<h4>Chapter 717: Chapter 718: Spective Mindset</h4>
[Chapter 718: Spective Mindset]
Throughout May, Eric and Chris were busy working on Firefly Investment Company''s acquisition of a stake in the telmunications operator, Sprint.
Both parties had reached a rough agreement on the transaction in early May, with Sprint nning to issue 400 million shares of stock to Firefly Investment for a capital injection of $1.32 billion. After the deal wasplete, Sprint would increase its total share capital to 4 billion shares, with Firefly Investment owning 10% and securing two seats on Sprint''s board of directors. If this deal seeded, Sprint would likely adopt Quam''s CDMA technology, thanks to the push from Firefly Investment.
However, the process was far from over once they drafted the deal. Though the barriers to entry in themunications industry were gradually loosening, getting a foothold in such a tightly regted sector required navigating throughyers of approval.
Firefly and Sprint first needed to submit their n to the Federal Trade Commission (FTC) for antitrust review. Along with owning Quam, which was involved in the research and development of mobilemunication technology, Firefly Investment also held controlling shares in Nokia, a manufacturer of mobilemunication base stations and terminal equipment. If they sessfully acquired a stake in Sprint, they would essentially have a grip on the entire mobilemunication industry chain, drawing strong suspicions of monopolistic intentions.
If this had been ten years prior, the FTC would have immediately rejected this transaction. However, in recent years, the federal government continued to ease legal restrictions on the telmunications sector, giving this transaction a possibility of approval.
After Eric and Chris attended several FTC hearings regarding the deal and engaged in behind-the-scenes lobbying, by the end of May, the FTC finally approved the transaction.
While dealing with the FTC, Firefly Investment and Sprint also submitted relevant applications to the Securities and Exchange Commission (SEC) and the Federal Communications Commission (FCC). With the FTC''s unpredictable approval obtained, the remaining two agencies were much simpler to navigate. Within a week of the FTC''s approval, both the SEC and FCC also granted their approval for the deal.
...
On May 26, the signing ceremony for Firefly Investment and Sprint took ce at the Sprint Group headquarters in Manhattan.
At the press conference following the signing, senior executives from both Firefly Investment and Sprint publicly announced that Sprint would coborate deeply with Quam to build a nationwide mobilemunicationwork utilizing CDMA technology.
Just a month earlier, Verizon had joined the CDMA camp after securing $300 million in targeted bond financing from Firefly Investment. Now, with Sprint -- holding nearly half of the A and B ss mobilemunication licenses -- announcing its entry into the CDMA arena, it marked the resolution of disputes over mobilemunication technology standards in the United States. CDMA technology not only escaped being entirely sidelined but also captured more than half of the U.S. mobilemunication market.
As soon as the conference ended, Quam''s stock price began to surge, skyrocketing by 8% during trading hours to close at $31.5 per share,fortably above the $30 mark. Compared to approximately $17 per share at the end of the previous year, Quam''s market cap had increased by 85% in just six months, making it only a matter of time before it doubled.
...
"I remember thest time I was in San Diego, Quam''smunications equipment manufacturing nt was just starting to select a location. They wouldn''t be able to scale production until at least the end of the year," Eric mused. "Although Sprintmitted to using CDMA technology, they can''t wait six months, so they''ve decided to temporarily implement a GSMwork in the Washington area. Additionally, Quam initially nned to partner with Sony to build the factory, but I vetoed that n. If we''re going to coborate, it should definitely be with Nokia. This is a prime opportunity for Nokia to enter the U.S. market. Before we took control of Nokia in 1991, Quam had already granted Nokia aplete set of CDMA technology licenses. While Nokia focused on GSM development, they do have some foundation in that area and can provide a number of management personnel for Quam''s manufacturing facility."
The next day was Saturday. After a busy Friday, many tasks had finally concluded, and Chris brought Emily to East Hampton.
However, the two quickly retreated to Eric''s study to discuss business. Naturally, the conversation started with Quam. Chris understood very well that Eric''s recent strategic moves werergely aimed at benefiting Quam.
Leaning back in his chair, Eric listened to Chris and replied, "When ites to GSM and CDMA, I''d think that for the time being neither side could effectively push the other out of the market. Therefore, the best route is actually the integration of both technologies. It''s simr to this DVD format dispute; the two major DVD technology standard camps were very smart about not wasting another decade fighting over R+ and R-, choosing instead to support each other."
It had been a few years since the DVD standard was established, and Hollywood had been doing everything to dy theunch of DVDs due to concerns over the cheaper cost of DVD piracy.
However, it was no longer possible to dy further. Following the experience with the Sony Betamaxwsuit, Hollywood could not rely on litigation to block the emergence of DVDs. It was expected that major DVD manufacturers would release DVD yers after the summer blockbuster season.
Chris, also informed on this topic, chimed in, "The standards held by the two DVD technology camps still belong to the same generation of technology, so supporting each other wouldn''t be difficult. But GSM and CDMA are twopletely different generations of technology standards. The integration will mostly be impossible."
Eric rified, "I''m not talking about integration at the operator level but rather at the terminal level. Nokia has GSM technology, Quam has CDMA technology, and both have significantly deep technical umtions in these standards. Therefore,unching phones that support both GSM and CDMAworks shouldn''t be hard at all."
Dual-mode and fullwork phones supporting multiplework standards were verymon inter years. In 1995, however, the new generation of digitalmunication technology was just beginning to be widespread. The major tech camps were fully focused on squeezing one another out of the market and had never considered coexistence or integration. Therefore, a multiworkpatible phone was a brand-new concept.
