Hollywood Hunter

A few days after Valentine's Day, a piece of explosive news that spread quickly is undoubtedly the large-scale employee stock ownership plan of the Internet industry giant Eaglet.

This matter has been the target of many media attention before, and most of the relevant news believes that Simon Westeros may reduce the equity rewards that should be paid as much as possible. When the huge equity distribution plan, which accounted for 25% of Eaglet’s total equity and reached 25 billion U.S. dollars, was announced, the reward quota that far exceeded the industry's expectations was a surprise.

25 billion US dollars, which has surpassed the entire wealth of many traditional rich people. Once it is fully realized, it will undoubtedly create hundreds of billionaires and millionaires.

Suddenly offering so many shares as a reward, is Simon Westero going crazy again?

Hundreds of media reporters from all over the world quickly gathered in San Francisco because of this news, and more and more insiders got the news.

In addition to the gossip, a news item officially confirmed by Igreat finally made the public feel that things are a little normal: the employee stock ownership plan with a total value of 25 billion US dollars is not wrong, but this batch of stocks is definitely not Unconditionally freely distributed to the current 25,000 employees of Yigrete worldwide, but accompanied by various restrictive clauses.

Simply put, the more rewards you get, the more restraint you are.

The four most watched Eagles, Tim Berners Lee, Jeff Bezos, Carol Butts and Alice Ferguson, are said to want to get the total promised in their contract For a 17% stock share, a new five-year employment contract must be signed first.

Because the original contract has not yet expired, some of the reward shares of the three will be postponed until they are fulfilled during the next five years, and they still have strict performance growth indicators. Not only that, but with these shares, the four people will also be subject to many restrictions in their future insistence on cashing out.

If you forcibly resign during the next contract period, you will have to return a large part of the stock.

The Big Four have already accounted for most of the employee stock ownership plan. However, although only 8% of the remaining stocks for other management and ordinary employees remain, the total value is still as high as 8 billion US dollars. According to Eaglet’s current total staff size of 25,000, it is equivalent to $320,000 per person.

At this stage, the demand for talent in Silicon Valley is very hungry. The average annual salary has rapidly increased to 80,000 US dollars, and the average bonus of 320,000 US dollars is equivalent to the salary of many programmers in 4 years.

What's more, the distribution of this part of the shares will of course not be evenly apportioned. Most people can only get a small amount of shares symbolically, and more of them are low-priced subscriptions rather than direct free rewards. The focus of the incentive this time is on those management and technical cores who have made more contributions to Eaglet. Many of these people will be billionaires and millionaires.

There is also a key prerequisite: most employees participating in the reward and subscription plan need to sign a competition agreement for at least three years.

Many products of Eaglet are easy to imitate and copy, at least on the surface.

As the wave of new technology becomes more and more turbulent, other capitals that want to enter the Internet industry often first target Eaglet, which has formed a number of sustainable business models, and recruit people from Eaglet to form a team. Is it a portal, search engine, social networking site, or online community, etc. If you want to copy these business models, you can achieve half the result with half the effort.

In recent years, the most troublesome problem for Eaglet has been the continuous loss of a large number of employees under the tireless movement of competitors.

As long as this large-scale employee shareholding plan is completed, and relying on extensive competition agreement restrictions, it will no longer be easy for other companies to dig a foothold from Igreat for at least the next three years.

For the rapidly changing new technology field, even if some employees insist on leaving their jobs and are restricted by the competition agreement to no longer engage in related occupations within the specified period, then, after the competition agreement expires, most of the very formal skills and experience at this time will be Outdated.

Such a period of time is enough for Yigrete to completely consolidate its own industry advantages and leave most of its potential competitors far away.

In general, with Eaglet’s huge valuation of 100 billion U.S. dollars, Simon Westeros, in addition to the Big Four’s contract, can maintain this company at least three times with just $8 billion in stocks. The industry advantage over the years is still relatively cost-effective.

You know, in February, as one of the three technology giants at the core of the Westeros system, Cisco's market value has easily exceeded US$150 billion and went straight to US$200 billion.

The development momentum and monopoly pattern are no less than that of Cisco's Eaglet, whose IPO valuation has reached 100 billion. After listing, it may also be a 200 billion US dollar super giant. Compared to this benefit, even the entire $25 billion reward plan is actually worth it.

Amidst the excitement, there is no shortage of doubts.

