American History 1988
Chapter 418 - 407 Epilogue

Chapter 418: Chapter 407 Epilogue

Microsoft’s appeal had failed; the US Supreme Court had denied Seattle’s petition and upheld the ruling of the Columbia District Court.

Even the many liberal political teams that Microsoft mobilized for street protests could not alter this fact.

Similarly, assaults from the party could not hinder the private agreement reached between the White House and Capitol Hill.

Jokingly, within the so-called separation of powers, the President, Congress, and the Department of Justice were all pushing for Microsoft’s split.

At such a time, a small faction could not sway the situation; it was the trend of the times.

Thus, after struggling for two more months, Microsoft almost accepted this fact amid general gloom.

Just as Gates and Ballmer had agreed before, they crafted a Microsoft split plan.

The core company that inherited the operating system assets would still operate under the name of Microsoft for subsequent businesses.

The split-off business dealing with office software, browsers, and other software operations would be handled by a new company named Office 365.

When this plan was officially submitted to the federal court and got recognized by the Department of Justice, Microsoft’s stock price plummeted again.

The market value, which had been close to 150 billion US Dollars at the start, had dropped to around 100 billion US Dollars by the time of the defeat.

Now, with the split plan revealed, Morgan Stanley, Goldman Sachs, and Merrill Lynch simultaneously downgraded Microsoft’s stock rating further.

Thus, Microsoft, which was the reigning champion of the software market just a few months ago, now had a market value of just over 80 billion US Dollars.

If nothing unusual happened, after the complete division at the year’s end, Microsoft’s market value might plunge even lower.

"Gates has announced his resignation from the CEO position," Clark said, excitedly approaching Dean with a newspaper in hand.

The antitrust case, lasting one and a half years, had finally settled completely, erasing the heavy stone that Clark had carried in his heart.

At this moment, he appeared exceptionally spirited, even his walking was brisk.

And Dean? He stood quietly in front of a floor-to-ceiling window, gazing down at Silicon Valley below.

"I know," Dean nodded slightly but showed no intention of taking the newspaper from Clark’s hand.

"Hey, man, this is a big deal.

The whole of Silicon Valley, no, the entire United States is talking about it."

Clark couldn’t understand Dean’s lost expression; wasn’t this supposed to be a happy occasion?

Following Standard Oil and AT&T, this was the third major antitrust case in the United States.

As the man behind this, Dean’s prestige in the tech industry was unparalleled at this moment.

Someone else, who loved the limelight, might have already been sitting in a TV studio, broadcasting this matter to the world.

Facing Clark’s puzzled look, Dean smiled, "Have you read Nietzsche’s ’Beyond Good and Evil’?"

"What?" Clark was even more confused.

"The dragon slayers eventually become dragons," Dean said, returning his gaze to the original coastline, "Today, the Department of Justice is our ally, tomorrow they might be our enemy."

"This..." Clark shivered in fright, "Dean, have you heard any rumors?"

Good God! Microsoft’s current dismal situation is something Netscape does not wish to experience.

"Don’t be nervous," Dean said with a chuckle, shaking his head, "As long as everyone keeps their understanding, everything will proceed as usual."

Netscape, with its limited influence, was far below the threshold for antitrust considerations.

What Capitol Hill and even the White House feared more was the person, Dean, his extensive layout in the internet industry surpassed any other giant company in the sector at this time.

The Department of Justice could initiate lawsuits against corporations on antitrust grounds, but this was not applicable to individuals.

At this time, their tacit understanding would play a delicate balancing role, even though they had not reached any written or verbal agreements.

"By the way, is there any news from Novell Corporation?" Dean remembered another matter.

"The ARK system has already been announced," Clark revitalized at the mention.

Operating system companies, computer manufacturers, and multiple software companies were pushing forward together, directly aligning the entire industry chain.

"Guess what? When a reporter broke this news to the Seattle spokesperson immediately, the person was so shocked they couldn’t even speak."

Clark, recalling that comical scene, couldn’t help but laugh heartily.

It was too satisfying! They were not only dismantling Microsoft, but they even intended to completely bury its core business.

Although the future outcome was uncertain, Gates would certainly spend a long time uneasy.

Tsk, this was also a retort to his previous domineering, arrogant, and extremely selfish behavior.

"Cooperate with them as much as possible, especially in overseas operations,"

The Windows system already had an absolute position in the American domestic market, but the internet was still in its infancy overseas, presenting vast opportunities.

Whether in Europe or Asia, the current level of internet penetration was not even a tenth of that in the United States.

This represented an excellent opportunity for the ARK operating system.

A vast expanse of untapped land, plus Microsoft’s imminent split, presented a heaven-sent opportunity.

Compared to America where Microsoft had built a strong defensive moat, starting from scratch and slowly building up the overseas market was somewhat easier.

Plainly put, it is easy to build a house on undeveloped land, but much harder on a plot already built upon.

Because you must first demolish the existing house to build the one you want.

Dean’s advice to Novell Corporation was to first focus on overseas markets, taking advantage of Microsoft’s distraction to establish their own ecosystem.

Wait for the future when the internet would bloom everywhere, and perhaps take a strategy of encircling the cities from the countryside.

