Microsoft hadn't diminished at all. After all, many of Yahoo's software would need to operate on Microsoft systems. If Microsoft felt cornered and decided to break off relations, Yahoo would undoubtedly be in serious trouble. While such a possibility seemed slim, it still existed. Based on Eric's past experiences, Microsoft's approach to competitors was often ruthless after securing dominance in the operating system sphere.
Chris understood Eric's concerns and nodded. "Now that everything's done, how do you think it went?"
The scene in Boston had stirred quite a commotion to lead other competitors astray. Although Eric had explained this to Chris, he remained unsure whether it had indeed been effective.
"Didn't you see it yourself?" Eric appeared more relaxed as he answered, "Since Microsoft chose to poach Jeff Locke, at least for the next two years, he won't pose much of a threat to us."
Based on prior experience, later versions of Yahoo and Google became two fundamentally different internet entities. Rather than a tech company, Yahoo functioned more like a media company, whereas Google, which focused on search engine technology, was a bona fide tech firm.
While media companies face various thresholds and barriers in the real world, the barriers in the realm of the internet were terrifyingly low. Eventually, individuals could operate internet media businesses on their own, giving rise to what became known as "self-media."
In such a context where entry barriers were incredibly low, websites primarily focused on media information were likely to proliferate. It was nearly impossible for any company to become an internet giant solely through content advantages. The future of internet enterprises belonged to platforms like Google that specialized in the integration of vast amounts of online information as a search engine.
Yahoo's failure to escape the trajectory of decline, even after multiple reforms, stemmed from its inability to make a decisive choice between its media attributes and tech attributes. In the end, while it managed to outlast America Online by over a decade, it still couldn't evade its destined fate.
Eric's series of maneuvers in recent days aimed to guide other competitors to focus on developing internet media businesses, namely, portal sites. He even spoke whimsically at an industry exchange conference two days prior, drawing vivid analogies between portal sites and the three major television networks. He described the relationship between portal sites and their advertising partners as akin to that of television networks and affiliate stations, greatly praising the sector's growth potential. He predicted that once internet user numbers reached half of television viewers, portal site revenues would surpass those of traditional television networks.
From the reaction on-site, it was evident many believed him. After the conference, Steve Case expressed interest in ramping up America Online's investment in its portal business. Although initially, based on Eric's persuasion, Steve Case had determined that America Online would prioritize its role as an internet service provider, Eric hadn't asked America Online to abandon portal operations. This sector could significantly boost America Online's stock price during the internet bubble a few years later.
Eric had been accommodating to Steve Case, readily agreeing to his request and offering technical support.
While many gravitated toward the inevitable decline of portal sites, most likely, they had no idea Eric was most concerned about the seemingly inconspicuous Yahoo search tool at the top of Yahoo's homepage. Over the years, he had subtly invited Steve Mitnick, responsible for technical research, to intensify the development of intelligent search engine technology.
As they chatted, they soon reached the hotel's exterior. Chris glanced up at the brightly lit restaurant on the second floor and told Eric, "Jeff Bezos must already be up there. He wasn't pleased when you suddenly canceled the meeting the other day. I had to work really hard to finalize the terms with him."
Eric had initially planned to meet with Jeff Bezos the night before to discuss increasing investments in Amazon. However, he became delayed by other matters and ended up arriving back at the hotel around 8:30 PM, making their meeting impossible. In the absence of time, Eric could only rely on Chris to connect with Jeff Bezos. Fortunately, that turned out well.
According to the agreement Chris reached with Jeff Bezos, for the next few years, Firefly Investment would be directly responsible for financing Amazon's e-commerce platform. Firefly committed not to interfere in Amazon's operations, and to show goodwill, the investment would provide funds in exchange for Amazon's convertible preferred shares.
Preferred shares typically do not hold voting rights but have priority over dividends. The convertible preferred shares held by Firefly Investment would automatically convert to common shares with voting rights after Amazon's IPO.
This arrangement could encourage Jeff Bezos to postpone Amazon's IPO as long as possible, allowing Firefly Investment to acquire a larger stake. Chris anticipated that before Jeff Bezos formally decided to take Amazon public, Firefly could secure around 40% of Amazon's shares. Even after the IPO, Firefly's holdings would likely remain over 30%.
...
Once inside the hotel, they ascended to the restaurant on the second floor. Although Eric hadn't arrived late this time, Jeff Bezos was already waiting there.
Eric had intentionally delayed leaving until the following morning to ensure he could meet with Jeff Bezos. Since the agreement was already in place, both sides didn't delve deeply into collaboration issues. The atmosphere was quite pleasant as they casually chatted for about an hour to familiarize themselves before going their separate ways.
...
Before stepping into his hotel room, Eric told Kelly, "Let's head to New York in the morning and then back to Los Angeles. I need to check on the two little ones and also follow up on the production progress of America's Next Top Model and Project Runway."
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