But every empire creates its own backlash.
Qualcomm had become too dominant, too aggressive, and eventually the entire industry started pushing back. During the 3G era, too many companies had already been squeezed by Qualcomm's control. By the time 4G standards were being shaped, nobody wanted to keep feeding that machine.
So the Chinese and European players abandoned the idea of evolving the next standard from CDMA and chose to build LTE on top of OFDM instead. At the same time, Intel, IBM, Motorola, and Nortel in North America pushed WiMAX, with Japanese, Korean, and Taiwanese companies lining up behind them.
That left Qualcomm isolated.
With fewer allies and too much of the industry openly against it, Qualcomm had little choice but to keep pushing the CDMA path on its own. The biggest structural weakness in CDMA was self-interference, so Qualcomm tried to solve the problem through multi-user detection, or MUD.
But after digging deeper, they ran into a wall.
MUD could improve CDMA in some ways, but it also exposed other inherent limitations in the system. It was harder to support at the system-design level, more expensive to commercialize, and, most important, it did not produce a practical advantage big enough to justify the pain. OFDM could achieve similar real-world results with far less complexity.
And by then Qualcomm's reputation had become bad enough that almost nobody wanted to co-develop MUD with them.
Against the combined R&D strength of the Chinese players, Huawei, ZTE, Datang, and the European camp, Ericsson, Nokia, Alcatel, Qualcomm had no realistic chance of beating LTE by forcing CDMA down a harder, more expensive, less commercially attractive path.
So Qualcomm abandoned UMB and joined LTE.
As for the North American camp that had backed WiMAX, it ended badly. Motorola was bought by Google. Nortel collapsed. Japan and Korea shifted to LTE. The Taiwanese side that refused to give in took losses of more than $30 billion.
By the time 4G was settled, the real winners were China and Europe. Qualcomm had lost ground in communications standards, so it shifted its center of gravity to baseband chips instead. And with its massive patent moat already in place, it still stayed far ahead of MediaTek, Huawei, Apple, and Samsung for years.
Which was exactly why Bruce wanted those CDMA patents so badly.
Once the smartphone era arrived, licensing income alone would become a machine that printed money. And if he played the long game with enough ambition, using his knowledge of the future to start laying groundwork in OFDM and LTE early enough, he might even be able to build a real patent wall before Qualcomm fully abandoned MUD.
If that happened, then one day, when the timing was right, he would not just be collecting licensing checks. He could step into the fight for the global baseband chip market itself.
The thought alone sent a current through him.
This was the doorway.
The starting point.
A chance to get into baseband chip development before the real war even began.
Of course, Bruce had considered buying Qualcomm outright. With the Nasdaq crash hammering valuations, the timing was not terrible. But Qualcomm would cost far too much. And Irwin Jacobs had a well-earned reputation in the market. The man was famous for playing hardball, not just with competitors, but with his own people. Over the years, a company founded by seven people had effectively become the private territory of the Jacobs family.
Bruce had no illusions about trying to outplay an old operator like that.
More important, he did not have the capital.
And even if he did, he would still rather spend it trying to position himself around Apple.
So compared with trying to swallow Qualcomm, getting hold of MegaChip Electronics at a relatively low price, and using it as a foothold in the baseband space, looked far more realistic.
He looked at Michael Moritz.
"Do you have the full file on MegaChip?"
Michael nodded. "I do. Just not with me."
"Send it to me the second you get back."
Michael nodded again.
Bruce thought for a moment, then asked, "Why would Qualcomm hand off key CDMA licensing rights to MegaChip in the first place?"
Michael answered directly.
"MegaChip and Qualcomm were both part of the original CDMA development effort. They cross-licensed patents. But compared with Qualcomm's first-mover advantage, MegaChip's real strength stayed concentrated in ASICs, so it never had Qualcomm's position in CDMA itself.
"Then in 1997, Qualcomm signed an agreement with MegaChip that gave them broad authorization to develop, manufacture, and sell CDMA chips. Part of it was likely to reduce antitrust pressure in the U.S."
Bruce nodded slowly.
"So Qualcomm managed to reduce antitrust risk and still keep the economics tilted in its favor. That's a nice piece of work."
Michael smiled faintly. "Paul Jacobs never likes losing money on anything."
Bruce gave a slight nod, but his expression had turned thoughtful again.
He understood very clearly that MegaChip was only an entry point, not a solution by itself. One foothold in the baseband market was still just that, a foothold. Turning that into real competitive strength would take billions in annual R&D and years of execution. Going up against Qualcomm was not going to be easy under any version of reality.
And right now, capital was exactly what Bruce lacked most.
He had originally planned to ask Michael about the investment performance of Funds Two and Three, the technology and biotech vehicles. But now that MegaChip had appeared, the rest of the conversation had lost most of its urgency.
Besides, based on what Michael had already done in Fund One, Bruce was more than satisfied. The man's reputation was clearly earned.
Michael noticed Bruce's attention was no longer on the game, so he suggested they call it a day. Neither of them was the kind of man who loved leisure for its own sake. Once the real conversation was over and Michael had accomplished his fundraising objective, continuing to hit golf balls felt like wasted time to both of them.
