Chapter 358: The Impending Storm

After returning from Tasmania, Jennifer stayed in Melbourne for three more days before returning to Los Angeles.

In the entire Westeros system, counting only the enterprises directly held by the Westeros Corporation, including the core 'four women', as well as Microsoft, Intel, Cisco, America Online, Nokia, and a large number of other listed or unlisted companies of various types, the total number already reached 36, and was still increasing. The number of second and third-tier subsidiaries was even more enormous.

Simon, though delegating as much as possible, found the number of enterprises so large that the daily business needing his personal attention remained extremely heavy and complex.

His female assistant now effectively acted as his eyes within the commercial empire of Simon, managing an office with six other assistants, constantly filtering and summarizing information from all companies within the Westeros system for Simon to handle.

Simon continued to stay in Melbourne, following up on the filming of "Batman: The Dark Knight" and remotely controlling the operations of the entire Westeros system.

The enterprises seemed more vibrant in their early stages of development, a trend particularly evident in the rapidly expanding Westeros system in recent years.

Florence.

Europe's ongoing turmoil had not affected Italy. However, situated on the peninsula, this country has always struggled to wield significant economic or political influence in Europe.

Sophia rarely concerned herself with politics, lately engaging in negotiations with the Gucci family.

Aldo Gucci, the last male member of Gucci's second generation, passed away last month at the age of 85. This in itself was not significant.

The Melisandre Company had already achieved absolute control over Gucci. Regardless of the family's internal disputes, it was nearly impossible for them to significantly influence the luxury brand anymore.

However, Aldo Gucci had not arranged his affairs before passing, holding onto his 12% share of Gucci stock until the last second of his life, then abruptly left it to his children.

Without a family trust set up in advance, Aldo Gucci's children now faced unavoidable inheritance tax issues.

More seriously, none of Aldo Gucci's children could muster enough cash to pay the inheritance taxes. Although Gucci's recovery was swift, Sophia had allocated all of the company's spare funds to corporate expansion, with no dividends planned for shareholders in the coming years.

Thus, the Gucci family had no choice but to sell this 12% share.

Backed by the Westeros system, Melisandre naturally became the most suitable candidate to take over the shares. Sophia also intended to acquire this stake, which would increase Melisandre's holding in Gucci to 75%.

However, compared to the initial expenditure of $170 million for acquiring a 63% stake in Gucci by Simon, the Gucci family's asking price of $150 million for their 12% share was exorbitant. Even though the external valuation of Gucci continued to rise, Sophia could not accept such a price. After discussing with Simon, Melisandre's bidding ceiling was set at $100 million, and Sophia continued to haggle with the Gucci family over the price.

With only a 12% stake and no chance of influencing control over Gucci, the price was still too high, and the Gucci family would struggle to find another buyer in the short term.

Helsinki.

After Nokia's mobile communications division came under the umbrella of Westeros Corporation, free from the burden of other assets and with an injection of $50 million, Jorma Ollila swiftly initiated the development of mobile phones and base station equipment related to GSM technology.

Directly bordering the Soviet Union and amidst the turbulence in Europe over the past year, all of Finland was somewhat apprehensive, yet life had to go on.

Earlier this year, Finland had already begun building the first GSM pilot network in Europe, or perhaps the world. Though led by Germany's Siemens Group, Nokia also played an indispensable role.

However, GSM would need at least another year before it could be commercially deployed.

Nokia's mobile communications division could not completely discard its many years of accumulated expertise, continuing to launch two models of analog signal mobile phones in the first half of the year, with sales still quite decent.

New York.

While Simon and his female assistant spent quality time in a cabin in Tasmania, James Reubold formally signed an equity participation agreement with Qualcomm, headquartered in San Diego.

In the last two years, Qualcomm had initially completed the patent layout for CMDA technology, earning the recognition of companies like AT&T, Bell Atlantic, Motorola, and also establishing partnerships with Korean telecommunications firms, continuously receiving investments for the commercial development of CDMA technology.

However, after several rounds of funding from companies like AT&T, which were quickly depleted, Qualcomm recently faced another shortage of funds.

Without the participation of Westeros Corporation, Qualcomm's funds on hand, less than $200,000, might not even cover employee wages for August.

