After returning from Tasmania, Jennifer stayed in Melbourne for three more days before flying back to Los Angeles.
Across the entire Westeros system, if you counted only the companies directly held by Westeros, including the four core "women," plus Microsoft, Intel, Cisco, America Online, Nokia, and a long list of public and private firms, the total had already reached thirty-six, and it was still growing. Add the second- and third-tier subsidiaries beneath them, and the number became even more enormous.
Even though Simon delegated as much as possible, sheer volume meant the daily matters that still required his personal attention remained crushing and complicated.
In that sense, his assistant's role in Simon's business empire was essentially his eyes.
She ran an assistant office with six additional aides, constantly filtering and summarizing information from every company in the Westeros system before sending the essentials to Simon.
Simon stayed in Melbourne, overseeing the filming of Batman: The Dark Knight while also directing the entire Westeros system remotely.
In the early stages of growth, companies always seemed more vibrant, more full of life. The same was even more true for the Westeros system, which had expanded at a breakneck pace in recent years.
...
Florence.
Europe's continuing turmoil had not affected Italy much, but as a peninsula nation, Italy had always struggled to gain real weight in Europe, economically or politically.
Sophia Fache rarely cared about politics anyway. Lately, she had been focused on negotiations with the Gucci family.
Aldo Gucci, the last male member of Gucci's second generation, died last month at the age of eighty-five. Normally, that wouldn't matter.
Melisandre had already achieved absolute control of Gucci. No matter how the Gucci family fought among themselves, it was hard for them to meaningfully affect the brand anymore.
But the Gucci family's internal chaos was famous. Aldo Gucci had not arranged his affairs properly. He held onto his 12% stake until his final breath, then tossed it to his children at the very last moment.
With no family trust set up in advance, his children faced an inheritance tax they could not avoid.
Worse, they didn't have enough cash to pay it. Gucci's revival had been rapid, but Sophia had poured every spare dollar into expansion, and she had no intention of paying any dividends for years.
So the Gucci family had no choice but to sell that 12% stake.
With the Westeros system backing it, Melisandre was the most natural buyer. Sophia wanted those shares as well. If she could add that 12%, Melisandre's total holding in Gucci would reach 75%.
The problem was the price.
When Simon first acquired 63% of Gucci, the total outlay was $170 million. Now the Gucci family wanted $150 million for just 12%.
Even though outside valuations of Gucci kept climbing, Sophia could not accept that. After discussing it with Simon, Melisandre's ceiling was set at $100 million, so Sofia kept haggling.
With only 12%, they had no path to control, yet they insisted on such a high price. Besides Melisandre, they couldn't find a second buyer in the short term.
...
Helsinki.
After Nokia's mobile communications division came under Westeros, freed from the drag of its other assets and infused with $50 million, Jorma Ollila quickly launched R and D work on GSM-related phones and base station equipment.
Finland's direct border with the Soviet Union, plus Europe's year of turbulence, had everyone on edge, but life went on.
In the first half of the year, Finland began building Europe's, and arguably the world's, first GSM pilot network. Siemens was leading it, but Nokia naturally participated as well.
Even so, GSM still needed at least another year before it could be commercially deployed.
Nokia's mobile communications division could not abandon the foundation it had built over many years. In the first half of the year, it continued releasing two analog phones, and sales were decent.
New York.
While Simon and Jennifer were spending their time together in the Tasmania cabin, James Rebould officially signed an equity investment agreement with Qualcomm, a wireless communications technology company headquartered in San Diego.
Over the past two years, Qualcomm had completed an initial patent layout for CDMA technology and gained recognition from AT and T, Bell Pacific, Motorola, and others. It had also established cooperation with a Korean telecom company, continuously pulling funding from multiple sides to support R and D for commercial CDMA.
However, after several rounds of funding from AT and T and others were quickly burned through, Qualcomm recently faced another cash crunch.