For most of the general public, everyone’s biggest doubt is, is Eaglet really worth $100 billion?

Many reporters started to dig deeper into this issue.

There will be news soon.

The East Coast paper media giant "New York Times" made a special topic on the Sunday edition of February 19th. The core information involved was more than the US$100 billion valuation of Igreat, which surprised the industry: Eaglet’s 1994 revenue will reach a terrifying tens of billions of dollars.

Compared to Eaglet’s establishment period, it has generated tens of billions of dollars in revenue from scratch in five years. The public with a little idea about this should understand how terrible this data is.

At this stage, most of the world's top 500 companies with a long history have less than $10 billion in revenue. In fact, according to last year's data, Fortune magazine’s Fortune 500 companies have a revenue threshold of only 1.8 billion U.S. dollars. Among the 500 companies around the world, only 97 have a revenue of 10 billion U.S. dollars.

Yigrete has achieved goals that many companies have been unable to achieve for several generations after only more than five years of establishment. How can this be a miracle!

Even in the industry of new technology, take Microsoft, which has gradually overlapped many businesses with Igreat.

Microsoft's fiscal year is from July of the previous year to June of the following year.

In the 1994 fiscal year from July 1993 to June 1994, Microsoft, which had been established for 20 years, had annual revenue of only US$5.63 billion and annual net profit of US$1.29 billion.

In this data, the revenue part is only equivalent to Igreat’s revenue of US$5.41 billion in a natural year in 1993. Moreover, Microsoft’s revenue growth in fiscal year 1994 was only 31%, which exceeded 10 billion in comparison. In 1994 with dollar revenue, Igreat's annual growth rate still reached a terrifying 100% level.

On the other hand, according to the data released at the beginning of last year, Eaglet’s loss in 1993 was US$390 million, which seems to be far from comparable to Microsoft’s net profit of more than US$1 billion. However, everyone understands this. It's just because Eaglet, who is in the high-speed growth period, needs to make huge investment in various aspects.

A closer look at Eaglet’s business is not difficult to find. Except for the e-commerce business that has been burning money and has suffered serious losses, the other major cores, software business, data center business, advertising business, etc., have very high gross profit margins. Taken together, if Igreat is dedicated to pursuing profit, the company's net profit margin can at least reach a level comparable to that of Microsoft.

According to Microsoft’s 23% net profit margin in the last fiscal year, Eaglet’s tens of billions of dollars in revenue can theoretically easily achieve a net profit of more than 2 billion dollars.

The reason why I haven't made profits for the time being is mainly because Igreat is more concerned about the growth of the company, so it has made huge investments in technology research and development, product marketing, etc. regardless of cost.

Even so, according to the analysis of the "New York Times" article, Igreat’s speed of making money has obviously exceeded the speed of spending money. Compared with 1993, 1994 just passed, regardless of whether it is necessary to make a copy for IPO considerations. With beautiful financial reports, Eaglet is likely to have a large profit balance.

When the "New York Times" article was published, it achieved tens of billions of dollars in revenue in five years, even some professional financial media had to question this.

However, the fact seems to be true.

The key to the matter is monopoly!

Eaglet Corporation, together with the Big Three of Cisco and AOL, created the Internet industry together in the past five years, and quickly introduced the United States and the world into the information age.

There is no doubt about this.

Because of its early advantages, Cisco has almost monopolized the professional router and switch market, and AOL's market share in the ISP field is far more than even the old giants such as AT&T. As for Eaglet, it not only has a stronger monopoly advantage, but also covers a wider range of fields. .

First of all, Eaglet has almost mastered all basic Internet tools and software. Because of the perfect patent barriers built in advance, it can be said that there is no other branch at the moment.

With the pricing power, the price is naturally high.

The wave of new technology is so turbulent, as long as you want to enter this field, as long as you want to create a website, you can't do without a series of basic tools and software of Eaglet. This is the ideal "toll bridge" in Buffett's vision. , And is the only toll bridge facing the global market.

Moreover, as Eaglet has transformed its software business from a traditional sell-out to a brand new ‘rent-collecting’ subscription model, piracy damage has been largely avoided.

Even if it’s a website hiding in the Horn of Africa, do you use pirated software? Just check the subscription information. If you don’t subscribe to the genuine software, first of all, your website can’t appear in any of the companies under Eaglet. Among these recommendation systems, secondly, they may also face litigation from Igreat at any time.

