[Chapter 16: Negotiation]
After touring around the garage with a group of bigwigs, John, Zack and the Yahoo! executives were led into a modest small conference room on the side. With five people from John's side, it was barely enough to seat everyone, the space was indeed tight.
"Being here really brings back memories. We all started out just like this," Intel's president Andy Grove said with a smile as everyone took their seats.
Intel's first two presidents were actually the founders themselves, but Grove was the very first employee Intel hired. He was known for his meticulous and serious work ethic.
"Yeah, I remember working under you for a while back then," John Doerr, founder of Kleiner Perkins Caufield & Byers (KPCB), chimed in.
Before founding KPCB, John Doerr had worked at Intel for a while and was among Intel's earliest employees -- sort of part of the company's "founding fathers."
Therefore, Doerr and Grove were well acquainted. The group exchanged some casual banter; they all knew each other quite well.
For example, KPCB was one of the earliest venture capital firms to invest in America Online. Among major companies, ownership could be quite intricate. Two seemingly unrelated companies might actually share common financial backers or have overlapping investors, creating a tight-knit network behind the scenes.
...
"This isn't the time for reminiscing. We all came here for the same purpose, and since everyone's so busy, let's make good use of this rare meeting. Let Jerry and his team fill us in on Yahoo," interrupted McGovern from IDG, cutting off the nostalgia session.
Among the bigwigs present, only McGovern and Valentine had the status to interrupt such exchanges. Things mattered a lot in terms of seniority, even in the business environment. When Doerr and Grove were catching up, others like Keith from America Online, Michael Moritz, and Tim from Draper Fisher Jurvetson, who came from a family that founded DFJ, wouldn't interrupt. Only McGovern and Valentine could do so.
"Alright then, I guess we're getting old. Looking at Yahoo's situation reminds me of when we started out. Let's hear more about Yahoo," Grove said with a chuckle.
With that, all the bigwigs turned their attention to Jerry Yang and the Yahoo team.
---
"Thank you all for your interest in Yahoo and for coming today," Jerry Yang expressed gratitude on behalf of Yahoo.
There was no denying Jerry had a natural business acumen. Though a bit nervous at first, after some small talk, his tension vanished, and he carried himself quite naturally.
"Please take a look at the business plan we've prepared for you. We believe the future of Yahoo will yield results that everyone here will be pleased with."
Jerry then explained the state of the internet industry and its future. Notably, John's role in this had to be mentioned. As someone from the future with unparalleled internet knowledge, John had spent the past few days hyping up Jerry and the Yahoo team.
He provided a detailed report on Yahoo's current status and went over their fundraising plans and post-funding objectives.
For example, their global expansion plan: starting with Canada, Australia, then Europe, followed by Asia. The strategy aimed to make Yahoo the world's premier web portal, capturing global attention.
Plans included setting up branch offices in Europe, Canada, and Australia; launching multiple language versions; and even establishing country-specific localized websites.
In hindsight, this multi-site strategy seems simple, but back then it was highly forward-thinking -- much of it was John's idea.
He also covered new features planned for Yahoo, such as free email accounts and VIP premium email services.
Later, he introduced the founding team and touched on emerging concepts like entry-level portals and new media, which impressed the bigwigs.
...
"Gentlemen, Yahoo has already become the best portal site worldwide. This is a rare chance for all of us.
Before our competitors even realize what's happening, we have to seize this moment swiftly and capture the global market.
With hundreds of millions of internet users worldwide and our advantageous resources, are we going to pass this up?
If Yahoo becomes the number one choice for internet users everywhere, then with this vast and growing market, Yahoo will certainly be a top player.
I can even say with confidence that as the internet rises, traditional print media -- newspapers, for example -- will sharply decline. This is the inevitable challenge the media will face. The internet is a force of nature; unstoppable and destined to change the world."
As Jerry spoke more passionately, the executives across the table grew visibly more excited.
They understood the internet's unstoppable momentum, and controlling the brightest star like Yahoo! meant having a voice in the future internet economy.
"That's why, even though Yahoo is profitable, we are aggressively seeking funding. With sufficient capital to expand globally, Yahoo will become a world-class company, even a symbol of the internet era.
Our goal is to raise $100 million for 20% equity to realize our global strategy.
If all goes well, in 1995, we'll complete our strategic expansions in Canada, Australia, and Europe while preparing for Asia-Pacific.
In 1996, we'll start the Asia-Pacific rollout, followed by gradual expansion into Latin and South America.
If all goes according to plan, by late 1996, we can expect Yahoo to make its Nasdaq debut."
...
In front of these big players, Jerry laid all his cards on the table. There were no secrets.
Just a small indication from Yahoo was enough for these executives to guess the future plans because they operated in global markets.
The bigwigs were already moved. The only remaining question was how much to invest.
After all, these were the elite of the business world. They knew Yahoo's strengths and weaknesses well. With the right funding, Yahoo's future was clear. Why would they pass up on an opportunity like this?
"Alright, why don't you all take a break outside while we discuss things here?" Grove finally proposed.
Jerry Yang and his team left the small conference room, leaving the bigwigs to negotiate -- really, just to figure out how to split up the shares.
---
The conference room was made of glass, and outside, people could clearly see the top executives negotiating inside, even though they couldn't hear the details.
As Jerry and his four companions exited, Yahoo's employees nervously glanced over. Jerry's group reassured them, then greeted the assistants of the bigwigs, before settling down to relax and chat.
They kept an eye on the glass room, where the executives were getting more animated, apparently arguing among themselves.
"Guys, do you think they're fighting over who gets a bigger share of that 20%?" John joked, watching the livelier scene inside.
"Definitely a possibility," Jerry laughed in response.
"Ha ha..."
Perhaps amused by that idea, the five of them laughed together, catching the attention of others nearby.
*****
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