dognovel Chapter 120 Valuation
Chapter 120 Valuation
Chapter 120 Valuation
"I would like to know about Google's development plans, or rather, your plans."
The questioner was a representative from Bear Stearns; he was tapping his fingers lightly on the table, his eyes filled with inquiry.
Everyone present held their breath, waiting for Ernst's answer with the same question in mind.
After completing its funding round, how will Google spend the money, and what will its next strategic move be?
Of course, there's also the GG business that Ernst has been avoiding.
Despite their verbal skepticism, everyone knew in their hearts that Ernst must have his own meticulous plan, a plan that, like a magnet, firmly attracted their curiosity.
Look at Playboy's soaring valuation. The "GG" moment at the Super Bowl is considered a marketing classic by countless people in the industry.
There's also the game promotion by Yuedong Company. Others might not understand, but those present knew that Yuedong Company had deployed a large number of ground promotion personnel—to put it bluntly, it was a carefully arranged network of shills.
Behind these textbook-worthy marketing cases, Ernst's influence is evident.
This is a true marketing master, a fact already widely acknowledged in the industry, so they wanted to know Ernst's GG plan for Google.
When asked a question by a Bear Stearns representative, Ernst's answer surprised everyone: "You're not qualified."
"You—" The Bear Stearns representative who had just asked the question pointed at Ernst, his lips trembling with anger.
When has Bear Stearns, one of the five major investment banks on Wall Street, ever been treated so rudely?
Ernst wasn't targeting him at all; the two had no grudges against each other.
It would be the same no matter who was in charge; these are all Google's trade secrets.
"Google's next development plans are an absolute trade secret. According to our internal predictions, once the plans are launched, it will be no less than creating another Google."
He paused, his gaze sweeping over everyone present, and continued, "And Google's future profit model, or rather, its GG business, will be something that will completely disrupt the industry's traditions."
"Apart from a few senior executives within Google, it's impossible for outsiders to know even a fraction of this."
Does Wall Street have any ethics? Ernst would rather believe pigs can fly.
If Google were to release its GG model, these representatives present could then use this plan to negotiate with internet companies like Yahoo, using it as leverage to discuss potential equity investments.
Many people in the room had their eyes light up. When Ernst said he would create another Google, many of them sat up straight in excitement, clearly attracted by this very tempting prospect.
Although Ernst's narration was rather rushed, the story was indeed captivating enough to scratch the itch of these people and speak to their hearts.
Don't be fooled by the fact that Yahoo and Netscape have successfully gone public and proven their value with their market capitalization.
Google has not yet been tested by the market or certified by shareholders, but both Wall Street and the United States now regard Google as the number one company in the Internet industry.
Recreating another Google? The possibilities are simply too vast.
As it turns out, Wall Street capital, no matter how many times it hears the same story, will always be drawn to it.
Henry Paulson shifted his posture, placing his hands flat on the conference table, and asked, "So, Mr. Garfield, what is your valuation of Google's Series B funding round?"
Without the slightest hesitation, Ernst casually raised four fingers: "Pre-investment valuation of $40 billion, diluting approximately 15% of the shares."
They're asking for an exorbitant amount again. How long has it been since Google's last funding round? Less than three months, and the market value has already doubled?
Everyone was about to retort, accusing Ernst of dreaming. But Ernst's next words made them swallow back the words that were on the tip of their tongues.
"Google will IPO by next year at the latest, and there will be no more rounds of financing for Google."
This caused quite a stir; the once quiet meeting room instantly transformed into a bustling marketplace, with everyone whispering and discussing amongst themselves, their faces filled with surprise and excitement.
Going public, isn't this the moment they invested in Google?
Given Google's current momentum, these Wall Street tycoons firmly believe that if Google's market value doesn't double when it goes public, it would be a disservice to their bloodsucker lies.
Among the Wall Street capital representatives present, apart from those from Lehman Brothers, Morgan Stanley, and Merrill Lynch who remained calm and composed with relatively low emotional fluctuations, every other institution was eager to get on Google's fast track.
The reason these three companies remained relatively calm was not because they were pessimistic about Google, but because they knew very well that they wouldn't get a piece of the pie in this round of funding.
In the conventional logic of corporate financing, unless there is a huge gap between the valuation of the company by investors, or too few institutions are optimistic about it, resulting in a situation where there are too many wolves and too few sheep, few companies are willing to let one institution participate in multiple rounds of financing, so as to avoid the institution holding too much shares and affecting the company's control.
Google obviously doesn't have this problem; its valuation is determined by Ernst, so it doesn't matter who invests.
Moreover, Google is such a juicy and tender piece of meat that all the wolves want to pounce and take a bite—a classic case of too many wolves and too little meat.
As for Goldman Sachs' participation in this second round of financing, the fact that today's meeting was held at Goldman Sachs is entirely due to the deal reached between Goldman Sachs and Ernst.
Goldman Sachs took the lead in agreeing to Wall Street's non-involvement in Google's operations and promised to help Google resolve all the troubles in the financing process, in exchange for the right to co-invest in this round of financing.
As for how Goldman Sachs persuaded other shareholders on Wall Street, that's not Ernst's concern.
After a brief period of commotion, Blackstone's representative was the first to regain his composure. He cleared his throat and drew everyone's attention back to the issue of financing and valuation.
"But we still can't deny whether Google's valuation is too high?"
"It's not high at all; I even think the valuation is too low."
The valuation set by Enster was not just a casual remark, but a result of careful consideration.
"Netscape's market capitalization is currently only $32 billion, while Yahoo's exceeds $23 billion. I think Google's valuation of $40 billion is a reasonable price."
Because of Google's early launch and its high valuation during its first round of financing, the entire internet industry was set on a preemptive surge in popularity.
Netscape's market share has been declining since Internet Explorer began partnering with Google, but even so, its market value has remained at around $32 billion.
At this point in history, Netscape's market capitalization was only around $25 billion.
Yahoo has benefited greatly from this internet boom, with its market value exceeding $23 billion.
Without the emergence of Google and Ernst, Yahoo's market value would have peaked at $28 billion by the end of this year, following its original trajectory.
But given the current situation, Ernst believes that Yahoo's market value will definitely exceed $30 billion this year, and he wouldn't be surprised if it surpasses Netscape's current market value of $32 billion.
"How many daily visitors does Yahoo get? Just 4500 million. But Google? It gets over 1.174 million daily visitors, more than double that of Yahoo."
Ernst's voice wasn't loud, but it carried an undeniable power.
This also made it clear to everyone that Ernst was not going to make any concessions.
John Reid and Ernst became acquainted through a series of encounters, and after several meetings, he began to admire Ernst more and more.
Although Citigroup missed out on Google's first round of funding, it is determined to secure this second round.
"I think it's fine," John Reed broke the silence first.
"Citigroup is willing to lead this round of funding for Google." As soon as John Reed finished speaking, a barely perceptible hint of hatred flashed in the eyes of many people.
They originally wanted to try to negotiate a lower price, but unexpectedly, a traitor appeared within their ranks, disrupting their plans.
The atmosphere in the meeting room became delicate again, as if Google had fallen into the same passive situation it was in during its first round of funding.