The Gates Call
Yoo Jae-won picked up the receiver and answered in English instead of the usual Korean greeting. "Hello?"
"Hello?" A flawless American greeting came through the line. Yet a flicker of disappointment crossed Yoo Jae-won's face. The voice belonged to a young woman, not the deep-voiced man he had been expecting. There were no women among Microsoft's current executives. The board had a few female directors, but none were young. This clearly wasn't the call from Microsoft he had been waiting for.
Then the conversation took an unexpected turn.
"Is this the ID Group executive secretary's office? This is Melinda, Chairman Gates' secretary at Microsoft."
Chairman Gates' secretary? Not the man himself, but close enough.
"Chairman Gates would like to speak with the chairman of ID Group regarding several recent issues. If you're willing to take the call, could we arrange a time?"
Yoo Jae-won realized that corporate chairmen didn't simply call each other directly. They routed everything through their secretaries first to set up a proper schedule. It was unfamiliar to him. He had spoken with Chairman Jeon Myeong-heon of Mirae Group several times, yet he had never asked Choi Kang-wook to schedule those calls. Whenever he picked up the phone, he was connected straight to the chairman. The same went for Vice President Lee Yong-kwon of Sambo. Looking back, both men had given him their direct lines. Microsoft, lacking that kind of relationship, apparently had to go through the secretary's office first.
"This is Yoo Jae-won, chairman of ID Group."
"Oh! Isn't this the chairman's secretary's number?" Melinda's startled reaction came through clearly. Given Microsoft's current situation, she had clearly been instructed to handle the connection with perfect courtesy and no mistakes. Having the chairman answer directly was a major failure on her part.
"It is the secretary's line, but the moment the phone rang I had a feeling it was for me, so I answered. As you can see, I was right."
"I'm so sorry. That was terribly rude of me."
"It's fine. It's my fault, after all. I don't like waiting long, though. If Chairman Gates wants to talk to me, tell him to do it now."
"H-huh? Right now?"
"Yes. I just issued an order to execute an important policy regarding Microsoft—an order for a hostile takeover. Depending on how my conversation with Chairman Gates goes, I might cancel it. So now would be best, wouldn't it?"
"C-could you please hold for just a moment?"
"Not for long."
"Yes! I'll connect you as quickly as possible."
"This is Bill Gates, chairman of Microsoft."
It took exactly three minutes after Melinda asked him to wait. The famous voice of Chairman Gates came through the receiver. Yoo Jae-won had heard it before—in voice files James Augustine had posted online and in YouTube clips and television reports from his previous life—but hearing it live felt different. Gates was clearly trying to sound composed, yet the tension and irritability in his voice were impossible to hide. He spoke quickly and sharply.
"Hello. This is Yoo Jae-won, chairman of ID Group."
"Melinda says you're about to launch a hostile takeover of my company. Why are you doing this to me?"
Gates sounded as though he had accumulated a long list of grievances. His tone was accusatory, but it didn't intimidate Yoo Jae-won in the slightest. To him, it simply sounded like the guilty party lashing out.
"Haha. You already know the answer, don't you?"
"What exactly do I know? Please be precise instead of making vague statements."
Perhaps the crisis had stripped away any room for composure. There wasn't a trace of leisure in Gates' voice.
"There's a Korean saying: 'Give an inch and take a mile.' I'm simply responding in kind to the many 'gifts' your company has given us."
Microsoft had tried to steal ID Technology's technology outright. Yoo Jae-won had struck back several times harder.
"So what do you want? Do you really think you can pull off a hostile takeover of my company? If so, wake up. I own fifty-one percent of the shares. No matter how much stock you buy on the market, you won't gain control."
When he mentioned his stake, Gates' voice grew slightly louder. Unlike Korean chaebols that maintained control with modest shareholdings, he held a clear majority. That gave him confidence that even a hostile M&A attempt could be weathered.
"Hmm? I'm aware. But to exercise control, you first have to remain a private citizen, don't you? What happens if Chairman Gates ends up in a federal prison?"
"W-what?"
