The Great Reorganization
September 1993 had arrived, and several more days had passed. It felt like only yesterday that the hopeful year of 1993 had begun, yet now barely four months remained. In Korea, summer vacation would be ending around this time, but America was different. Thanks to that, a small change had come to Yoo Jae-won's personal life. He had become a second-year university student. Thanks to the legendary fast-track pass that would go down in Stanford history, the year itself held little meaning for him, but he still went through course registration and greeted his professors to get into the spirit of the new semester. Tiffany had also advanced to her third year, and as her classes grew more difficult, time for dates became scarce. Yoo Jae-won had decided to focus on company matters for the time being, and even though they lived in the same neighborhood, the time they spent together was less than when they had lived in the house near Stanford. Nevertheless, neither Yoo Jae-won nor Tiffany felt particularly anxious. He had already introduced himself to her parents, and she had met his parents and relatives when they visited San Francisco. His parents had not been particularly surprised to see Tiffany. It seemed they had already assumed that if their son found a girlfriend while living in America, she would be American. His uncle and other relatives felt the same. The only difficulty was that his parents and relatives did not speak English, making direct communication challenging. Tiffany faced the same issue, but she had learned a few Korean greetings and phrases from Yoo Jae-won and earned good marks for it.
Returning to his routine, Yoo Jae-won became as busy as ever. Regular patches for the Android operating system, next-generation design work, development of ID Office 3.0, reviewing angel investments, designing investments for ID Investment, feedback from the second Security Challenge, and the launch of new products like New Egg 2. Even two bodies would not have been enough. Recently, he had been commuting directly to ID Technology's headquarters in Silicon Valley. This pattern had continued since the end of August, a clear departure from his usual habit of working from his home study. It meant that not only routine business but also newly emerging issues were of critical importance. And rightly so, because the changes affected not only ID Technology but the entire group, including ID Investment.
"How did it come to this?" Yoo Jae-won muttered briefly inside the moving car. It had all started with the simple matter of constructing a headquarters building. The ID Software building he had seen in Dallas had clearly awakened his desire for a proper headquarters. The massive ID logo atop the building made it feel as though ID Group owned that part of the city. Of course, the word "Software" had also been prominently displayed beneath the logo, but to Yoo Jae-won it simply looked as if ID Group had secured another key foothold in Dallas. He had decided to build three buildings in total—one in Silicon Valley, one in Manhattan, and one in Seoul—and had given the order. Yet when it came to deciding which organizations would occupy them, the matter proved far more complicated than expected. The reason was simple: while Yoo Jae-won had been busy with various projects, the organization had grown far larger than he had realized. The corporate analysis report that Remington had personally prepared and presented at the regular ID Group executive meeting in late August had also played a major role.
Many people's lives had changed because of Yoo Jae-won. His parents and the extended Yoo family had seen their fortunes flourish, and the people of Deokjin-ri were no exception. Naturally, the closer someone was to Yoo Jae-won, the greater the positive change. In the case of his parents, who could not be closer, his father had become chairman of the ID Foundation and president of the Handball Association, while his mother held the lengthy title of real estate investment director at ID Investment's Korean branch. In his previous life, his father would still have been working as a laborer at the brown rice oil factory, and his mother would have been a door-to-door saleswoman for Daeho Electronics. Now, imagining their old lives was nearly impossible. Remington's transformation had been equally dramatic. He had been president of ID Technology, gotten married, and welcomed a beautiful daughter. Recently, he had enrolled in Stanford's EMBA program to further strengthen his qualifications as an executive. ID Group invested generously in employee development at the corporate level. It actively encouraged employees to attend night school and covered nearly all tuition costs. Even for less formal pursuits such as attending academies or buying books, the company provided at least half the cost. Remington's Stanford EMBA represented the largest tuition support ID Group had ever provided—$120,000 for a one-year program, an unprecedented amount. Yet it was not a course one could simply buy one's way into. A bachelor's degree was the minimum requirement, along with executive experience at a recognized company and a substantial stack of documents for admission. Remington, who had worked diligently through the difficult Stanford EMBA program, immediately applied what he learned to company management. One example was corporate analysis. The SWOT analysis he had brought to the regular executive meeting a few days earlier was precisely that.
SWOT stood for Strengths, Weaknesses, Opportunities, and Threats. It was a technique Yoo Jae-won knew well—simple, intuitive, and easy to apply from individuals to large corporations. Some interviewers even asked candidates to perform their own SWOT analysis during job interviews, and it served as an excellent tool for examining the current state of a massive enterprise like the one Remington belonged to. When Yoo Jae-won first received the ID Group SWOT analysis report that Remington and his secretaries had prepared, he had not expected much. He had congratulated Remington on starting the Stanford EMBA program, but he had not imagined that Remington's management skills would improve dramatically. What significant knowledge could a one-year program impart, especially to busy working executives? The real value of an EMBA lay not in the education itself but in the network one built with fellow participants. Company presidents and directors from major corporations gathered to solve difficult assignments and travel together, naturally forming connections that became invaluable assets in the business world. Yet the SWOT analysis Remington had produced exceeded expectations. It was sharp and insightful.