Westeros Corporation had previously demonstrated its assert

iveness in acquiring control of America Online and Cisco, causing Qualcomm's management considerable apprehension. However, in the short term, Qualcomm would struggle to find another major investor who could immediately provide substantial funds.

After some bargaining, Westeros Corporation acquired 4 million ordinary shares of Qualcomm for $35 million, representing 20% of Qualcomm's total capital at that time.

However, unlike other investments, Westeros Corporation did not secure a clause that would allow it to maintain its percentage of ownership in subsequent fundraising or IPO processes. After accepting Westeros Corporation's participation, Qualcomm was still free to proceed with IPO efforts without restrictions.

San Francisco.

As the adoption of the Internet and World Wide Web technologies further spread, although July was not over yet, America Online's user growth had already exceeded the entire month of June, with an expected increase of 55,000 to 60,000 web access subscribers this month.

To keep pace with the market expansion, both Ingrid and America Online could only be described as 'burning money'.

Ingrid was in a state of cash burn, from browser software, server software, and portal website technologies to the development of the JavaScript language at the base level, the investment in research and development was substantial, with sustainable revenue yet far off.

Simon had originally hoped to subsidize the portal website department through software sales, a goal that seemed unrealistic in the short term.

Carol Bartz, who managed the software department, had a strong personality. Although she had begun earning revenue from browser software installations, she had no intention of subsidizing the portal website department. Instead, she diverted $10 million from the $20 million Simon had invested to develop the software department further.

Jeff Bezos, on the other hand, was left with the remaining $10 million to maintain the portal website team and build two new data centers, which could only sustain operations until the end of August.

Fortunately, Jeff Bezos had already started exploring the advertising business, successfully securing two advertising orders from IBM and Microsoft, though small in total, amounting to $800,000. He also rejected Gates' offer to increase advertising investment in exchange for priority development of Windows platform browser software.

Simon was very pleased with this vision that did not count immediate gains and losses.

To allow users to access the latest features as quickly as possible, Ingrid's IE browser was updated several times a month.

For customers, if a browser on one platform is updated more timely than another, a preference naturally develops over time.

However, although the Windows operating system was beginning to rise, Apple and traditional Unix computers were still mainstream in those years. Although Westeros Corporation was a major shareholder in Microsoft, to promote the World Wide Web technology as quickly as possible and avoid giving competitors any advantage, the IE browser could not yet favor Microsoft.

As for the competition and disagreements between Jeff Bezos and Carol Bartz, Simon did not intervene too much.

Appropriate internal competition is also beneficial for corporate development.

Moreover, it was not yet time for the software department to subsidize the portal website. If that day did come, Simon would not indulge Carol Bartz's whims.

Additionally, by the end of July, 100 internet cafes opened by America Online had officially started operations.

The excellent initial marketing, the leisurely environment of the internet cafes comparable to cafes, and the public's curiosity about the internet attracted a large number of customers.

However, as initially expected, these 100 internet cafes were basically not profitable.

At $3 per hour, with each cafe equipped with 20 computers and operating from 7 AM to 11 PM, the theoretical monthly revenue, even if a cafe was operating at full capacity, was only $28,800. Achieving half of that would be considered good.

Conveniently, the break-even point for each internet cafe was around $15,000.

To be profitable, as initially anticipated, they could only rely on beverages, snacks, or perhaps some peripherals.

Although there was little hope for profits from these 100 internet cafes, America Online had no plans to abandon this venture.

After all, Simon's fundamental goal was still to promote the World Wide Web technology.

Planned in the strategy, after a period of trial operation, America Online intended to expand the internet cafe industry through a franchising approach. Franchisees only needed to pay a certain franchise fee to America Online to receive a full set of technology and support plans, and they could adopt a relatively flexible business model, possibly increasing the number of computers, raising internet prices, or developing additional services, making it relatively easy to achieve profitability.

Los Angeles.

In Simon's absence, Daenerys Entertainment remained as lively as a young beast in spring.

The financial data for the first half of 1990 had been compiled. Although the management had not disclosed detailed figures, both the company's internal and external media had already gleaned a rough estimate.

In the first six months of the year, just one unexpectedly blockbuster movie, "Pretty Woman," had earned Daenerys Entertainment a substantial sum.

