Earlier, in order to push Ted Turner and Steve Case out of Time Warner, Barry Meyer had slapped the label of "incompetent" on them. He blamed Time Warner's failures in the internet sector entirely on their heads and even issued a public statement declaring that Time Warner had officially abandoned the internet business. So—
And now they wanted to invest in the internet again?
If that happened, in the eyes of outsiders, it would look like pure double-dealing, a self-inflicted slap to the face.
The logic was simple:
Two months ago, you yourself said you were done with the internet.
Two months later, you're betting on an internet startup?
What is that supposed to mean?
Does it mean you're fickle?
Or does it mean everything you did earlier was just to eliminate internal rivals?
Once that news got out, the group's shareholders would definitely start questioning Barry Meyer and the others' decisions.
And being criticized by shareholders would actually be the smaller problem.
The real issue was this:
Time Warner was a publicly listed company. If management contradicted itself about business direction within such a short period of time, the entire group would almost certainly be investigated by the U.S. Securities and Exchange Commission.
At the time, the future of the internet industry was still unclear, and its perceived value was lower than that of entertainment media. So when Time Warner announced that it was officially abandoning the internet business, the investment market would shift it from the "internet entertainment media" category to the "traditional entertainment media" category. After investors had already stripped away the internet-related discount affecting Time Warner's stock price, if Time Warner then quietly went back to investing in the internet—
Wasn't that wanting everything at once?
"I don't want to take the debuff of the investment market's distrust of the internet!"
"But I also want to explore the internet as an emerging future!"
How was that any different from lending companies wrapping themselves in tech buzzwords, calling themselves "internet finance," and gorging on tech-sector premiums?
Right?
In a mature capital market, that kind of behavior was outright stock price manipulation.
Sure, plenty of people did things like this in real life. For example, Facebook in the future: Zuckerberg forcibly rebranded Facebook as Meta just to grab the valuation of the metaverse. But tricks like that could only be pulled once in the short term.
Do it too often, and it became knowingly breaking the law and challenging regulators.
So, once Time Warner had publicly stated that it had "de-internetized" itself, it could no longer continue embracing the internet, even if, at that moment, they felt that YouTube had great potential.
"Okay, I understand what the investment department means," Barry Meyer said. His thoughts churned, then he smiled. "They're saying it's not good for us to invest in YouTube?"
"That's indeed the situation right now."
A slight nod acknowledged the group's dilemma.
Just as Nathan Bailey thought the boss was about to give up on YouTube entirely, Barry Meyer suddenly changed the subject. "By the way, have Yahoo and Verizon made their positions clear? Have their offers reached the ceiling?"
"Uh—yes—"
The abrupt shift caught Nathan Bailey off guard for a moment.
After a brief pause to catch up with his boss's rhythm, he continued. "Both of them have offered $21.5 billion for AOL, and neither is willing to go any higher."
"Carl Icahn said that, given the circumstances, their attitude is already quite good."
"He wants us to choose quickly and close the deal. The contract has to be signed before Christmas because he wants to exit."
In fact, as soon as Time Warner publicly announced its intention to sell AOL, inquiries had already come knocking. In total, five companies expressed interest in AOL:
Microsoft, Google, Yahoo, Verizon, and Comcast.
Since the first two and the last one were merely interested but didn't have a strong desire to acquire, once Yahoo and Verizon pushed their bids above $20 billion, those three decisively withdrew and pulled their offers.
After several rounds of bidding, Yahoo and Verizon both tacitly stopped at $21.5 billion.
So the current situation was this: as long as Time Warner embraced one of them, the deal could be finalized immediately.
But that embrace was not an easy choice.
It wasn't that the deal structures differed. Both planned to acquire AOL using 75 percent stock and 25 percent cash. The problem was that the nature of these two companies was different, and Time Warner's choice would send it down two very different development paths.
First, the path of choosing Verizon.
Verizon was the world's largest telecommunications company at the time, a company grounded in real, tangible operations.
Embracing a company like that meant Time Warner would completely abandon the internet business, not even brushing against it anymore.
Moreover, in the acquisition plan Verizon submitted to Time Warner, it clearly stated that the first thing it would do after buying AOL was to break it up and sell it off.
They would sell AOL's unused fiber-optic network to Google. This was the fiber infrastructure laid in advance during the rapid growth of the internet to better serve the influx of new users.