Our founder taught us already, it’s not impossible.

Utilizing the markets of other countries to eventually pressure the United States to choose ARK was Novell’s only way out.

Regrettably, Dean’s own investment company only held a small share in ARK; Netscape and Bit had invested a bit more.

Why didn’t he invest more? Still that sentence, Dean needed to maintain a tacit understanding with America’s three branches of power.

Business could be done, but he could not control these companies too much.

Especially in the internet sector, Dean had already seen many names in Silicon Valley that would be well-known in later generations.

For example, eBay and Global Village enjoyed exceptional reputations amidst the surge.

However, Dean restrained himself, he didn’t invest in these companies; instead, he favored the field of technology research.

For instance, with his support, Palm established a research and development center in Santa Clara.

They mainly developed specialized research in intelligent systems, voice recognition, fingerprint recognition, and even chip design.

Most of these would not see commercial applications for several years, and the funding spent was counted in billions of US dollars.

But Dean still invested, partly to show the federal government, and partly to position for the future.

At his level, investment was often not just about the returns, they carried deeper meanings.

Besides these, another thing that Dean liked to do was to buy land everywhere.

He bought hundreds of thousands of acres of farmland in America, and even more islands and land overseas.

Leaving money in the bank was not advisable; converting it into fixed assets might preserve its value better.

Oh, by the way, he once casually wrote several checks worth hundreds of thousands of dollars at the Stanford Startup Office.

One of these companies was named BackRub, which had recently changed its name to Google.

Dean, while reviewing reports, stumbled upon this fact and then made a special effort to learn more about it.

Yes, that’s right, the Google.

Well, it was completely accidental; nobody knew Google’s former name was BackRub.

This time Dean had simply stumbled into this situation, so he just let it be.

....

"Mr. Price, this is the divestment plan for the next two years, as well as the equity transfer contract," said a woman assistant in a formal suit, smiling as she handed over a document.

Dean casually glanced at it before passing it to his lawyer.

"Dean, Bit and Goldman Sachs have always been close partners. In the battle for Seattle, our cooperation was seamless," Jon Corzine said with a smile, sitting across from him. Today, the largest transaction on Wall Street was taking place here.

"It is precisely because I trust Goldman Sachs’s professionalism that we are sitting here."

After receiving a nod from his lawyer, Dean finally picked up the pen and signed the contract.

All right, after signing this contract, Dean felt somewhat relieved.

Just as that female assistant had mentioned, this was a stock divestment plan.

Dean would gradually reduce his shares in Bit Corporation to around 32% over the next two years.

Since Bit went public, he had never divested and had always maintained a 37.09% shareholding.

Indeed, company founders like him who didn’t cash out were rare, but Bit Corporation had always been profitable.

Even with profit continually increasing and substantial dividends expected, Dean obviously didn’t want to cash out his shares too early.

However, because Bit’s business was booming, Dean’s insistence on holding his shares had drawn some murmurs of discontent from Wall Street.

Everyone else had been just sipping the broth while he ate the big chunks, and that wasn’t going to work.

Morgan Stanley and Goldman Sachs had always hoped Dean would release more shares, but he had only loosened up today.

Reducing from 37.09% to 32% represented a difference of 5%.

Given the size of Bit Corporation, this transaction involved nearly six billion US dollars.

Almost no investment bank could swallow that alone, and according to the regulatory requirements,

founders could not cash out more than 1% of the total shares each year, and had to publicly disclose their divestment plans.

Without a doubt, the 5% exceeded the limit that Dean could cash out over two years.

Moreover, a founder cashing out shares could have a significant impact on the company, even if it was just 1%.

Therefore, to minimize the impact, today’s contract was signed.

Of the 5% divestment, 3% would be acquired by Goldman Sachs.

One percent of it would be transacted in cash, while the remaining 2% would be exchanged for 8% of Goldman Sachs’s original shares.

Yes, after signing the contract, Dean had become one of the shareholders of Goldman Sachs.

And he was also one of the original shareholders before it went public, this famous investment bank on Wall Street had always been a private company until today.

However, in an era when going public was a trend in America, even Goldman Sachs could not resist such a temptation.

It was already drafting plans to go public, expected to complete the listing process of Goldman Sachs within the next one to two years.

Don’t underestimate this 8% stake; Dean was nominally the third-largest shareholder of Goldman Sachs.

Ahead of him, Sumitomo Bank and the Kamehameha Schools Investment Division together held about 20% of Goldman Sachs’s shares.

Additionally, Goldman Sachs employees collectively owned 24% of the shares. The rest, aside from Dean’s 8%, was distributed among Goldman Sachs’s 221 partners.

So after the equity exchange, although Goldman Sachs had become the third-largest shareholder of Bit, Dean had also become its third-largest shareholder, a fair exchange.

From 5%, subtracting 3%, there was still 2% left. Of this, 1% would be handled by Goldman Sachs to help Dean find investors to cash out, while the other 1% was acquired by Morgan Stanley.

Such a divestment involving billions of dollars, even if it was only a fifth, could not be dumped on the open market.

That would cause panic; only handing it over to professional institutions could Dean feel assured.</p

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