Therefore, as long as it is an enterprise that wants to make a difference in the Internet field, it must pay to the ‘toll bridge’ of Eaglet.

In the past few years, there have been hundreds of thousands of large and small Internet companies worldwide, but these companies have unknowingly contributed billions of dollars in revenue to Eaglet’s software business.

Immediately, there was an advertising business.

With the mature business model in Simon’s memory, there is no need to fumble too much. In a few years, Eaglet’s advertising business has been perfectly divided into portal advertising, social network advertising, search engine advertising and advertising alliances. Four parts of the plan.

Because of the interface monopoly advantage that IE browser brings to Eaglet, companies outside the Westeros system who want to get more network traffic can only advertise to Eaglet.

This is actually equivalent to another ‘toll bridge’.

Moreover, with the rapid development of the Internet, online advertisers are no longer limited to new technology companies. Traditional industries have also begun to advertise in this field.

In 1993, Eaglet’s advertising revenue has reached 1.15 billion US dollars. With the boiling level of the entire industry in 1994, the growth of this business will only become more crazy.

The media roughly estimated that only the two businesses of software and advertising, the total revenue in 1994 may exceed the annual revenue of Igreat in 1993.

For those who know the inside story, this is actually true.

In addition to the two cores of software and advertising, Eaglet also owns YWS data center business, e-commerce business, application store business, online game business and even professional solutions and technology licensing business, etc., which generally have leading Strong advantages of other competitors in the industry.

Not to mention, it's just an online game. Last year, "Happy Farm", which was popular all over the world, had brought a huge revenue of US$250 million to the operator of Yigrete within 7 months of its launch by the end of 1994. The development cost of this game is only 1.5 million US dollars, and the return on investment is more than one hundred times.

There is also the data center business.

With the continuous digging of industry competitors in the past few years, Yigrete’s cloud computing technology solutions have gradually flowed out. However, other competitors cannot have the various advantages of Yigrete’s development of cloud computing in the short term, and can only be positioned at Relatively traditional data center business.

In order to confuse the police opponents, Yigrete's YWS also positions itself in the data center (IDC) business.

In the past year, Eaglet has successively invested in the construction of as many as 11 large-scale data centers with an investment of more than 100 million US dollars in North America, Europe and Asia. This aspect far exceeds the Amazon online mall and is limited to seven large-scale logistics distribution in North America. Input from the center.

It is conceivable that if there is not enough interest to drive it, Eaglet will not do it at all.

You should know that although many of them are still under construction, they are only the parts that have been activated, and there are too many redundancy relative to the needs of Yigrete itself.

Because the entry barrier for the data center business is relatively low, not to mention the core cloud computing technology of Yigrete, this field is not exclusive to Yigrete. In the past few years, established giants such as IBM, Hewlett-Packard and even Microsoft have entered the IDC field one after another, and many small and medium-sized independent IDC companies have opened.

According to some statistics in the industry, Yigrete’s YWS business has a market share of only about 50%.

However, it is only about 50%, compared with the industry's overall market size of nearly 5 billion US dollars in the past year, it is also possible to imagine the revenue volume of Igreat in this business.

The final e-commerce.

As Amazon has opened seven large logistics distribution centers across the United States, Eaglet’s e-commerce business is clearly in a state of excellence compared to other peers who have entered the market. A lot of information about e-commerce in Simon's memory has also made Alice Ferguson's e-commerce business less detours.

Although e-commerce has caused the biggest loss to Yigrete, seeing the rapid growth in recent years, no one will doubt the huge commercial potential of this field.

It can be said that if each of Yigrete's existing businesses is done separately, it is difficult to achieve too many scales. However, the concentration of all these businesses immediately gave Eaglet a strong synergy and monopoly advantage.

When other companies of the same type are still struggling to explore business models or do everything possible to pursue more market share, relying on their own absolute advantages and a series of mature business models in the memory of the boss of Simon, Yigrete easily integrates Most of the proceeds are in the bag. Among them, the data center business with the lowest share has reached more than 50% of the share, online advertising revenue has reached more than 90%, and the basic tool software is planned to be 100% exclusive.

When the entire industry burned money in order to carve up the rapidly rising piece of the Internet, a large part of these burned funds fell into the pocket of Eaglet.

Such a monopolistic industry oligarch with a revenue of tens of billions of dollars and still showing ultra-high growth, with a valuation of 100 billion US dollars, is definitely not much.