If Qualcomm did not accept Westeros's investment, its balance sheet, with less than $200,000 on hand, might not even cover employee salaries in August.
Westeros's aggressive posture in taking control of America Online and Cisco made Qualcomm's leadership wary, but in the short term, Qualcomm also couldn't find another backer who could immediately write a check that large.
After negotiation, Westeros paid $35 million to acquire 4 million common shares, a 20% stake in Qualcomm's total shares at that time.
However, Westeros did not receive the kind of protective provisions it had in other holdings, terms that would preserve its ownership percentage through future fundraising or an IPO. After bringing Westeros in, Qualcomm was still free to continue pushing for an IPO without restriction.
San Francisco.
As Ygritte's portal and Web technology spread further, even though July wasn't over yet, America Online's user growth had already surpassed all of June. This month's Web access users were projected to rise by 55,000 to 60,000.
To keep pace with market expansion, both Ygritte and America Online could only describe their situation in one phrase.
Money was burning.
Ygritte was in full burn mode. From browser software and server tools to portal technologies all the way down to the development of the underlying JavaScript language, R and D costs were massive, while sustainable revenue remained far away.
Simon originally wanted software sales to subsidize the portal. In the short term, that clearly wasn't realistic.
Carol Bartz, who ran the software side, had a forceful personality. Even though software installs were already bringing in revenue, not only did she show no intention of subsidizing the portal, she also carved out $10 million from Simon's $20 million injection for her own division's growth.
On Jeff Bezos's side, with the remaining $10 million, keeping the portal team alive and building two new data centers would likely only carry them to the end of August.
Still, Bezos had already started exploring advertising. He successfully secured ad orders from IBM and Microsoft. The amounts were small, only $800,000 combined. And he even refused Bill Gates's suggestion to increase ad spending in exchange for giving priority to developing a Windows-platform browser.
That willingness to ignore short-term advantage made Simon very satisfied.
To help users get new features quickly, Ygritte's IE browser was updated multiple times almost every month.
For customers, if a browser on one platform was consistently updated faster than on another, they would naturally develop a preference without even noticing.
Windows was rising, but Apple and traditional Unix machines were still mainstream. Even though Westeros was a major Microsoft shareholder, in order to push the Web as fast as possible and avoid opening opportunities for competitors, IE could not tilt toward Microsoft for now.
As for the competition and friction between Bezos and Bartz, Simon did not interfere much.
A bit of internal competition was good for growth.
And right now, it still wasn't time for software to subsidize the portal. If that day came, Simon would not indulge Carol Bartz's stubbornness.
Also, at the end of July, America Online's hundred internet cafes officially opened for business.
With strong early marketing, a relaxed environment that felt no worse than a coffee shop, and the public's curiosity about the internet, they drew crowds immediately.
But just as predicted, those hundred cafes essentially didn't make money.
At $3 an hour, twenty computers per cafe, open from 7 a.m. to 11 p.m. Even at full theoretical capacity, monthly revenue would only be $28,800 per location, and in reality, half that was already considered good.
And the break-even point per location was right around $15,000.
To make real profit, just as expected, they would have to rely on drinks and snacks, or sell a bit of merchandise on the side.
Even with slim profit prospects, America Online didn't plan to abandon the business.
Because Simon's true goal was still to spread Web technology.
Under the plan, after a period of operational learning, AOL would expand the cafe business through franchising. Franchisees would pay a fee to AOL and receive a complete package of technical and operational support. They could also run more flexibly, add more machines, raise hourly prices, or develop extra services. With that, turning a profit would be relatively easy.
...
Los Angeles.
With Simon away, Daenerys Entertainment still moved like a young animal in spring, full of life and hunger.
The first-half 1990 financial numbers had already been compiled. Management hadn't released full details, but both insiders and the media had already learned the rough picture.
In the first six months of this year, Pretty Woman alone, with its unexpectedly massive box office, made Daenerys Entertainment a fortune.