Gates sounded genuinely shocked, as though he had never once imagined himself behind bars. Logically, going to prison wouldn't automatically strip him of control—he could still issue orders via letters or phone calls and appoint proxies. The second-largest shareholder's influence would also grow significantly. But what good was making money if you were locked up? America didn't bend the rules for chaebols the way Korea did. Alcatraz might not be in his future, but it certainly wouldn't be a hotel room either.
"Chairman Gates, think about it calmly. Did you really believe the things you've done would end with just paying a fine? You didn't even pay the fine immediately—you appealed. If you lose again, you'll take it all the way to the Supreme Court, won't you? It doesn't look like you've reflected at all."
"Appealing is a legitimate legal right of American citizens."
"I'm sure it is. The right of the people harmed by your company—or by you personally—to file lawsuits is also legitimate."
So far everything had been civil. But there was more than enough material to pursue criminal charges against Gates as well. A first offense might earn probation, but repeated convictions would guarantee prison time.
"Do you really have to go this far? If the battlefield turns into a mud pit, you'll get dirty too."
"Will I? We'll see. Anyway, what did you want to discuss?"
"Well, I originally planned to make a different proposal, but that seems pointless now. I'd rather know whether your intention to acquire Microsoft is genuine."
Yoo Jae-won could guess what Gates had originally intended to offer: a reduced settlement. The appeals court had already ruled against Microsoft, and the cost of maintaining their army of lawyers was only growing. That burden fell directly on Microsoft, so Gates had likely hoped to negotiate directly with Yoo Jae-won to drop the Supreme Court appeal in exchange for a smaller payout. But under the current circumstances, that proposal had become meaningless, just as Gates himself had said.
"Of course. One hundred percent genuine."
"Then what acquisition price are you thinking of?"
The question made Yoo Jae-won momentarily wonder why the chairman was asking something so basic. There were two main ways to acquire a company. One involved a detailed asset valuation. The other was to buy the company outright at a premium over its market capitalization. The first method was typically used after a bankruptcy filing and court receivership. The second was common when acquiring fast-growing startups. Yoo Jae-won had the second approach in mind.
"Hmm. What's Microsoft's current market cap?"
Gates fell silent. Yoo Jae-won opened Nextcom and searched for recent articles mentioning Microsoft's stock price. Bloomberg and other financial outlets supplied articles to Nextcom, but because Bloomberg ran its own paid real-time service, negotiations with Nextcom had been difficult. An article from the previous day appeared. The share price was eleven cents. It had fallen to one-tenth of the all-time high reached a year and two months earlier. Back then the market cap had been around $6.8 billion. Now it was roughly $680 million.
"Microsoft's market cap is in the low six hundred millions. I'll offer eight hundred million with a small premium."
"What? Eight hundred million? Are you joking right now? Our real estate holdings alone are worth over a billion!"
Gates, who had been breathing heavily, immediately pushed back. The figure of eight hundred million had clearly wounded his pride.
"Have you factored in the debt? Your fundamentals are already shattered. ID Group is about to release Android 1.0 and ID Office 2.0. How long do you think you can hold out? The acquisition price will change depending on the stock price."
Yoo Jae-won refused to yield.
"Of course, if ID Group announces a hostile takeover, the stock price will rise somewhat. But if you keep responding this way, I can just as easily announce that I'm abandoning the acquisition. Then the price will crash even further. Do you think this is the bottom? There's still the basement, and the second basement below that. I have nothing to lose. You should decide for yourself which choice protects your safety and your assets."
The more cards you held, the stronger your position. Yoo Jae-won had far too many. Gates was holding only one or two.
"Kuh!"
The call quality was so clear that Yoo Jae-won could hear the sound of teeth grinding. A year ago the company had been worth $6.6 billion. Now it was trading at one-tenth that price. Of course Gates would be furious.
But is that my fault?
Yoo Jae-won had seen plenty of people who blamed others when their own mistakes caused losses. Those same people also convinced themselves that any gains they made were entirely due to their own brilliance. He was beginning to understand exactly what kind of person Gates was.
"Haa… It's frustrating that I can't just hang up in anger."
What? Gates' reaction had gone beyond Yoo Jae-won's expectations. He had thought the man would explode and slam the phone down.
"I'll think it over and call you back."
"Very well. I look forward to a wise decision."
The call with Gates ended there.
