[Chapter 955: Explosive Growth]
The filming date for Iron Man was finally set for March 2nd. As per usual, with only about a month left until shooting began, the crew had started to gather.
However, as the leading man, Eric knew he wouldn't be able to fully focus on the film. With Yahoo's full-year financial report for 1997 released, Eric found himself having to leave Los Angeles once again to fly to Boston for Yahoo's annual meeting. This meeting would not only discuss Firefly's continued investment into Yahoo, but it would also initiate preliminary talks with Morgan Stanley about Yahoo's potential initial public offering (IPO).
To build momentum for Yahoo's IPO scheduled for early next year, the financial report was immediately announced on the front page of Yahoo's portal.
The highlights in this annual report caused a media frenzy and once again energized the capital circles. For the entire 1997, Yahoo's total global registered users reached 70.9 million, commanding 70% of the global internet user base. Among these, North American users numbered 51.7 million; this figure was more than twice the combined total of all other similar portals in the United States.
Additionally, Yahoo's online payment tool, Yahoopay, promoted heavily in 1997, saw its active user count surpass the 10 million mark, reaching 11.35 million. Since its launch in April, Yahoo Music Store had increased its song catalog from an initial 200,000 to now 700,000, with 55.3 million songs sold throughout the year. While this number was insignificant compared to the total value of the global recording industry, the rise of online music sales posed a substantial threat to traditional record companies.
Of course, the most dazzling figure from the annual report was Yahoo's explosive revenue growth for 1997. In contrast to 1996's annual revenue of $194 million, Yahoo's total annual income skyrocketed by 327% to reach $636 million. Although the $636 million revenue was still far from competing against the leading internet giants to come later, it nonetheless captured the industry's attention.
Although Yahoo's financial figures still reflected a substantial loss of $359 million for the year, the revenue of $636 million indicated a clear profit outlook after six long years of investment, dating back to 1992. Previously, due to the trend of internet services becoming increasingly free and shared, countless industry analysts and media had questioned whether portals like Yahoo could ever achieve stable revenue and profits comparable to traditional media.
In any industry, if there's nothing but investment without return, it could never develop or grow. Now, with over $600 million in annual revenue, Yahoo had finally demonstrated the vast potential for internet-only businesses.
Eric recognized that the new Yahoo had surpassed the old one from a bygone era, making them almost incomparable.
However, in Eric's view, this was only natural. The new Yahoo not only became established two years earlier than its counterpart in the original timeline, capitalizing on the rising tech wave but also managed to consolidate a range of popular internet products and services under one roof -- graphic browsers, email, portals, instant messaging, search engines, online payment solutions, and many others that were not originally invented by a single company.
It could be said that unlike the previous Yahoo, which seemed to have never quite found its way in both rise and fall, the new Yahoo had been traveling down the correct fast track from its inception, pooling the essence of the entire internet age into its offerings.
The diverse range of internet product services created a powerful synergy, allowing Yahoo to gain an early advantage that could potentially monopolize the internet industry. Against the backdrop of an explosive growth in internet users, the massive user base of Yahoo's multiple popular products propelled its advertising business -- based on the long-tail theory -- towards a clear ability to generate profits. Of the $636 million in revenue for 1997, advertising income reached $527 million, accounting for an impressive 82.7% of total revenue.
...
From February 3rd to February 6th, Yahoo's annual meeting took place continuously over four days. It was finally decided that based on a valuation of $15 billion, Firefly would again inject $1 billion into Yahoo for 14.5 million shares.
Initially, due to Jeff Locke and others opting out of stock rewards upon their early departure, Yahoo had issued a total of 17.3% of its total shares, which amounted to 17.3 million at that time. After subsequent investments from Firefly, the shareholding proportion of Yahoo's management and employees had begun to gradually decline.
Following this new $1 billion investment, which provided an additional 6.7% ownership of Yahoo, the total shares increased to 216.5 million, and Firefly's ownership percentage rose to 91.7%.
At the same time, with Yahoo's stock price nearing $70 based on current valuations and shares, in order to ensure a smooth IPO early next year, Yahoo planned to undergo a stock split by the end of the year, dividing each share into three to reach a total of 649.5 million shares.
This way, after an IPO aimed at increasing shares by 30%, Yahoo's total shares would approach 1 billion, keeping the stock price around $15, a figure likely to attract investors, with 1 billion shares providing a perfect balance.
At the start of next year, with the Nasdaq index poised to surge to new highs, Eric knew Yahoo's valuation would soar yet again. So, according to this stock-split plan, the stock price could hardly remain around $15; however, he did not voice any objections to the plan discussed with Yahoo's management and Morgan Stanley. Plans often adapt to change, which could be amended later.
...
After the four-day meeting, the internet company partners who had arrived for Yahoo's annual meeting started to leave, with the Morgan Stanley team returning to New York in high spirits.
Eric, however, did not rush back to Los Angeles.
On February 7th, despite it being Saturday, Eric, along with Chris, Yahoo's Ian Gurney, Steve Mitnick, Tina Brown, and Firefly Electronics' Victor McNally and Bill Olson, along with Jorma Ollila from Nokia, headed to a highly secure laboratory at Yahoo headquarters.
Just days prior, after Eric had just arrived in Boston, Steve Mitnick had informed him that using the existing R&D results from Yahoo and Firefly Electronics, they had successfully built a prototype of a tablet computer. The eight men were there to view Steve's demonstration of the prototype.