In everyday terms, this was called "dark fiber."
They would sell all of AOL's internet-related patents to Microsoft. Microsoft's dial-up services and portal services relied heavily on AOL patents.
They would sell the email service and portal to Yahoo, essentially selling off 20 million users in one go.
They would sell the call centers and data service centers to Comcast. Over 40 percent of customer service phone support in the U.S. was handled by AOL.
What Verizon wanted to keep was only AOL's operator services: dial-up and broadband.
And, well, this was actually the reason Microsoft, Google, and the others dropped out of the bidding.
They knew Verizon would carve AOL up completely, so they were all waiting to reap the biggest rewards at the lowest cost.
Once this reality was clear, Time Warner could no longer play games on the edge.
If one had to describe it—
Japan's SoftBank was just an investment company.
But for a long time, it had enjoyed internet dividends through Yahoo, and for a long time in the future, it would continue to enjoy internet dividends through Alibaba.
Now, the path of choosing Yahoo.
If embracing Verizon meant completely saying goodbye to the internet, choosing Yahoo meant Time Warner could still play the game of putting new wine in old bottles. If Yahoo's market value rose because of the AOL acquisition—
Wouldn't Time Warner then be able to continue embracing the emerging era?
Uh—
To be honest, these different paths gained by "embracing different sides" were just paper calculations. In real-world execution, they might amount to nothing more than beautiful illusions. But that was before.
Now—
If Time Warner sold AOL to Yahoo, it could openly invest in YouTube.
Because 75 percent of 21.5 billion was 16.125 billion.
After selling AOL to Yahoo, Time Warner would hold Yahoo stock worth $16.125 billion. As long as it still held a large amount of internet market exposure that it hadn't sold off, investing in internet companies wouldn't trigger an SEC investigation.
But—
"Nathan, do you think we can embrace Yahoo?" Barry Meyer asked.
"Uh—Mr. Meyer, with all due respect, this decision isn't a good one."
"Why?"
"Because—Yahoo as a company—just isn't good anymore."
Nathan Bailey thought for a moment, then said, "This is no longer the era of portal websites. The assets Yahoo prides itself on aren't very valuable anymore. As for search, although Yahoo stopped using Google in 2004 and built its own search engine, market share is like a snowball. If you roll it slower than others, you'll never catch up."
"Also, Yahoo's current user acquisition method is basically Yahoo Mail, but that—"
"—isn't working anymore either."
Nathan Bailey shook his head, his face full of disdain. "Yahoo Mail can't compete with Microsoft's email or Google's Gmail anymore. If they need to rely on acquiring AOL's email service just to fight Google and Microsoft, then their future is—painfully obvious."
"Mr. Meyer, I even think that if we sell AOL to Yahoo, when we eventually cash out and exit, we might actually lose money. This deal would be very unfavorable for us."
"Oh, Nathan—those words must never be heard by Jerry Yang," Barry Meyer laughed.
"Because he'd beat you to death."
Though Nathan Bailey's words were unpleasant, they were very close to Barry Meyer's own judgment.
He also felt that embracing Yahoo wasn't a good decision. So—
"Looks like we won't be able to embrace YouTube after all."
Barry Meyer felt a bit regretful.
However, just as he sighed lightly and prepared to reject the group's investment in YouTube, Nathan Bailey spoke again. "Mr. Meyer, personally, I think we actually can embrace YouTube."
"?"
Barry Meyer looked up in confusion.
Nathan Bailey met his gaze. "We have an ally. Isabella."
"Although Isabella has never invested in the internet so far, she should like the internet."
"Because she is a practitioner of the free culture that the internet era champions."
"Take her cartoon beaver, for example. We all know that character is extremely valuable, but after netizens went wild using it, she never tried to forcibly manage it. She even said at the premiere of Azkaban that as long as it wasn't for commercial use, she wouldn't interfere with ordinary people having fun. So—"
"What if we tell her about YouTube and see if she's willing to invest in this internet media platform?"
"If she's willing, okay, that's good news for us. If she controls this kind of media, isn't that basically the same as us controlling it? If YouTube's future really is bright, wouldn't negotiating an acquisition with her be easier than negotiating with others?"
"And then, once she holds Time Warner shares—well, you know."
Nathan Bailey blinked at his boss.