However, the revenue from "Pretty

 Woman," which alone could support a film company's annual performance with over $160 million in box office earnings, accounted for less than one-tenth of Daenerys Entertainment's pre-tax profit scale for the first two quarters.

It was last year's blockbuster "Batman: The Moment of War," which earned a fortune for Daenerys Entertainment in the first half of the year through both box office and peripherals.

Moreover, since the end of 1988, a slew of box office hits accumulated by Daenerys Entertainment, including "Scream," "Dead Poets Society," "Rain Man," "The Sixth Sense," "The Bodyguard," "Flying Over Innocence," and others, continued to generate substantial income for Daenerys Entertainment in the first half of 1990 through overseas theaters, video markets, and television broadcasting platforms.

The series of popular reality shows and other television projects produced by Daenerys Television also provided the company with stable revenue.

Not only that, but under Nancy Brill's management, Daenerys Entertainment's consumer goods department, including gaming and music businesses, also profited handsomely from the company's various projects.

In March, Blizzard Studio released a fighting version of the "Teenage Mutant Ninja Turtles" video game. Although it did not reach the sales levels of last year's role-playing version, the game cartridge sold over 1 million units in three months, with total sales expected to exceed 2 million units.

Thanks to receiving a special quota from Nintendo, allowing five games to be released annually at a discounted rate, besides the fighting version of "Teenage Mutant Ninja Turtles," Blizzard Studio planned to launch a role-playing sequel in the second half of the year. Daenerys Entertainment's stake in EA would also contribute three additional games to the Nintendo console platform.

All these combined, just for the first half of 1990, Daenerys Entertainment's after-tax net profit already reached $573 million. With the success of summer movies like "Ghost" and "Teenage Mutant Ninja Turtles," the annual net profit was expected to at least double.

After the financial report was released, Amy Pascal felt somewhat dazed during this period.

She had officially signed on in March 1987, with a contract lasting until March 1991, totaling four years.

Based on the company's performance in the first half of the year and her original compensation terms, her earnings this year, combining cash and stock rewards, were likely to exceed $100 million.

$100 million.

If someone had told her a few years ago that she could become a billionaire, Amy would have thought they were talking nonsense.

In Hollywood, aside from top executives like Steve Ross and Lou Wasserman, who had long held high positions and grown their businesses to substantial sizes, others' salaries were not very high. Everyone was busy earning a hard living.

Even Steve Ross, who received a total compensation of over $36 million last year, was already criticized by the media and shareholders as being too excessive.

Those truly in Hollywood knew that the industry's most lucrative earnings belonged to only a small group of top stars.

As for the executive circle, although they seemed to wield great power, they faced numerous constraints. Most of the time, they had to endure investors' frustrations and go to great lengths to accommodate stars, not nearly as glamorous as outsiders imagined.

Yet, Amy Pascal, a woman in an industry where females were generally discriminated against and objectified, could earn $100 million in a year.

In her moments of reverie, Amy occasionally felt pathetically unsure about how to spend such a large sum of money.

Amidst the vigorous expansion of the Westeros system, time silently rolled past the last few days of July 1990.

In the last week of July, the already tense situation in the Middle East seemed even more imminent.

Using Kuwait's 'theft' of Iraqi oil as a pretext and demanding that Kuwait forgive debts and provide substantial compensation without success, Iraq's most elite Republican Guard armored divisions had already positioned themselves on the Iraq-Kuwait border.

Not wanting Arab brothers to clash, Egyptian President Mubarak took the initiative to visit Iraq on behalf of Kuwait, only to leave in embarrassment after being snubbed.

Feeling similarly threatened, Middle Eastern countries held large-scale joint military exercises with the U.S. Persian Gulf fleet on July 24th, attempting to deter Saddam's administration. Concurrently, international oil prices rapidly soared in the last week of July.

In just one week, prices had climbed from a low of $13 to nearly $20 per barrel.

Cersei Capital had cleared all short positions on Monday, July 23rd, just as oil prices began to rise, thereby missing out on a significant profit.

By the last week of July, as oil prices surged, what had been substantial losses in long positions turned into profits within a few days, followed by staggering income.

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