Chairman Gates had left an enormous footprint in the IT industry. In terms of business acumen alone, he was far more impressive than John Carmack, whom Yoo Jae-won respected. Because he had been such a brilliant figure, his shadow was equally large. Later, after retiring from the front lines, he would pour his passion into a massive foundation helping Africa and the developing world, but that would never erase his notoriety. Too many people had been used as stepping stones for his success.
Yoo Jae-won had prepared meticulously since his previous life, and with the personal luck that came with James Augustine, he had managed to corner Gates and Microsoft. Even now, it wasn't completely over. His job was to keep applying pressure so that Chairman Gates would make the better choice.
The next day, ID Investment announced the start of its hostile takeover bid for Microsoft.
- ID Group launches Microsoft acquisition battle!
- Hostile M&A declared, indiscriminate stock purchases begin!
As soon as the U.S. stock market opened, massive buy orders flooded into Microsoft shares. At the same time, formal letters were sent to investment firms holding large blocks of Microsoft stock, offering to purchase their entire positions and asking them to contact ID Investment if they wished to sell.
They weren't blindly driving the price up, however. ID Investment's buy orders were capped at thirteen cents. They would purchase any shares offered at or below that price, but they ignored any sell orders above it. Trading was still active. Retail investors were trading among themselves at a premium. Perhaps because it was the first positive news Microsoft stock had seen in a long time, the price that had fallen to ten cents closed at fifteen cents—a fifty percent surge. Microsoft's unpredictable, stomach-churning stock price movements had begun.
Time passed, and January drew to a close.
"Chairman, Team Leader Lee Chan-soo is here."
"What? Team Leader Lee Chan-soo? He's here in person?"
"Yes. He's requesting to see you. What should I do?"
Yoo Jae-won was startled by the voice coming through the intercom. His office was in Yeoju, while Lee Chan-soo's team worked out of the Rodeo Building in Seoul. At this hour, Lee Chan-soo should have been working in Seoul, yet Kim Dae-seok was saying he had come all the way here. What could have brought him this far? Any ordinary business matter could have been handled through ID Talk. A sudden worry struck him—had the man made some serious mistake?
"Ah, tell him to come in."
The door clicked open, and a man bundled in thick winter clothing stepped into the office. It was Team Leader Lee Chan-soo. The last time Yoo Jae-won had seen him was at the Jeju Island MT at the beginning of the year. Even then he had looked haggard—dark circles under his eyes, noticeably thinner. When Yoo Jae-won first met him, Lee Chan-soo had the air of a refined young man from Seoul. Now, after countless hours in front of a computer under heavy workload, he looked gaunt and exhausted.
The problem was that Yoo Jae-won had never actually pressured him with a hard deadline for completing ID Office 2.0. He had only said it would be nice to have a version upgrade every year, and he hadn't even been serious about that. 1990 had already passed without an ID Office release. He had assumed Lee Chan-soo wouldn't feel burdened, but apparently that wasn't the case. Even after Yoo Jae-won had cleared up the misunderstanding at the Jeju MT, Lee Chan-soo still looked much the same—clearly still glued to his computer like a ghost.
"You came all the way down here instead of just using ID Talk? What's the problem this time?"
"P-problem? No, sir! That's not it at all today!"
When the highest-ranking person in the company asked if there was a problem, no one ever answered "yes" immediately. America might be different, but Korea certainly wasn't. Lee Chan-soo was an exception. Among Korean employees, no one complained to Yoo Jae-won as freely as Lee Chan-soo did. Most of the time his points were valid, so Yoo Jae-won took them as feedback and corrected course. Because of that, whenever Lee Chan-soo's messages arrived via ID Talk, Yoo Jae-won's first thought was usually that something had gone wrong again.
Today the man had come all the way to the office, so Yoo Jae-won had assumed something major had happened. Instead, Lee Chan-soo waved both hands in denial.
"Chairman, we've finally completed it!"
Lee Chan-soo held up a single diskette. It was a 3.5-inch floppy bearing the clear ID Group security mark. ID Group, with its well-established network, had been minimizing the use of diskettes to prevent industrial spies from stealing important documents or source code. Even so, team leaders at Lee Chan-soo's level were still permitted to use them.