Then he added, "If she's unwilling to invest—"
"Personally, I don't think she would be unwilling."
"Because investing in a company like this wouldn't cost her much at all."
"And she's the kind of person willing to spend millions or tens of millions to help an ally."
"Hiss—"
Barry Meyer's eyes lit up.
He felt Nathan Bailey made a lot of sense.
If they couldn't control something themselves, let an ally control it.
And right now, they didn't even have to worry about betrayal.
Because—
They held plenty of dirt on each other.
"Oh, Nathan—young minds really do work better."
"Okay! Let's do it."
Barry Meyer leaned back in his chair with a smile. "Fly to New York and tell her about this in person."
"And tell her that if she's willing to invest, we can help her gather market intelligence and help her make an offer."
"She's pretty busy these days, isn't she—"
Since the boss had made his decision, Nathan Bailey acted decisively.
As he left the office, he had his assistant book his flight.
That afternoon, he boarded a plane to New York.
The next morning, during breakfast, he showed YouTube to Isabella—
And the video related to her, which had already surpassed one million views, surprised her greatly.
More than thirty thousand comments, with countless people checking in and leaving messages like "Isabella is so beautiful," left her genuinely astonished.
Uh—
It wasn't that she was surprised by the video's numbers.
Isabella knew she was the top star of the moment, so a video about her getting a million views within 24 hours?
That was only natural.
What truly surprised her was YouTube itself.
In her previous life, she didn't know how YouTube had become popular.
But now—
YouTube was feeding off her traffic?
That was interesting.
"So what does Barry mean?" Isabella asked with a smile. "Something like getting back in the headlines, he could've just called me, right?"
"Why did he specifically send you to New York?"
"Oh—because Mr. Meyer wants to know whether you're interested in this kind of website."
Nathan Bailey stated Barry Meyer's intentions very directly.
His words made Isabella narrow her eyes slightly. After a long moment, as he finished speaking, she smiled again.
"Get in touch with YouTube."
"Tell them I think their website is pretty fun, and that I'm interested in investing in them."
"And right now they've only accepted investment from Sequoia Capital, right? If that's the case, you should be able to get in touch with Sequoia, yes? Help me buy YouTube shares from them."
Isabella was, of course, interested in YouTube.
Because in her previous life, this thing went on to become the largest internet media platform in the world.
After internet television entered millions of households, YouTube's market share in the United States even climbed to number one in North America.
It crushed the old giants ABC, NBC, CBS, and FOX and pinned them to the ground.
So when something like this appeared, if Isabella said she didn't want it, that would be genuinely stupid.
Isabella's words made Nathan Bailey gesture an "okay."
After he took his leave, Isabella went back to work as well.
Makeup, wardrobe, waiting between takes. While Catherine, who was cosplaying as her assistant, suddenly bumped into her.
The unexpected nudge made Isabella tilt her head in confusion. Catherine said, "Don't you think you're spreading your career a bit too wide?"
"It's fine. I don't actually run things myself," Isabella understood what her sister meant. "Even if I don't understand the internet, I can hire someone who does to watch over the company, just like hiring Susie to handle Beaver Entertainment."
Her relaxed tone made Catherine raise an eyebrow.
Since her little sister herself didn't care about how big her steps were, Catherine didn't say anything more.
Instead, the reminder made Isabella smile. "Catherine."
"Mm?"
"If it really doesn't work out, why don't you go study computer science, then switch to law?"
"—"
The sudden "friendly suggestion" made Catherine roll her eyes hard.
She snorted at her sister, who was once again trying to turn her into a tool, and cursed, "Get lost!"
"Heehee—"
Isabella giggled.
But her feet didn't move an inch.
"I'm not going!"
"Hmph~"
Isabella actually didn't understand corporate management at all, and as for the internet—
She was really just a user.
She knew the internet was the future.
But if you really asked her to personally build and run a media website?
That was truly asking too much of her.
But none of that really mattered, right?
At this point in time, the internet was still an emerging industry, and startups in emerging industries were all about reckless growth.
So when it came to investing in YouTube, what Isabella was actually thinking was:
Hold part of YouTube's equity. Use her fame to drive traffic to YouTube. Sell YouTube to a major internet company, like Google or Microsoft. Secure board seats at those companies.
That's right.
Isabella had no intention of seriously running YouTube.