But even so, the profits Daenerys gained from Pretty Woman's $160-plus million box office in the first half, a film that could carry a studio's whole year, were still less than one tenth of Daenerys Entertainment's pre-tax profit for its first two quarters.
Because the true monster was last winter's hit.
Just in the first half of the year, Batman filled Daenerys's pockets through box office and merchandise alike.
And beyond that, ever since late 1988, Daenerys Entertainment's accumulated library of hits, the Scream series, Dead Poets Society, Rain Man, The Sixth Sense, The Bodyguard, Flight Over Innocence, and many more, continued pouring money into Daenerys through overseas theatrical, VHS, and television licensing in the first half of 1990.
Daenerys Television's hit reality shows and scripted series brought steady income as well.
More than that, under Nancy Brill's consumer products division, the gaming and music businesses also earned heavily thanks to Daenerys's slate.
In March, Blizzard Studio released a fighting-game Teenage Mutant Ninja Turtles title. It didn't match last year's role-playing version in blockbuster status, but in three months it still sold more than one million cartridges, with total sales expected to exceed two million.
Because they had secured Nintendo's preferential allocation, allowing them to release five games per year under special terms, besides the fighting Turtles, Blizzard would release an RPG sequel later this year. EA, which Daenerys had invested in, would also provide three more titles for Nintendo's platform.
Putting all of this together, Daenerys Entertainment's after-tax net profit for the first half of 1990 had already reached $573 million. With the success of summer releases like Ghost and Teenage Mutant Ninja Turtles, the full-year net profit would likely at least double.
When the financial report came out, Amy Pascal sometimes felt dazed.
She had signed on in March 1987, with a contract running through March 1991, a total of four years.
Based on the first-half performance and her compensation terms from the start, the total compensation she could receive this year, cash plus stock awards, might exceed $100 million.
One hundred million dollars.
If someone had told her a few years ago she could become a hundred-million-dollar woman, she would have called it nonsense.
Hollywood executives, aside from a handful of the very top figures, Steve Ross, Lew Wasserman, a few others who sat in power for decades and built companies to enormous scale, didn't actually get paid that much. Most people worked themselves to the bone for what was basically hardship pay.
Even Steve Ross's total compensation last year was only around $36 million, and that alone was enough to get him shredded by the media and shareholders.
Anyone truly inside Hollywood knew the real money flowed to only a tiny cluster of top-tier stars.
As for executives, their power looked huge, but the restraints were endless. Most of the time they had to swallow investor anger and bend over backward for stars. It was nothing like the glamour outsiders imagined.
Yet she, Amy Pascal, a woman, in an industry where women were routinely looked down on and objectified, could make $100 million in a year.
In her daze, Amy sometimes even had the pathetic thought.
What was she supposed to spend that kind of money on?
While the Westeros system expanded in full bloom, time silently rolled over the last days of July 1990.
In the final week of July, the Middle East, already tense to the breaking point, grew even more ominous.
Using Kuwait's "theft" of Iraqi oil as a pretext, Iraq demanded Kuwait forgive its debts and pay enormous compensation. When Kuwait refused, Iraq's most elite Republican Guard tank and armored divisions massed on the Iraq-Kuwait border.
Not wanting Arab brothers to turn weapons on each other, Egypt's President Mubarak visited Iraq to plead Kuwait's case. He left humiliated, accomplishing nothing.
Sensing the threat as well, other Middle Eastern nations staged a massive joint military exercise with the U.S. Persian Gulf Fleet on July 24, hoping to deter Saddam's regime. At the same time, international crude prices surged sharply in the last week of July.
In just one week, oil shot up from the $13 low to nearly $20.
On Monday, July 23, Cersei Capital closed out all short contracts. Even that alone cost them a meaningful chunk of profit, because oil had already begun rising.
And when oil prices exploded in the final week of July, the long positions that had been bleeding massive losses flipped to profit in only a few days.
What followed was a flood of profit so large it made people dizzy.