The morning was busy with work. We had just seen off President Qi Feifei, and then Tian Yuan, the deputy director of the secretarial department, came in with a thick folder.
"Chairman, good morning."
"Thank you for your hard work, Tianyuan. If you have anything to do, sit down and chat."
"Oh, okay, thank you, Chairman."
At this time, the secretary, Ms. Guo Liyi, came in elegantly carrying two wine glasses. The crystal clear wine glasses contained the 1979 vintage red wine of French Chateau Latour, which was as red as blood.
"Oh...that's...thank you so much!"
He understood in an instant, Tianyuan was so moved that the back of his glasses seemed to be wet, and he quickly took the wine glass with both hands.
"Haha, this acquisition was well done. I specially prepared the celebration wine for you. Try it. The Latour red wine of this vintage is a treasure." Wang Yaocheng looked kindly, picked up his second glass of red wine today, and raised his glass.
It seemed as if a warm current flowed into his heart, like a soldier setting off for battle. With an pastoral expression, he solemnly picked up the wine glass and drank it all in one gulp, probably without tasting it carefully.
This kind of respect with Chinese etiquette is undoubtedly very effective.
Wang Yaocheng nodded with a smile; "Okay, sit down and talk."
Being able to serve as the deputy director of the Secretarial Department, Tianyuan himself is quite capable, and he single-handedly managed the merger and acquisition of Blizzard.
The acquisition of Blizzard was purely a temporary initiative of Wang Yaocheng, and the amount of the acquisition was not large. The small company of a dozen people spent US$1.36 million to acquire 82% of the equity. Three American university graduates, Mike Mowaimi, Ai
Len Adhan and Frank Pierce happily sold Silicon and Synapse (Blizzard) and achieved financial freedom before the age of 25.
According to Red Hat's status in Silicon Valley, it is an honor for every Silicon Valley startup to be spotted and invested in its acquisition, and it makes them extremely happy.
The shabby Blizzard Company didn't have much wealth. After cleaning up, it moved to the headquarters of Red Hat and settled in this landmark building in Silicon Valley. The whole thing changed from shotgun to cannon.
According to the acquisition plan, Mike Mowaimi, Alan Adham, and Frank Pierce will still retain part of their equity. At the same time, they will be engaged in the development of their favorite games in the company and preside over the development and operation of the games. They no longer need to worry about running out of funds to develop games.
It’s nice to lean against a big tree to enjoy the shade.
Small companies are often limited by the shortage of funds, and many good ideas cannot be realized, including the development of game engines, screen rendering and architectural design, which require a large investment in order to achieve the perfect results as expected.
Most of the games in the 1990s were shoddy, and looked back a dozen years later and looked ridiculously simple. The most critical factor was more perfect graphics, which required a lot of capital investment, which small and medium-sized game companies could not afford.
When it comes to game development, Blizzard is by no means lacking in creativity. The bottleneck that affects the company's further development is funding.
So, Red Hat was willing to recruit him, and the lonely Blizzard Company naturally happily embraced it. The company only had two games: "Racing" and "Lost Vikings", and there was no Tsundere.
of capital.
What Wang Yaocheng valued was the outstanding game development capabilities and genius imagination of the three company founders. Rather than acquiring Silicon and Synapse (Blizzard), it was more about recruiting these three talented developers.
In his view, the core asset of Blizzard today is these three college students.
The high-quality concept adhered to by the founders of Blizzard is almost demanding, which makes "Blizzard products must be high-quality" deeply rooted in the hearts of the people. This is due to the pursuit of perfection by several company founders who love games and are almost obsessive-compulsive.
Blizzard has a very stable grasp on the "speed" of expansion, and has grown healthily amid steady expansion.
In terms of product development, Blizzard is also good at grasping the balance between quantity and quality. The quality awareness of less over more is Blizzard's business principle.
While countless game companies are eager to launch a new game every month and compete for market share, Blizzard relies on its in-depth understanding of players, continuous pursuit of quality, and continuous innovation of games to form a
Blizzard’s unique success factors.
He strives for excellence in each of his works, and truly strives to achieve excellence in his art. At the same time, Blizzard's delays in production are also widely known, which shows that the publicity and distribution department is very unqualified.
Now that it is under the umbrella of Red Hat, this kind of childish and rash behavior will certainly not be allowed to happen again. No matter how refined the game product is, it must be finalized before relevant news can be released.
Otherwise, the credibility of Red Hat may be affected.
This small acquisition was handled very appropriately by Tianyuan, which made Wang Yaocheng quite satisfied;
"You are all very capable, but you lack experience in operating international companies. You need to make up for this lesson. Now Yu Chengde is in charge of his own business in Hong Kong, and Pan Shiyi is also doing well in Marvel.
I hope you can all grow up and take up the burden of work."
The joy on Tian Yuan's face flashed away, "Chairman, please rest assured that I will do my best."
