[Chapter 781: Get Your Spirits Up]
Microsoft never lacked ambition for expansion.
Beyond operating systems, Microsoft had ambitiously dabbled in the MSN portal business, Xbox gaming, Bing search engine, and more. However, their efforts were always hindered by a notorious 'catching-up' syndrome, which meant that none of these projects succeeded.
The online service centered around MSN suffered losses of $13 billion before it quietly faded away. The Xbox gaming console incurred a $3 billion loss over a decade, barely churning out a gaming ecosystem while still trailing far behind PlayStation. The Bing search engine racked up cumulative losses of $10 billion, leaving it with no presence against the powerhouse that was Google. Other failures in mobile, tablet, and social networking applications were evident. At one point, when the portal business was declining, Microsoft even attempted to acquire Yahoo for a whopping $46 billion. Fortunately for them, another equally misguided player declined the deal, allowing Microsoft to sidestep disaster.
At the time, at a celebrity party, Eric overheard Bill Gates' colleague discussing Microsoft's plans to invade Hollywood. To Eric, it was just a little entertainment -- although he thought to himself, "Well, we shouldn't underestimate them. What if they accidentally succeed?"
On the surface, Eric feigned concern, frowning slightly as he said, "Bill, shouldn't Microsoft's business focus be on IT? I don't really think making movies is a good choice."
"What's the harm in trying?" Bill Gates replied confidently, "Besides, Firefly is also straddling both IT and media, isn't it?"
Eric shook his head, acknowledging that Bill was referring to the expansive Firefly business empire. "That's not the same! Firefly Group and Firefly Investments have always been separate."
Bill smiled and took a sip of champagne from the glass in front of him, unconvinced by Eric's argument.
Gates entering Hollywood was far from a whimsical decision -- it was a result of careful assessment of the trajectory of Firefly Investments and its high-tech companies.
Take Yahoo, for instance. Without the relentless backing from the expansive Firefly Group in terms of content and marketing resources, the company wouldn't have achieved such rapid growth. Yahoo's product placement in the first Charlie's Angels film had already become a successful marketing case study for many companies.
Statistics showed that brands such as Yahoo, AOL, Cisco, and Nokia, not counting direct advertisements, were mentioned over 300 times monthly within the vast media network owned by Firefly. This subtle way of integrating these brands into the lives of consumers was the most formidable marketing tactic of all.
On the other hand, although last year Microsoft recruited one of Yahoo's top executives, Jeff Locke, to oversee its portal operations, the MSN portal, while showing some progress over the year, soon exhibited glaring weaknesses in content. Firefly and its allies were unlikely to support Microsoft with any content. While they could partner with Time Warner and others, ultimately, they would be limited. Thus, taking advantage of Microsoft's stronghold in operating systems, establishing a foothold in Hollywood by entering the media business seemed like a viable choice.
Microsoft's investment in studios led by Spielberg was merely their first step into the media industry.
From the time Jeff Locke left Yahoo, it marked the beginning of a subtle rift between the two, although they maintained a facade of friendliness.
After some polite exchanges, Bill Gates got up and walked away.
...
Eric signaled to the waiter for a refill and found himself pondering the possible ramifications of Microsoft's incursion into Hollywood. While he didn't foresee a bright future for Microsoft's foray into media, he wouldn't underestimate them either. With Microsoft's strength, if Bill was determined to dive into the media realm, it could impact Eric's own strategies for the future.
Given the current state of the media industry, aside from teaming up with Spielberg and others to create a new major studio, Microsoft had two unstable potential targets to absorb: Columbia Pictures, currently under Sony, and CBS, one of the four major broadcast networks.
Eric had been keeping a close eye on Sony's production of the Godzilla project. Although filming hadn't officially commenced, the established design of Godzilla was strikingly reminiscent of a certain underwhelming Tyrannosaurus. If Godzilla were to face failure like before next year, it would deal another blow to Sony's confidence in Columbia, thus creating an opportunity for others to take over Columbia Pictures.
Originally, Eric intended this opportunity for MGM, but with Microsoft's meddling, there was a chance they would interfere as well.
The other unstable target was CBS. After Viacom's failed bid to acquire Paramount, Barry Diller made another move to purchase CBS last year, but just when he seemed close to striking a deal with CBS's management and major shareholders, Comcast quickly halted the project, causing Diller's return to the media industry to falter once again. Hence, CBS was once more on the sales block.
Clearly, if Microsoft were to move forward after forming a major studio with Spielberg and others, Columbia Pictures and CBS would undoubtedly be prime targets, making a clash inevitable.
...
While Eric mulled over strategies to counter these moves, Elisabeth and Julia came over, hand in hand. The two women wore identical spaghetti strap dresses, albeit in contrasting black and white, giving them an odd couples look.
Approaching Eric, Julia looked at him with wide eyes, eager to lean in, but Elisabeth yanked her back. "Hey, you're my girlfriend now! Don't be getting too close to other guys -- I'll lose respect!"
Eric chuckled, recognizing that Elisabeth was publicly presenting a half-hearted 'coming out' status. Everyone knew about her relationship with him, yet Elisabeth often flaunted her closeness to Julia. Moreover, she had pulled Julia into Fox, where she was currently filming Miramax's Shakespearian romance story.