She just wanted to use it as a springboard into the internet industry.
As for why she didn't just invest directly?
She already had over two billion in cash on hand.
Same old saying—
Financial investment can only make you rich. Value investment is what gives you freedom.
And every value investment is a two-way selection. You think a company is good and want to invest in it? Then if you want to firmly control the right to speak, you have to let the other side see your value to them.
Maybe it was because she was extremely optimistic about YouTube. Or maybe it was simply that a strong ally meant she herself was stronger. Either way, after Nathan Bailey returned to California, matters related to investing in YouTube were quickly put on Barry Meyer's agenda.
Then—
Sequoia Capital's co-managing partner, Michael Moritz, felt his head buzzing.
"Uh—Mr. Bailey—"
"Mr. Moritz, just call me Nathan."
"Okay, Nathan. Then you can call me Michael. And—if I didn't mishear you, are you saying that Time Warner wants to buy from Sequoia Capital the YouTube shares we only acquired last month?"
"Yeah, Michael, you heard that right."
"Oh—pardon my bluntness—but don't you think this is a bit outrageous? If you like YouTube so much, you can invest yourselves. We're a venture capital firm. We haven't even held this investment for a month and you already want to push us out? This—aren't you being a little too domineering?"
Exactly.
When Michael Moritz received Nathan Bailey's request and learned that Time Warner wanted to buy YouTube's shares from him, he was completely stunned. Even the way he looked at Nathan Bailey became unfocused.
Sure, venture capital firms invested in startups to make money. Most investments only lasted two to three years after the target company went public, and sometimes they even cashed out before an IPO.
But leaving after just one month?
They'd never done that.
And being forced out after one month?
They'd never even heard of it.
The logic was simple:
If you think a company is truly great, you wouldn't miss its angel round.
And if you missed a company's angel round, then you wouldn't think that company was truly great.
Since you don't think it's that great—
Why would you kick out the angel investors between the angel round and Series A?
Right?
So—
Michael Moritz genuinely couldn't understand Time Warner's thinking.
As for that—
"Oh, Michael, that's because we didn't discover YouTube earlier."
Nathan Bailey explained with a smile. "We only found YouTube after videos related to Isabella and The Devil Wears Prada set appeared on it, so—we were one step late."
The explanation sounded reasonable.
But it still didn't explain how absurd Time Warner's behavior was.
Michael Moritz nodded as he listened, accepting Nathan Bailey's explanation, and then said, "Then why can't you wait until Series A? Nathan, you should know that internet companies burn cash quickly."
"We invested $3.5 million in YouTube, but that money will only last them until February next year at most."
"YouTube does video. Bandwidth costs, servers—those things are expensive."
"That's because we like it very much and want to independently shoulder all of their operating costs."
Nathan Bailey shrugged and said calmly, "Of course, that also has something to do with their name."
"YouTube is You plus Tube. When a company's goal is internet media—"
"Don't you think it would achieve better development with us?"
The straightforward words made Michael Moritz's eyelids twitch.
He himself had invested in YouTube precisely because of its grand vision.
That's right.
Before joining Sequoia Capital, Michael Moritz came from the media industry.
In the early 1980s, he was a reporter for Time magazine.
In 1982, he was promoted to head of Time's San Francisco bureau.
It wasn't until 1986 that he left Time Inc. and joined Sequoia Capital.
Because he had cultivated the media industry for so many years, he knew exactly how much value YouTube would have if it succeeded. It would be a revolution against traditional media.
But before it even succeeded, traditional media had already set its sights on it?
That—
"Sorry, Time Warner cannot own YouTube."
After some thought, Michael Moritz shook his head. "Time Warner doesn't have internet DNA."
"You won't be able to run YouTube well."
"Not to mention that just two months ago, you announced that you were abandoning the internet business."
"If YouTube ends up in your hands, there's only one outcome. Death."
With that, Michael Moritz stood up, clearly ready to see his guest out.
However—
"Michael, if you don't transfer YouTube's shares to us today, then the next person to come looking for you will be Steve Jobs. I don't think you want things to get that troublesome."
Nathan Bailey smiled at Michael Moritz.
"???"
Michael Moritz didn't understand what Nathan Bailey meant.
He glanced down at the business card on the table.