"Okay, since you are the one who acquired Blizzard, you will serve as the company's president of operations. Don't get too involved in professional matters, and do your best to coordinate and market expansion. Game companies rely on creativity to make a living, so give your subordinates
Sufficient space for creative realization to create a relaxed environment.”
"I understand, and I will definitely do what you ask for."
"Haha, Blizzard is a part-time company. Let the people below do it. Don't ignore the priority." Wang Yaocheng reminded him again.
Don't meddle in anything. If Blizzard stifles free creative space and cannot produce legendary games, Wang Yaocheng will be the biggest sinner. He doesn't want to see this happen.
"I understand." Tianyuan really understood this time.
The chairman mentioned again and again that if you don't understand anymore, it will be hopeless and you should just pack up and go home.
a moment later
Wang Yaocheng, President Huo Jiaguang, and other mid- to high-level employees of Hong Kong Arctic Ocean Holdings, as well as Montgomery Jr.'s legal team, came to the conference room one after another to hold closed-door meetings to discuss important issues such as the company's recent development strategy and corporate structure.
At the meeting, two harsh facts were put in front of everyone.
First, the issue of supporting the sustainable development of Hong Kong Arctic Ocean Holdings Company.
Second, how to find real profit points?
The US$600 million in the account of Red Hat, the main force under his command, paid for the final payment of approximately US$100 million for the Huaizhou eight-inch wafer production base equipment, and allocated US$100 million to the Hong Kong company in advance (to implement the plan to snipe the Swire Group). In the fourth fiscal quarter, Linux operations
Operating system research funding of US$75 million, Athlon microprocessor research project research funding of US$45 million, payment of federal and state taxes of US$26 million, payment of fourth quarter personnel and office expenses of US$31 million, etc.
Including some trivial expenses, as of the end of November 1993, the account had US$285 million, which was not a lot of money for a large company.
At the same time, Red Hat assumed a Citibank loan of up to 1.4 billion US dollars, with a commercial loan interest rate of 3.8, and it should pay US$13.3 million in interest in the fourth fiscal quarter.
It may not seem like a large amount, but by the second fiscal quarter of 1994, there will be the first batch of one-year bank loans totaling US$500 million to repay principal and interest. Judging from Red Hat's current capabilities, it is not enough to repay such a huge loan.
Principal and interest.
One sentence makes it clear that Red Hat has made frequent investments, but has not harvested a project that can provide a large amount of cash income.
This is probably a common problem among Internet high-tech companies in Silicon Valley. The same is true for Red Hat, a subsidiary of Arctic Ocean Holdings. The situation looks bad.
Chairman Wang Yaocheng is very wealthy. He owns 3.3% of Nokia's equity in his Hong Kong personal investment account, making him the ninth-ranked individual shareholder of Nokia. He has received generous returns on his investment.
In just over a month, the value of the shares soared from the original US$5.71 to US$759 million, a surge of 32.92%, which is enviable.
But this is the chairman’s personal money. It cannot cover up the plight of Arctic Ocean Holdings Company, which is only going out but not coming in. It cannot be used to cover up the company’s losses. Let’s break it down by its subsidiaries;
Netscape;
After Marvel Animation swapped shares in Netscape, Microsoft's shareholding rose to 42.97%, ranking the largest shareholder, and Red Hat held 31.65%, ranking the second largest shareholder.
Netscape's profit of 45 million in the third fiscal quarter is estimated to be unreachable. Now Netscape is just a hollow company. Thank God for Mr. Stephen Ballmer not to get angry. Don't expect profits to be distributed as dividends.
Yahoo! Inc.;
It has performed well since its launch, but the company is still operating at a loss. It has burned a lot of money in promotion and equipment maintenance. Although the monthly advertising fee has reached 6.2 million US dollars, it is still losing more than 8 million US dollars every month. It is about to usher in its first
With the IPO round, the market prospects are bright.
Athlon Microcomputer Chip Company;
Huge investments are needed to continue supporting scientific research and innovation.
linux operating system project;
(Including Silicon Valley Laboratory, Helsinki Laboratory, and Jinling Laboratory.)
Huge investments are needed to continue supporting scientific research and innovation.
All the above situations highlight the shortcomings of sustained profitability. These projects have bright future prospects, but they cannot produce any benefits now. Instead, they continue to invest huge sums of money in research and development.
Chairman Wang Yaocheng's real purpose in convening this meeting is to wake up the middle and senior management, create an urgent sense of crisis, and truly feel the huge hidden dangers in the development of the company, and they cannot turn a blind eye.
He leads the planning of the company's development, and the vision of rebirth is not omnipotent. This situation must change. After realizing the huge hidden dangers in sustainable development, all senior managers must work together to promote the company to become bigger and stronger.