Rupert Murdoch had even called Eric to inquire about the situation, leaving him unsure of how to explain, resorting instead to vague reassurances. Murdoch was worried -- not just about this daughter, but because his eldest son, Lachlan, was also showing ambiguous signs regarding his sexuality. At twenty-five, he still didn't have a girlfriend and preferred to hang out with a bunch of 'beautiful' male models. This, in fact, was part of the reason Lachlan had been dispatched back to Australia by dear old Murdoch last year.
Patting the space to his left, Eric gestured to Julia, saying, "Don't mind her. Come sit here."
Julia shrugged off Elisabeth and sat on Eric's left, while Elisabeth shot them a disapproving look but took the seat on Eric's right.
Eric waved for the waiter to get drinks for both women, but Julia inconsiderately leaned in closer, waving her left hand at Eric. "Look, Eric, isn't it pretty?"
Eric glanced at the rose gold ring shaped like a heart. He hadn't expected Julia to show it off so publicly. The ring had the 'Williams' crest engraved on it.
Eric had commissioned a full set designed after playing cards, but he only had Virginia, Joanna, Julia, Elisabeth, Drew, Nicole, and Famke among the women still close to him. Others either faded away over time due to lack of interest from Eric or because the relationships naturally cooled off, leaving the remaining thirty-seven rings quietly nestled in a safe at Liberty City Manor.
With the wild exuberance of earlier years behind him, Eric preferred to give women a bank card instead of easily handing out rings. After all, those seven women were still the only ones to possess this set.
Admiring Julia's small hand for a moment, Eric smiled and nodded, "Very pretty." He then asked Elisabeth, "What about yours?"
Elisabeth raised her hand and indicated, "This is my couple ring with Julia, and it has nothing to do with you. Hehe, Demi Moore just asked me where I bought it!"
Eric asked in confusion, "Demi Moore?"
Elisabeth thought Eric didn't know who Demi was and explained, "Bruce Willis's wife. She's a really smart woman."
"Oh," Eric replied nonchalantly, shifting the topic. "Aren't you working on the prequels of Star Wars? How's that going?"
The buzz about the Star Wars prequels had never ceased. As a cultural touchstone for a generation, every bit of news about the films could stir discussions. Although Eric wasn't particularly invested in the Star Wars series, he still caught details through endless chatter.
When Elisabeth heard Eric mention it, her expression soured instantly. "Don't even get me started! George Lucas suddenly told us last week that shooting might get pushed back six months. He also hinted at wanting to renegotiate the distribution deal."
Eric's thoughts immediately drifted back to Bill, who had just left. The timing felt too coincidental.
"Do you know why?"
Elisabeth scanned the hall for a moment. When she didn't spot anyone, she turned back and said, "Weren't you just chatting with Bill Gates? That's your reason right there."
"Are you suggesting Spielberg is trying to pull George Lucas into that upcoming studio?"
Elisabeth, clearly aware of rumors, nodded, "Yeah, I suspect their target is Industrial Light & Magic. The film was originally going to collaborate with Digital Domain on special effects. I even had another producer talk with Stan about it, but last week when Lucas informed me about the potential delay, he also canceled any partnership with Digital Domain."
Eric sipped his drink and frowned slightly.
Though ILM had fallen behind Digital Domain in recent years, that studio was backed by a rich legacy of special effects. The reason for their decline stemmed from major blockbusters opting for Digital Domain to handle their effects, leading to a lack of projects to research and develop technology. It was almost inevitable for ILM to be sidelined.
However, just as The Lord of the Rings trilogy once supported Weta Digital, if ILM were to carry the special effects workload for the Star Wars prequels, the production process might be rocky and the costs would soar, but thanks to their experience with three major blockbusters, ILM's standards would quickly catch up. This would not bode well for Digital Domain.
What was even more frustrating was that such situations were difficult to prevent. With Hollywood's increasing appetite for special effects, no matter how large Digital Domain became, it couldn't absorb all the special effects business.
Even without Katzenberg's involvement, Spielberg, David Geffen, and George Lucas, paired with Microsoft's robust technical and financial backing, combined to create a formidable new studio. It seemed clear that Firefly needed to step up to the challenge.
"Eric, how's Titanic going? I heard it just wrapped up and the production cost has already hit $120 million?" Elisabeth asked about the happenings at Firefly, her tone laced with genuine concern as well as a touch of gleeful schadenfreude.
"Probably, to finish post-production, it'll require $200 million," Eric shrugged. At least after securing ample financial support, Cameron finally avoided any delays and wrapped filming recently, with post-production quickly underway.
"$200 million? Wow! Adding marketing and publicity costs, it's going to need at least $700 million at the box office just to break even!" Elisabeth shook her head, adding, "Cameron's films usually only pull in about $500 to $600 million at the box office."
"Yeah, I'm worried too," Eric chuckled, looking at Elisabeth, "How about Fox helps me cover some of the costs? Our production budget was originally $150 million. Could you pitch in an additional $50 million?"
Elisabeth paused, glancing at Eric, noticing his odd expression -- part joking, part serious.
After a moment, she replied, "I, um, if you really need it, I wouldn't mind investing. But you know Dad definitely won't approve."
A mischievous thought crossed Eric's mind as he said, "Why don't you talk to your dad about it tomorrow and see if he's interested?"
"My dad wouldn't agree! The chances of this project turning a profit are practically zero," Elisabeth said, feeling Eric's teasing vibe, and instinctively gave him a playful shove. "If you want to negotiate, you do it yourself!"
*****
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