After confirming that Nathan Bailey was indeed Barry Meyer's assistant, he shook his head. "Nathan, I don't think I understand you. Your boss isn't Robert Iger, so—"
"But the person preparing to buy YouTube is Bob's ally."
Nathan Bailey raised an eyebrow and cut him off. "Isabella Hayward."
Michael Moritz narrowed his eyes.
He stared at Nathan Bailey for a long time. Seeing no sign that he was lying, he let out a helpless sigh.
"When we invested in YouTube last month, we valued it at $35 million."
"So a $3.5 million investment gave us 10 percent of the equity."
"Now, since you insist on having it, I'll sell those shares to you at cost."
"I only have one condition. Don't call Steve Jobs, okay?"
"Deal!"
Nathan Bailey stood up decisively.
Smiling, he extended his right hand.
This made Michael Moritz sigh.
Somewhat helplessly, he shook Nathan Bailey's hand.
Michael Moritz had known Steve Jobs for 25 years.
Or rather, the reason he was able to become head of Time's San Francisco bureau was because Jobs liked him.
Back then, after becoming the youngest billionaire in history, Jobs, at the height of his fame, wanted someone to write a biography of Apple and of himself. Michael Moritz caught his eye.
At the time, Jobs called him Apple's historian.
Because Michael Moritz could obtain first-hand information from Silicon Valley, Time's senior management promoted him to bureau chief. His only real job was to keep Jobs happy.
There was no helping it. At the time, North America had only three top-tier superstars.
One was Steve Jobs, one was George Lucas, and one was Steven Spielberg.
When the three were close friends—
Getting in with Jobs meant having everything.
Other people couldn't get into the Star Wars production crew?
Michael Moritz could stroll right in.
Others couldn't get any news about E.T.?
Michael Moritz could find out how filming was going with a single phone call.
Others didn't know what Apple's next product would be?
Michael Moritz could just walk over to Apple's campus and take a look.
Under normal circumstances, this relationship would have continued. Michael Moritz wasn't an idiot. When he could hang out with three young billionaires, becoming a billionaire himself was only a matter of time.
But everything came to an abrupt halt in 1982.
That year, Time's editor-in-chief told Michael Moritz that the 1982 Person of the Year would be Jobs. So Michael Moritz passed the good news on to Jobs.
Upon learning that he would be placed on equal footing with historical greats, Jobs was ecstatic. He was so excited that he even allowed Michael Moritz to interview his high school girlfriend, Chrisann Brennan, the mother of his eldest daughter, Lisa.
Jobs was genuinely giving Michael Moritz a lot of face.
But Michael Moritz messed it up.
Because at the time, Apple's shareholders wanted to push Jobs out of Apple.
To minimize the impact on Apple, they planned to tarnish Jobs's reputation before formally removing him. So—
They paid off Time's editor-in-chief.
They had the editor-in-chief tell Michael Moritz that Jobs would be the 1982 Person of the Year. That way, Michael Moritz would proactively write the feature article. Then, once the editor-in-chief had the article in hand, he could heavily revise it and publish content unfavorable to Jobs.
After that, Jobs's reputation would be ruined.
The logic was easy to understand.
At the time, everyone in the U.S. knew Michael Moritz was Jobs's good friend.
If even Jobs's trusted pen was publicly attacking him, then Jobs must be a monster, right?
And if Jobs was a monster, how could he possibly lead a company well?
Abandoning his girlfriend, denying his daughter—
All that dirt came out like this.
When the 1982 Time special issue was published, Jobs was completely stunned.
He didn't understand why Michael Moritz's interview was full of attacks.
He felt betrayed.
Then he kicked Michael Moritz out of Apple.
Afterward, Michael Moritz was also shocked. He tried to explain to Jobs that he hadn't done those things, but Jobs wouldn't listen. By the time Michael Moritz figured out the truth, it was already too late.
Apple's shareholders had already moved against Jobs, and Jobs was out of Apple.
Although the two later reconciled, to this day Michael Moritz still felt he owed Jobs.
So—
Nathan Bailey saying that Time Warner would bring Jobs into this deal?
In Michael Moritz's eyes, that meant this battle wasn't even worth fighting.
If Jobs really came to him and asked for a favor, how could he possibly refuse?
And he believed that Time Warner really could bring Jobs in.
Because the one who wanted to hold YouTube was Isabella.
She could easily bring Spielberg into it.