The Information Superhighway
"Huh? Ilseong? The Ilseong I know?"
"Yes. Chairman Choi Hyun-hee of Ilseong Group specifically requested a meeting with you over a meal."
Yoo Jae-won had never openly insulted Ilseong Group. Still, whether it was the 1988 Export Industry Night or the recent financial law amendment, he had landed several devastating blows on Choi Hyun-hee. Their business territories barely overlapped. At most, Ilseong might ask to adopt ID Office. Yet for years Ilseong had relied on its own word processor, Hunminjeongeum, for internal documents—right up until the mid-1990s, when it finally switched to Office. Jae-won had no idea why Choi wanted to meet, but one conversation seemed harmless enough.
The circled items on the schedule were mostly interviews. There was a special interview with KBS that included a camera crew, and the three major dailies were already confirmed. The media outlets had apparently been asked in advance what they intended to ask; short memos summarized their requests. They all wanted the same thing: detailed insight into the Microsoft dispute and the ongoing litigation.
"We still have plenty of time before school starts, so let's proceed with all of them."
Time was the one resource Yoo Jae-won had in abundance. Choi Kang-wook had already curated the best possible schedule, so the most useful thing Jae-won could do was carry it out diligently.
"By the way, how did the KETEL acquisition go?"
"Due diligence is complete. We only need to settle on the final price and you can sign."
Choi Kang-wook flipped through a binder and handed over a neatly organized report—an asset valuation of KETEL's holdings and data.
"Wait, is this the number I saw? One hundred twenty million won? That's all?"
"It's not that the number is low—we're already being generous. KETEL's systems are worse than expected, and their user numbers are heavily inflated. They claim one hundred thousand subscribers, but fewer than ten thousand log in even once a month."
Once a month, not once a day. The servers themselves were nothing special either—an old IBM system originally used during the Olympics, purchased second-hand at the cheapest price available. A strict valuation put the real worth under eighty million won. The Korea Economic Daily, however, wanted at least to break even. Jae-won would have preferred to walk away and start from scratch, but Minister Hong Byung-do's involvement made that impossible. Choi Kang-wook had negotiated the price down to one hundred twenty million won. In exchange for preserving the minister's dignity, they had extracted a small concession.
"Did you say shares in Daicom?"
Daicom's official name was Korea Data Communications, founded on March 29, 1982. As the name suggested, its core mission was building the national data network rather than ordinary telephone lines. It was also leading the ISDN rollout. At present the company worked mostly with copper wire, but in time it would lay fiber-optic cable that would form the backbone network. Future internet providers such as Korea Telecom and Hanaro Telecom would lease that backbone to operate their services. Once they accumulated enough capital, they might run their own last-mile lines to rural villages, yet the backbone itself would remain the critical artery.
Hong Byung-do had promised that, in return for paying a premium for KETEL, he would allow ID Technology to acquire a portion of Daicom's shares at a favorable price.
"How much?"
"Ten percent. If we have the funds, we can take up to thirty percent without paying any premium."
Korea Data Communications had capital of 53.8 billion won—a substantial company. Ten percent would cost just under 5.4 billion won, well within ID Technology's means. During the IMF crisis the shares would have been dirt cheap, but in the early 1990s, when the information and communications sector was just taking off, they were the kind of stock everyone wanted and few could obtain.
Hong Byung-do's calculation was obvious: hand over the Daicom stake and make Yoo Jae-won responsible for securing ISDN subscribers. If the numbers rose, the minister could claim credit; if they stayed flat, he could disclaim responsibility. He would also expect Jae-won to contribute capital when Daicom laid the backbone.
"The tail is wagging the dog."
A modest PC communications service like KETEL came bundled with a Daicom stake. Jae-won wanted to buy the full thirty percent immediately, then keep acquiring shares on the open market until he controlled the entire wired network and could steer Korea's internet development exactly as he wished.
"We'll take the ten percent now and the remaining twenty percent after autumn."
Right now, however, cash was tight. He had committed to investing one hundred million dollars in oil by summer, leaving little spare capital. Wolfenstein royalties arrived quarterly, Android Alpha advertisements rotated every hundred days, and the only daily revenue stream was ID Office—whose post-Security Challenge sales remained uncertain.
"You worked hard while I was away."
After hearing the full report, Yoo Jae-won expressed both satisfaction and gratitude. He knew exactly how much easier it was to travel abroad with someone like Choi Kang-wook watching the home front.
"You're not the only one who worked hard. I was on edge the entire time during the Microsoft trial. From now on I'll study English diligently so I can accompany you overseas as well. Ah, please take a look at this too."
They had been exchanging thanks when Choi Kang-wook produced one more file: the 1989 performance settlement, corporate tax payment receipts, preferred-stock dividends, and ID Investment's capital call documents—a summary of all corporate fund movements.
Revenue and tax figures were items Jae-won had already reviewed via ID Talk while in the United States. After deducting various expenses from 118 million dollars in sales, net profit came to just over ninety million dollars. A more aggressive accounting treatment could have increased that figure, but it would also have raised the tax bill. By claiming every legitimate deduction without crossing into illegality, they had arrived at roughly ninety million dollars, on which corporate tax was assessed. The statutory rate, including defense tax, was thirty percent, yet after all available credits the effective rate fell to twenty-three to twenty-five percent.