A similar situation exists for Hong Kong-based Caribbean Holdings, which owns Marvel;
In fiscal year 1993, the company continued to suffer losses, with losses as high as US$57 million and bank liabilities of US$322 million. Two major A-level productions, "Blade Runner" and "Austin Powers" produced before the end of the year, will be released in the summer of 1994.
Shanghai Film, this is a turnaround film that Marvel Company has high hopes for, and its box office performance is unknown.
I invested in Pixar Animation shares and are working hard to produce the animated feature film "Toy Story", but no results have been seen.
Invest in the NBA Rockets. In the new season, star player Glider Drexler will join the team. They will sign two veterans to complete the lineup. They have performed well so far in the regular season, ranking second in the league with 17 wins and 7 losses. They are expected to be in second place in the season.
Get a good ranking in the playoffs.
The Playboy brand still maintains its original brand licensing structure, with annual revenue of US$6.8 million.
Blizzard Entertainment is working hard to improve the game "Superman Survive" and plans to launch it on the SFC platform in 1994. The specific time is to be determined.
The most eye-catching is its Royal Investment Fund, which owns 3.3% of Nokia's shares, worth up to US$759 million, and owns many properties in mainland China, Hong Kong and the United States, including the Mediterranean Manor in Beverly Hills and a popular shop in the downtown area of Causeway Bay, Hong Kong.
Fixed assets such as space.
The corporate strategic development meeting was held for two days in a row. After the meeting, the smiles on the faces of the middle and senior managers were gone, and the pressure became much greater.
Everyone can see that this situation of only getting out but not getting in can't be maintained for a long time. However, there are very few suggestions with bright spots, and many people still focus on Yahoo as the breakthrough point.
The problem is that even though Yahoo has gone through three rounds of IPOs and will be listed in mid-1995 as planned, which is about a year and a half away, it still cannot contribute stable cash income and is in continuous losses.
At present, Yahoo search has been online for three and a half months. It has rapidly conquered the online search, news and email markets at an unstoppable speed, firmly holding 94% of the market share, becoming the dominant player in the online search field, and continuing to consolidate its leading position.
At the same time, a lot of money is being burned continuously, including promotion expenses, enterprise server expenses, recruitment of news editing and maintenance personnel, search engine continuous improvement and development expenses, version upgrade expenses, etc., 15 million is burned every month
US dollars.
The new advertising method on Yahoo pages has attracted a large number of corporate advertisers with highly sensitive sense of smell to test the waters, including Coca-Cola, Unilever, General Motors and other famous brands. The advertising fee market is also growing rapidly, reaching more than 6 million US dollars per month.
.
While revenue has grown, expenses have also shown a huge increase. Considering actual operations, there is far from hope of profitability. According to Yahoo's internal calculations;
Without the explosive growth in advertising costs, it would take five years to achieve profitability and break even.
Perhaps this is the norm for high-tech Internet companies.
More than 90% of the Internet high-tech startups in Silicon Valley are losing money, playing with high-tech concepts, and most of them cannot find the exact profit point. Netscape is just a freak born by accident, and it is different.
Yahoo's current situation has not deterred investors. On the contrary, in the three and a half months since its launch, Yahoo Search has conquered the global Internet search market, dazzled Wall Street investors, and has become extremely popular.
The outstanding performance of Yahoo search not only provides the best portal for Internet surfers around the world, but also provides the best search engine, which can make Internet surfing more attractive.
Data displayed by Gallup Statistics Company shows that after Yahoo search went online, the number of online hours per day reached two hours and the customer base grew rapidly. From the initial 6.1 million visits per day, it soared to 18.5 million visits, which doubled.
many.
This shows that Yahoo search is not only an excellent search engine, but also greatly stimulates people's interest in Internet browsing.
Customers can browse news on the Yahoo search page to find information they are interested in, and can also send email and contact information, forming a large number of fixed customer groups. These are the potential value of Yahoo search.
Netscape continues to rise in the market, which also drives the enthusiasm of institutional investors to increase step by step. The institutions that participated in Netscape's only IPO more than a year ago have lost investment opportunities, especially Citibank.
Green.
Now, everyone on Wall Street is eagerly looking at Yahoo!, waiting for the opening of the first round of IPO financing and the opportunity to formally participate.
With the company's heavy investment and vigorous promotion, Yahoo's search engine has become more complete, has higher search efficiency, faster response speed, and even better performance.
At the same time, Yahoo Search has signed cooperation agreements with major news media in the United States and the world, and invested heavily in expanding the content of news pages. This effort has achieved remarkable results, and customer stickiness has greatly increased.
As one of the largest shareholders and founders, in order to maximize profits, Wang Yaocheng is not in a hurry to list Yahoo. He will conduct three rounds of IPO financing to use the money for corporate development and obtain a higher listing valuation.
There is a huge difference in corporate valuation between having 20 million loyal users and having 200 million loyal users, even a fool would do the math.
Of course Wang Yaocheng is not stupid. He has always been very aggressive in making money in the European and American markets, leaving no room for error.