Inside the lab, Steve Mitnick sat at a control panel, holding a ten-inch thick tablet prototype. As he demonstrated various functions to the seven others gathered around him, he explained, "The operating system core is entirely based on the latest ARM 32-bit chip architecture. We have completed drivers for the micro hard drive, processor, and display, and we're now working on the network connectivity module. By the end of the year, we'll develop specific applications based on several of Yahoo's internet products."
Eric watched as Steve used his finger on the color touchscreen to demonstrate simple text input, image browsing, and audio playback. After patiently listening to some professional exchanges, he eventually took the prototype from Steve. Although the screen's pixel quality was low and grainy, Eric was highly satisfied with the results given the technology both companies had amassed.
After typing in some text and playing around with it for a bit, Eric flipped the prototype over but felt a tinge of disappointment at the flat casing. He asked, "Steve, is there no camera installed?"
Steve Mitnick replied, "Eric, the lab at Firefly Electronics didn't provide me with a camera module that could fit into this machine. I've checked the related lab materials from Nokia, and their development is also moving slowly."
Eric pondered, "What about Japan? Their expertise in digital camera technology should surpass ours significantly?"
"That, I'm not sure about," Steve replied, glancing at the Firefly Electronics guys, including Victor McNally.
Victor explained, "Eric, we lack the technology and patents for digital cameras. Our team can only develop on the foundation of other companies' technology, making it difficult to produce our own micro-camera module. As for Japan, major electronic giants like Toshiba, Sony, and Sharp should be engaged in related R&D, but to get detailed information, I would need to personally go to Japan."
Eric responded decisively, "Victor, you should go to Japan as soon as possible. If you can secure the related patents for the technology, that would be ideal. If not, we should consider employing a model similar to how we commissioned Seagate to develop micro hard drives. Still, I want our tablet to have camera functionality at launch."
Victor said, "Eric, based on your original vision, I believe even without camera capabilities, this tablet should still be appealing. Based on our plans, the screen size is set at 7 inches, and a 100,000 pixel micro digital camera would hardly be able to capture decent photos."
"Right now it is 100,000 pixels, but two or three years down the road, there will definitely be 300,000 and 500,000 pixel cameras developed. We need to preemptively plan," Eric remarked, noticing Victor's facial expression still showed some hesitation. "If it only has a touchscreen and basic features like reading, listening to music, or browsing the internet, traditional PDAs could achieve that after a few more years.
What we need to do is enhance the entertainment and interactive features of this tablet to make the product more accessible to the general public. People have a strong desire to express themselves, and adding a camera function will perfectly satisfy that need.
I also discussed with Ian and the others recently that now may not be the right time for developing an internet social network, but if this tablet with camera capabilities launches, the timing would probably be right. Just think if anyone could use this tablet to capture little moments from their work and life and instantly share them with friends and family over the internet. Don't you think they would be even more tempted by this product?"
Steve Mitnick said, "Eric, I'm actually curious -- how would you enable instant sharing without a mobile communication network?"
Eric mysteriously shook his head with a smile, "Using mobile communication networks is our further goal for smart phones. As for the internet connectivity issue for tablets, I will find a way to solve that when the time comes. For now, you all just focus on delivering the product I want."
Faced with Eric's persistence, even with the imminent launch of the second-generation Fireflyer, Victor McNally decided to take the time to go to Japan.
After watching the demonstration of their mobile operating system's development results, Eric and the group also toured several other significant laboratories at Yahoo, and by the time they finished dinner together that evening, Eric finally left Yahoo Headquarters.
...
The following day, Eric would depart from Boston, and as he bid farewell to the others in the parking lot, Chris leaned against Eric's black luxury car, smiling and asked, "So, you really plan to act as Tony Stark personally?"
So far, Firefly Group had not made this publicly known. Due to the prolonged absence of news about the male lead for Iron Man, some media even speculated that the project had fallen through due to the impact of Warner's Batman & Robin from the previous year.
Chris had only found out about Eric's schedule for the upcoming months a few days ago when he inquired. Eric hadn't deliberately concealed this from Chris; it just hadn't come up until now.
Eric nodded and replied, "I've signed the contract. My salary is $3 million. The movie is about to start filming, and breaking the contract now would require compensation."
Chris had seen Eric's previous film, 17 Again, and imagined how Eric would portray Tony Stark, shaking his head with a smile, "You really do seem quite fitting; it's just natural casting."
"That's exactly what everyone is counting on," Eric chuckled back, "Otherwise, after all this time without appearing on screen, who would feel comfortable casting me?"
"I should make a cameo, maybe as your driver or something?"
Upon hearing this, Eric's smile broadened, "That position doesn't belong to you; someone else has already snagged it."
Chris thought for a moment, without any clue, and asked, "Who's so bored to take that role?"
"Larry Ellison."
Chris was shocked again, "No way! That guy is so arrogant."
Eric reminded him, "Last time, he tried to sidestep us and secretly acquire Apple."
"Oh, I get it. He wants to make up for that, but that's pretty simplistic."
"Not just that," Eric shook his head and laughed, "Oracle decided to sponsor the Iron Man crew with $5 million, just as a cameo driver."
Chris pieced together the entire situation and burst out laughing, clearly seeing how Larry Ellison fell into Eric's trap.
After chatting for a while, Eric said, "I'm heading back tomorrow. Iron Man has plenty of exterior scenes to film; I'll be busy during the first half of the year. Pay close attention to what's unfolding with Yahoo, and don't forget America Online. If Steve still insists on transforming America Online into an internet media company, we might need to consider taking control."
Chris nodded seriously, "Of course, I'll take care of it; don't worry."
*****
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