Fourteen point five billion won—the corporate tax ID Technology would pay the state for fiscal 1989. Some payments were still pending and certain accounting procedures remained incomplete, but the company had formally declared its obligation to remit 14.5 billion won.
"Well, I can brag about that at the Blue House tomorrow."
"Indeed. I doubt any other company calculates its tax liability down to the last won the way we do."
ID Technology's social contributions did not end there. Year-end donations had been generous, and the company provided not only health insurance but also employment and industrial-accident coverage for every employee. Outsiders sometimes questioned why an IT firm needed industrial-accident insurance when its work was rarely hazardous, yet the packaging plant in Yeoju operated industrial presses and binding machines that carried real risk. Programmers, too, would one day be recognized as a high-intensity occupation once the IT era fully arrived.
"Hmm? The dividend treatment is unexpected."
The question arose when Jae-won reached the dividend section after the tax figures. Net profit for 1989 stood at 45.7 billion won. One percent—457 million won—had been allocated as preferred-stock dividends. The previous year's dividend had been only 100 million won, a 4.5-fold increase in a single year. Yet most of the recipients had chosen to reinvest the money in ID Investment rather than take the cash.
"They said they already had sufficient wealth and declined to receive it. So I suggested they invest in ID Investment instead of leaving the money in a bank."
"Well done."
Jae-won understood their personalities. If they had continued refusing the money outright, he would have been placed in an awkward position. By opting for investment instead, they had spared him the need to persuade them to accept payment. He did wonder what they would think when the extraordinary returns materialized at settlement time.
"Lastly, Team Leader Lee Chan-soo has requested a meeting."
"Ah, Mr. Lee Chan-soo. And this really is the last item, correct?"
Choi Kang-wook answered with a knowing smile. Evidently a great deal more work still lay ahead.
"President, I have nothing but respect for you!"
Lee Chan-soo, whom Jae-won had not seen in some time, opened with an unprompted declaration of admiration.
"What brought that on? Have a seat first."
To Jae-won the outburst seemed abrupt, but from Lee Chan-soo's perspective it was entirely natural. The first shock had come from the ID Office source code. Chan-soo had spent years honing his programming skills to the point where he could hold his own in the industry. He had always prided himself on possessing the intellect to enter Seoul National University, yet the material had still been difficult. When he finally opened the ID Office source code, one of his long-held assumptions collapsed. Source code could actually be read fluently. Until that moment he had needed to labor over every function just to understand what it did, especially code written by others. ID Office was different. The meticulous comments attached to each function made even the most obscure routines transparent. Moreover, the printed source code, cross-referenced with diagrams of the graphical interface, made the program's overall architecture immediately comprehensible. Although Lee Chan-soo had contributed not a single line to ID Office, reading the source code left him feeling as though he had been part of the team.
"The optimization techniques were masterful as well. Concepts like shared memory and file compression were new to me. I never imagined assembly language could be used so cleanly."
Lee Chan-soo's praise showed no sign of stopping. Having grown thick-skinned through years in business, Yoo Jae-won felt little embarrassment at hearing himself praised to his face. Besides, the source code for ID Office had been written from knowledge he had earned through blood and sweat in his previous life; he felt no need to be modest.
"I also didn't expect you to deliver such a perfect knockout victory against Microsoft."
Lee Chan-soo continued to enumerate Jae-won's achievements. The accomplishments of 1989 were dazzling enough to make one's eyes hurt; one could talk about them all day without growing tired. It had reached the point where, back at school, juniors would grab Chan-soo and beg him to recount the stories. Thanks to those conversations, the formal speech he had once used only with difficulty now flowed naturally the moment he saw Yoo Jae-won.
"From now on, ID Office will be under Team Leader Lee Chan-soo's direction."
"Pardon? What do you mean?"
"The Silicon Valley development team will be fully committed to completing Android 1.0. Therefore ID Office must be handled by the Rodeo Team here in Korea. The 1.0 framework is already in place, so the task is simply to build upgrades on top of it. I've already outlined the upgrade direction. I'll do my best to match whatever staffing you need, so go ahead and build your team."
Silicon Valley would focus on Android. Korea's Rodeo Team would focus on ID Office. Game development and Glide X would be consolidated under ID Software. That was how Yoo Jae-won intended to bring order to the previously scattered development groups.
"Any ID Office developers currently in Silicon Valley who wish to work in Korea will be transferred to the Rodeo Team, so don't worry."
"Wait—does that mean Silicon Valley programmers are coming to Korea?"
"Yes. I can personally vouch for their abilities."
Lee Chan-soo's mouth remained open in astonishment. Vouch or not, Silicon Valley developers were presumably American. Communicating smoothly with them would require English, and the thought left him momentarily daunted.
After confirming the company's most urgent matters, Yoo Jae-won finally dragged his weary body home. Rest, however, would be brief. Official schedules began the very next day. The first destination was, naturally, Cheong Wa Dae—the pinnacle of Korean power.