lerbook Chapter 232 The Dawn of Silicon Valley
Chapter 232 The Dawn of Silicon Valley
3:10 AM Pacific Time, Silicon Valley.
Ling Yun was awakened from his sleep by the ringing of the telephone by his bedside. He reached for the receiver.
"Mr. Ling, this is Fiona. I just saw the news that Microsoft acquired ICQ for 430 million."
Ling Yun sat up and glanced at the digital clock on the bedside table: "Tell me the specific news."
"The press release just came out. Microsoft is acquiring ICQ in an all-cash deal, with the transaction expected to close within 60 days. The news says Microsoft will integrate ICQ into the Windows platform."
"Understood. Notify the core team to come to the company for a meeting at seven o'clock."
"clear."
After hanging up the phone, Ling Yun didn't lie down immediately. He turned on the bedside lamp, picked up his laptop from the bedside table, turned it on, and connected to the dial-up network (which was very slow). While waiting, he got up, walked to the window, and drew back the curtains.
It was pitch black outside, with only the lights of cars on the distant highway resembling a broken galaxy.
The computer finally connected to the internet. He opened his browser and logged onto CNN's business channel. The headline had been updated: "Microsoft spends a whopping $430 million to acquire instant messaging star ICQ."
He opened the news, quickly browsed it, and focused on the price and the acquiring party's statement.
Four hundred and thirty million.
He remembered clearly that, according to his timeline, ICQ was acquired by AOL in June 1998 for $2.87 million. At that time, ICQ had nearly ten million users, with over a million new users added each month. Now, in January 1998, ICQ had just over three million users, yet Microsoft had spent an additional $143 million.
Why?
His rise to prominence through "Star Language" put pressure on Microsoft. Also, a month ago, he "leaked" the news that "Microsoft was secretly negotiating to acquire ICQ" to AOL's top management through a hidden intermediary.
AOL wasn't initially that interested in ICQ, but when they heard that Microsoft wanted to buy it, they immediately became alert. They couldn't let Microsoft easily gain access to this rapidly growing communication gateway, so they entered the market and raised the price.
Everything went as he expected.
As a gateway company to the Internet, AOL would not allow Microsoft to enter the market so easily.
However, the final price was higher than he had anticipated. It seems that Microsoft's determination... or rather, its fear, was greater than he had estimated.
He went back to the bed, but instead of lying down, he picked up his coat, put it on, went to the living room, turned on the TV, and tuned to CNN.
The morning financial news is playing on television. Behind the anchor, a large screen displays the logos of Microsoft and ICQ.
"Early this morning, tech giant Microsoft announced a shocking acquisition, purchasing instant messaging software ICQ for $430 million in cash. This price far exceeded industry observers' expectations and marks a further expansion of Microsoft's ambitions in the internet communications field. We're connecting with our reporter in Redmond..."
Ling Yun turned off the TV sound, leaving only the screen on. He walked to the coffee machine and made himself a cup of espresso.
Holding his coffee, he stood in front of the living room's floor-to-ceiling window, looking out at the still-sleeping Silicon Valley.
He knew that from today onward, the entire industry's attention would be focused on the instant messaging sector. Microsoft would invest heavily in promoting ICQ and integrating resources. AOL would likely accelerate the development of its own messaging tool (AIM). Other large companies, Yahoo, and even Apple, would probably follow suit.
Xingyu will face unprecedented competitive pressure.
But this also presents an opportunity. When the waters are muddied, everyone's actions become distorted. Microsoft wasted money; post-acquisition integration is never easy, especially with small teams exhibiting significant cultural differences. The $430 million price tag will also raise market expectations for ICQ, putting Microsoft under immense pressure to deliver results quickly.
Xingyu, backed by the Xingchen gaming platform and the growing Xingchen system ecosystem, has a unique environment.
With this opportunity, Xingyu can proceed with a round of financing as planned.
He took a sip of coffee; it was bitter, but invigorating.
The sky outside the window began to turn a grayish-white.
At seven o'clock in the morning, the editorial offices of several newspapers in San Francisco were already busy.
Jenkins, the technology editor of the San Francisco Chronicle, with a piece of bread in his mouth, stared at the news flashes from various news agencies on his computer screen, quickly typing out topic selection instructions into the internal editorial system:
Headline: Microsoft's expensive gamble: Was the $4.3 million acquisition of ICQ worth it?
Angle: 1. Price analysis (comparing with similar acquisitions);
2. Strategic Intent (Countering Star Technology's Star Language);
3. Industry impact (the instant messaging sector is heating up);
4. User feedback (Will ICQ users accept this?).
Assignments: Anna (Pricing and Strategy), Bob (Industry and Competition), Claire (Users and Markets).
Kevin, a reporter for the San Jose Mercury News (who has covered StarCraft competitions), is interviewing a venture capitalist by phone.
"This price is insane," the investor said on the phone. "ICQ's user value is severely overestimated. Microsoft is clearly scared, afraid that Xingyu will steal the future. But spending over 400 million to buy a product from a small Israeli team... the integration risk is extremely high. Historically, the success rate of large companies acquiring small teams is less than 30%."
"Do you think Microsoft's real competitor is StarCraft?" Kevin asked.
"It's obvious that Star Language's growth curve is very steep due to its reliance on the game platform. Moreover, Star Technology has a complete ecosystem strategy, including operating systems, browsers, games, communications... Microsoft must interrupt this momentum. Acquiring ICQ is the fastest way to directly gain a user base. But speed often means high cost, and it may lead to indigestion."
Kevin quickly took notes.
In New York, at the Wall Street Journal's offices, an analysis article is nearing completion, titled "Microsoft's Defensive Acquisition: $430 Million to Build a Defense for Instant Messaging." The article provides a detailed comparison of data from ICQ and Xingyu, citing the opinions of several analysts. Its core conclusion is that the acquisition price, significantly higher than fair value, highlights Microsoft's anxiety about emerging competitors and signifies a new phase in its struggle for control of the internet gateway.
In London, a BBC World News financial commentator said in a morning broadcast: "...this is not just a simple technology acquisition, but a high-stakes gamble on the future of the internet. Microsoft is using its checkbook to make up for its lagging pace of innovation."
Tokyo, Nikkei's English-language headline: "Microsoft's $430M ICQ Buy Signals Messaging War Heats Up."
Global media interpretations are largely similar: expensive, defensive, fighting against the stars, instant communication warfare.