They split up afterward.
On the drive home, Bruce sat in the back seat and thought through the implications.
In the development plan he had laid out for himself, the next three to four years were supposed to stay focused on four main fronts: the internet, broad entertainment, finance, and investment. As for hard tech, his original plan had been to wait until his capital base was strong enough, his financial leverage more powerful, and his network broader. At that point, buying his way into technology through acquisition would be much easier than trying to build it brick by brick.
That was how Google did it.
How Amazon did it.
How Alibaba and Tencent would eventually do it.
Use capital to acquire technology and close the patent gap.
Bruce had planned to do the same.
But MegaChip had just handed him a small opening to get in earlier.
After thinking it through, he made the call.
"Fine. I'll review the MegaChip file first. If the acquisition price is manageable, I'll take it. If it's too expensive, I walk."
That felt right.
He still did not have the luxury of being careless with capital. Discipline mattered.
Once he made the decision, the mental pressure eased a little.
Then, after temporarily setting MegaChip aside, the other issue came back to the front of his mind.
Michael's request for another $50 million.
Netflix was going to become a company worth hundreds of billions. If there was a clean way to get in, Bruce had no interest in missing it.
So he started reviewing his cash position.
Shorting Enron had already tied up about eighty percent of his capital, but he still had some reserve money left.
He took out his phone and called Zhang Lei.
"Mr. Guo."
"How are the talks with IDG going?"
Zhang Lei answered immediately.
"Internally, they still aren't fully aligned on whether they want to give up their Tencent stake. But our $8 million offer definitely has their attention."
"Attention is enough," Bruce said. "If they still hesitate, raise the price. Just don't overplay it. I don't want them deciding they can name any number they want."
"Understood."
"And Tencent?"
"Still no formal response. But based on what we're hearing, management is leaning toward selling part of their equity to build a winter reserve. They just haven't decided how much they're willing to let go."
Bruce thought for a moment.
"So right now the only Tencent stake we actually hold is the twenty percent we bought from PCCW for $5 million?"
A pause.
Then Zhang Lei said, "Mr. Guo, that's on me."
Bruce cut him off at once.
"No. You've handled it well. I'm not criticizing you."
Then he shifted gears.
"What do you think of Sina and Sohu?"
Zhang Lei hesitated. He was not entirely sure where Bruce was going with it.
"Both are worth buying. They're just getting dragged down by the Nasdaq collapse."
"Then do you want them?"
That made Zhang pause.
"Your meaning is...?"
"Simple. HanHua Investment Management steps away from the Netease and Sohu acquisitions. Your HanHua Capital, through the Lichun Fund, takes those investments instead."
"Can I ask why?" Zhang Lei said carefully.
"I need to pull some capital out of HanHua Investment Management. I'll replace it later, but I'm not willing to slow down the China investment program. So I need to give up a few secondary targets."
Bruce did not hide it from people he trusted.
Zhang Lei understood immediately.
"I can take over Sina and Sohu. But on Netease, I think we may have a real shot at buying the whole thing. I had people reach out to Ding Lei a while ago, and I think there's a serious opening there."
Bruce had not been watching Netease closely lately.
"Where's the stock now?"
"About $3.50 a share. Still dropping. It's heading toward junk-status territory."
Bruce remembered enough of the story to know that Ding Lei had once come dangerously close to selling Netease entirely.
"Netease is worth buying," Bruce said. "But Ding Lei has to stay. I don't care if we have to use equity to do it. He stays."
Among China's four big portal names, TOM had once looked brilliant because of its multimedia and value-added services, but 3G had turned it into yesterday's news. Sohu had serious moments, but Charles Zhang was too erratic. Sina was still good, but once Wang Zhidong was pushed out, the company lost its center of gravity. Only Netease kept climbing, year after year, even more than a decade later.
That alone told Bruce how good Ding Lei really was.
Any man with a functioning brain could see what that meant. If he had the chance to keep an operator like that in place, he should pay whatever reasonable premium it took.
Bruce added, "If the acquisition gets to the point where terms are possible, I want to meet Ding Lei myself."
For something this important, he wanted to handle it in person.
Zhang Lei still sounded surprised by how much weight Bruce was placing on Netease and Ding Lei, but he agreed without hesitation.
Then Bruce said, "And hire faster. If every single negotiation still needs you in the room personally, we're moving too slowly."
"We haven't stopped recruiting," Zhang Lei replied. "But HanHua is still too new. We don't have enough pull yet with top-tier talent."
"That's fair. I'm not criticizing the effort. I'm just flagging the bottleneck." Bruce paused, then added, "And I'll repeat what I said from the start. As long as there's no major loss, I won't interfere in how you run HanHua Capital. That commitment stands."
"Thank you for the trust, Mr. Guo."
"No need to thank me. That's all I needed. If you don't have anything else, I'm going to hang up."
"Nothing on my end."
"All right. Talk soon."
"Talk soon."
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