bioinnovel Chapter 231 The Negotiation at Dawn
Chapter 231 The Negotiation at Dawn
It was 1:20 a.m. in the penthouse suite of the Four Seasons Hotel in New York.
The atmosphere in the room was tense. Two groups of people sat on either side of the long table: on the left was a four-person team led by Microsoft CFO Greg Maffei, including two investment bankers (Goldman Sachs) and a legal counsel; on the right was a three-person team led by AOL CEO Steve Case, including AOL Senior Vice President of Corporate Development Barry Schuler and a lawyer.
Empty coffee cups, crumpled papers, and printed financial models were scattered on the table, and the trash can was overflowing with lunch boxes.
The negotiations have been going on for eleven hours, with only one focus: the acquisition price of ICQ.
ICQ’s two founders—Visger, Vardy, and Goldfinger—along with their financial advisor (Morgan Stanley), sat at the end of the long table, their faces expressionless, but subtle twitches at the corners of their eyes betrayed their tension.
If it weren't for the financial advisor's insistence, they certainly wouldn't have put the acquisition negotiation teams of Microsoft and AOL together. Wouldn't that be a blatant humiliation? Only Morgan Stanley has the confidence to make the two companies compete so honestly in terms of price, without daring to engage in any underhanded tactics.
Ma Fei's phone vibrated. He glanced down at the screen and saw a message from Ballmer: "Final licensing price: 4.2 million. If it exceeds that, we're giving up."
Ma Fei slammed her phone face down on the table, cleared her throat, and said in a hoarse voice, "Steve, we're giving you our final offer: $4.2 million, all in cash. Fifty percent will be paid within fifteen business days of signing, and the remainder will be paid after the technical audit and user data migration are completed."
After he finished speaking, he looked at Steve Case of AOL across the street.
Case didn't respond immediately. He picked up the water bottle in front of him, slowly unscrewed it, and took a sip. His fingers tapped lightly on the bottle, a steady rhythm. Barry Schuler leaned close to his ear and whispered something.
Case nodded, put down the water bottle, and leaned forward: "4.25 million."
Ma Fei's lips twitched slightly. The Goldman Sachs investment banker next to him immediately pressed a few buttons on his calculator, then leaned over and whispered, "Five million more than our upper limit, but considering the strategic value..."
Mafi raised his hand to stop him, then turned to the founders of ICQ: "Gentlemen, we need five minutes."
Visger nodded: "Please go ahead."
Ma Fei got up, led her people into the inner bedroom of the suite, and closed the door.
In the bedroom, Ma Fei took out her phone and dialed Ballmer's number.
Seattle, 1:25 a.m.
Ballmer sat in his study, the main light off, only the lamplight illuminating several documents spread out on the table. One was a user growth curve forecast for ICQ (latest data: 305 million registered users, monthly active rate 68%), another was a data estimate for Xingchen Technology's "Xingyu" instant messaging tool (launched more than two months ago, registered users have exceeded 400 million, with rapid growth relying on the Xingchen gaming platform and the StarCraft player community), and the third was an internal strategic analysis report titled "The Strategic Value of Instant Messaging as an Internet Gateway and Microsoft's Response".
The call was connected.
"Steve, AOL has bid 425 million," Ma Fei said in a low voice. "Should we continue?"
Ballmer didn't answer immediately. He looked at a passage circled in red in the report: "Instant messaging tools have extremely high user stickiness and social networking effects, and may become another core Internet gateway after browsers. Losing this gateway means losing the initiative in the future of social and real-time communication."
He recalled Jim Olson's report from last week: "StarTalk is rapidly building relationships through its gaming platform and social sharing. Their users' average daily online time has already surpassed that of ICQ. If we cannot quickly acquire a user base of the same scale, we may need to pay ten times the cost in the future."
He recalled the Wall Street Journal analysis he had read yesterday: "Microsoft's dominance in the operating system market is facing a flanking challenge from StarCraft Technologies in niche areas (games, instant messaging). If Microsoft cannot establish a presence in these emerging battlegrounds, the foundation of its empire may be gradually eroded."
"Steve?" Mafi urged on the other end of the phone.
Ballmer closed his eyes, took a deep breath, and then opened them: "Four hundred and thirty million, that's the bottom line. Tell them this is our final offer, no bargaining. If AOL raises any more, we're out."
"clear."
The phone hangs up.
Ballmer put down his phone, his hands gripping the table, his knuckles turning white from the force. $430 million to acquire an instant messaging software that was less than two years old, had only thirty-odd employees, and virtually no revenue (relying on Google and a few value-added services).
He recalled the ICQ valuation report given by the internal evaluation team three months ago: between $150 million and $200 million, based on user growth potential and technology assets.
It has more than doubled now, all because AOL suddenly appeared out of nowhere.
Because they couldn't afford to lose to that Chinese kid, Microsoft had no choice but to acquire ICQ.
He grabbed the water glass on the table, intending to take a sip, only to find it empty. He slammed the glass back down, the glass bottom striking the wooden tabletop with a dull thud.
Mafi walked out of the bedroom and returned to the negotiating table. He didn't sit down; he stood, his gaze sweeping over the ICQ founder and the AOL team.
"Microsoft's final offer: $430 million, all other terms unchanged." His voice was calm, but his pace was slightly faster than usual. "This is our final offer. We require ICQ to provide a clear response within five minutes regarding whether they accept it. If you choose to continue negotiations with other parties, Microsoft will withdraw immediately and will not restart the acquisition in the future."
The room was deathly silent.
Wissger, Vardi, and Goldfinger exchanged glances. Vardi's Adam's apple bobbed, and Goldfinger's fingers tapped unconsciously on the table.
A Morgan Stanley advisor leaned close to Wissger's ear and whispered a few words, to which Wissger nodded slightly.
He looked at Case from AOL: "Steve, you guys?"
Case leaned back in his chair, his arms crossed over his chest. He paused for a few seconds, then slowly shook his head, offering a regretful smile: "We congratulate Microsoft on AOL's exit."
Barry Schuler let out a barely perceptible sigh of relief.
Visger stood up and extended his hand to Mafie: "Deal."
At 2:10 a.m., lawyers for both sides began drafting the Letter of Intent (LOI). Key terms: Microsoft would acquire 100% of ICQ for $430 million in cash; an initial payment of $2.15 million would be made upon signing; the remaining balance would be paid upon completion of the transaction (expected within 60 days); and the founding team would remain in the company for at least 12 months.
At 3 a.m., the LOI draft was basically completed, and both parties signed it.
At 4 a.m., the Microsoft PR team and the ICQ PR team simultaneously started preparing press releases and media briefings.
At 6:00 a.m. (New York time), the press release was sent via the business news lines of the Associated Press, Reuters, and Bloomberg.
Headline: "Microsoft Announces Acquisition of Instant Messaging Leader ICQ for $430 Million"
The main text briefly introduces ICQ's user base and technical features, as well as how Microsoft will integrate ICQ into its internet service strategy after the acquisition, thereby enhancing the communication and social experience on the Windows platform.
At 6:05 a.m., this news began appearing on the homepages of major financial news websites.