Chris''s eyes lit up. "Eric, that''s a brilliant idea! How about we hold a conference call tomorrow with Jorma Oll and Irwin Jacobs to discuss this? A phone that can support both GSM and CDMAworks might not have a huge market in Europe, but in North America, where GSM and CDMA coexist, there''s definitely potential!"
"Go ahead and arrange it. <i>Jurassic Park 2</i> is releasing on June 2, and I might be able to stay in New York for another week," Eric replied. He was also nning to have an in-depth discussion with Nokia''s CEO, Jorma Oll, soon.
Nokia was one of the first manufacturers to bet on GSM technology, which was key to its rapid rise in recent years. While it didn''t monopolize CDMA patents like Quam, Nokia had the most GSM-rted patents among major telmunications equipment manufacturers.
Months ago, when news surfaced that Firefly Investment was acquiring shares in Quam, Jorma Oll expressed confusion over Eric''s strategies in emails. He believed that blocking Quam''s CDMA technology would better serve Nokia''s interests. Now, Eric not only supported CDMA technology but also captured half of the mobilemunication market in the U.S., which surely stirred some tension, even if Jorma''s public reaction remained calm.
Although Eric had exined the intentions behind his actions over the phone and via email, moremunication would surely be beneficial.
Only through maintaining open dialogue and understanding each other''s intentions could Ericfortably delegate the management of his enterprises. This would free him up for other pursuits.
Chris habitually pulled out a small notebook from his shirt pocket to jot down this matter seriously before turning back to Eric. "Once we settle this, I think we should discuss Yahoo."
"I''ve been in contact with Ian and the others, and I have a good grasp of their general thoughts," Eric nodded.
The employee stock option n was set to expire this year, and Firefly Investment''s team began evaluating the performance of Yahoo''s senior management to determine their stock rewards.
Originally, Eric nned to initiate Yahoo''s IPO after this stock incentive program ended. However, recently, the top executives unanimously expressed the desire for Eric to dy Yahoo''s IPO. Their reasoning was quite sound. The capital market was overly profit-driven, and once Yahoo went public, it would face performance pressures, undermining its current strategy of cautious, steady growth.
After repeated persuading from Yahoo''s management, Eric began to reconsider this matter.
A few years back, Eric had originally intended to take Yahoo public in 1995, aiming to cash in on the rapidly inting Inte bubble. Once his Yahoo stocks moved past the lockup period, he hoped to a substantial sum as Yahoo''s stock price soared.
In hindsight, Eric''s n had a very obvious spective mindset, subconsciously focusing on cashing out rather than nurturing Yahoo''s growth.
Through these years of reflection, Eric recognized that if he maintained such a mindset, his career would inevitably reach a bottleneck at some point in the future.
Seeing Eric lost in thought, Chris asked, "So, Eric, what are you thinking now?"
"I suppose you agree with their idea, right?" Eric smiled, countering his question.
Chris nodded candidly. "The capital markets are currently very favorable toward Inte investments. So, I believe if we dy going public for a few years until Yahoo has a clearer profitability outlook, we can certainly reap greater rewards."
Eric recalled the timeline from his previous reality, where the Nasdaq index began to soar in 1998, skyrocketing from just over 1,000 points to over 5,000 within two years.
If Yahoo went public after 1998, the funds gathered in the initial public offering would have unquestionably been several times those avable now. However, under a stringent financial regtory system, that money would predominantly be allocated to Yahoo''s own development rather thanpletely belonging to Eric. While there were ways to transfer some of those funds, doing so carried legal risks. It certainly paled against the safety of simply offloading personal shares.
Cash out, cash out, cash out...
Eric repeated the word in his mind, suddenly realizing that he wasn''tcking in money anymore -- no matter how much he cashed out, it would still go towards investment.
This sudden rity brought Eric a sense of enlightenment. He turned to Chris and said, "Let''s do it this way; we''ll dy the IPO n, but in any case, we''ll aim toplete the IPO before our contract with Microsoft goes into effect."
"Of course," Chris chuckled, relieved, that if Eric had insisted otherwise, he wouldn''t have known how to persuade him. "Speaking of which, Microsoft''s Windows 95 is set tounch in August. I assume you''ve already started using this system, right? Microsoft''s stock has been on the risetely; the market seems very optimistic about this new operating system."
While Microsoft confirmed that Windows 95 wouldunch inte August, several testing versions had already been released, and piracy of copies had spread widely outside the U.S.
Eric most certainly used this now-familiar operating system, stating, "I feel this system could allow Microsoft to monopolize the operating system market, which likely means we''re going to be butting heads with them in theing years. Microsoft has firmly established its dominance in the operating system market. They will undoubtedly look to prate the Inte market now. I can''t even confirm whether Bill Gates might forcibly tear up our agreement; after all, Microsoft may not want to wait until 1999."
"I feel Microsoft has already begun to show signs of restlessness," Chris replied with a smile. "Steve called me a few days ago, mentioning that Microsoft had reached out to him, hoping he would leave Yahoo to join their uing Inte division."
The Steve Chris referred to was Steve Mitnick, who was responsible for Yahoo''s technical department and a good friend of Chris from college. In Eric''s view, of Yahoo''s top management -- Ian Gurner, Jeff Locke, Steve Mitnick, and Tina Brown -- Steve Mitnick was the most critical for Yahoo because he oversaw the core technical R&D for most of Yahoo''s major Inte products. If he were poached, Yahoo would undoubtedly face a protracted period of turmoil.
Thus, this news shocked Eric, leading him to instinctively ask, "Really?"
Chris nodded. Seeing Eric''s worried expression, he added with a smile, "But you really don''t have to worry. I know Steve''s character very well. Since he called me, he surely isn''t going to leave Yahoo."
Eric couldn''tpletely set his worries aside, asking, "What about the others?"
*****
/Sayonara816.