First, the greatest strength Remington identified for ID Group was Yoo Jae-won himself. The overwhelming market share in PC operating systems and office software stemmed from Yoo Jae-won's flawless programming ability. Even in cutting-edge fields like the internet and big data analysis—still not yet mainstream—Yoo Jae-won had handled everything alone. ID Investment was no exception. The two massive investment successes had been designed by Yoo Jae-won, and the third ongoing investment had also followed his guidance. For that very reason, President Remington had also listed Yoo Jae-won under weaknesses and threats. If anything happened to Yoo Jae-won, the entire group would come to a halt. Program development and new technology creation would stop completely. To reduce the burden concentrated on a single person and ensure smooth group operations, a larger and more flexible organization than the current structure—divided between Technology and Investment—was needed. What had begun as a meeting to discuss building three headquarters and deciding which divisions would occupy them had ultimately expanded into a full-scale corporate reorganization.
"Well, things had gotten a bit bloated," Yoo Jae-won admitted. Thanks to Remington, the issue had been raised at the right moment. If they had missed the timing, the task would have been several times more difficult and complicated. Fortunately, they had caught the perfect window to restructure the company with minimal disruption. Moreover, Yoo Jae-won did not need to worry much about the details. There were now plenty of executives capable of sharing and handling his concerns. Remington, Choi Kang-wook, Vincent Greenhill, President Henry Samuel, and Kevin Johnson of the Android Division were all at the president level. In addition, high-ranking executives like Allen were reliable people who could take on Yoo Jae-won's burdens. That did not mean Yoo Jae-won was sitting idle. He had clearly set the direction. He had firmly decided to separate Nextcomcast, the Android Division, and ID Software—all previously under ID Technology. If these companies remained under ID Technology, problems could arise during future public offerings. ID Technology's own valuation had grown so large that the per-share price might become unaffordable for ordinary investors. There was also a high possibility of facing pressure for corporate division. Forced corporate division orders were not easily issued. They did not simply result from high market share; clear evidence that consumers were being harmed by a company's overwhelming market dominance was required. Even then, it would come through court order and could reach the Supreme Court. Since ID Group achieved its market share through superior technology and pricing rather than by forcing losses on consumers, it was unlikely to receive a forced division order. Still, the future was uncertain.
Not only that, but the newly established semiconductor division was also slated for independence. Though still small enough to remain under Technology for now, once its scale exceeded $100 million, it would become an independent entity. Not everything was being spun off, however. A new organization was also being created: ID Entertainment. As the name suggested, it would handle entertainment, with ID Software at its core. All game development studios in which Technology held more than 51% ownership would be transferred there. Angel-invested companies could also be incorporated into ID Entertainment after expanding investments if they wished. The music and film investment divisions previously handled by ID Investment would also move there. ID Investment would return to focusing on professional fund management as before. Even after these massive businesses were separated, ID Technology would not be left without revenue streams. Organizations with high future growth potential, such as Lightning Bolt, would remain under Technology. Additionally, a new mobile division would be launched. It would design and manufacture CDMA mobile phones, soon to be commercialized in Korea, as well as GSM phones, the standard adopted in Europe. Most importantly, dividing the businesses did not mean they would become strangers. Since Yoo Jae-won held 100% ownership in all of them, they would remain bound to ID Group, and close cooperation between organizations would continue.
"Is that everything?"
"Yes, well done, Boss."
Remington's words of appreciation came in mid-September. The reorganization policy had been decided early, but numerous details had extended the discussions longer than expected. As the saying went, the devil was in the details. The presidents of the separating companies each wanted to take as many human and material resources as possible. Remington had given what needed to be given and kept what needed to be kept, completing the reorganization admirably.
"Don't you feel any regret?"
From Remington's perspective, the reorganization had been a complete loss. The enormous scale of ID Technology had been cut in half. His own authority had diminished accordingly, yet he had actively led the reorganization nonetheless.
"I feel lighter. As Technology's scope expanded, it was honestly becoming difficult to manage with my abilities alone."
It was a modest statement. Before Remington raised the issue, Yoo Jae-won had not received any reports of significant trouble while running the group. Yet Remington had believed that restructuring the organization quickly was the right direction for both Yoo Jae-won and the group, so he had proceeded.
"Thanks to this, I even became something of a celebrity at school for a while."
What he meant was that his Stanford EMBA classmates had mistakenly assumed ID Group was preparing for an IPO after seeing the reorganization. While ID Group's current value was already substantial, what they valued even more was its growth potential. Yoo Jae-won's personal growth and ID Group's expansion were already at tremendous levels, but what they would achieve in the future was beyond imagination. Wall Street analysts did not hesitate to name ID Group as a company that must be bought if it went public. Even highly conservative credit rating agencies did not hesitate to assign ID Group an A-grade or higher. The only problem was that there had been no way to invest until now. Seeing Yoo Jae-won separate companies from Technology, they assumed he was preparing for an IPO and naturally flocked to Remington for any additional information. In EMBA programs supported mainly by executives, one's presence was proportional to the recognition of the company one belonged to. The larger the company and the higher the position, the greater the presence. Even without this incident, Remington's presence had already been enormous. While some of his classmates were executives at IBM, Intel, or AMD, he was the only one holding the title of president. Moreover, as ID Group's undisputed second-in-command, his situation was different from that of ordinary salaried executives.
"As expected, people with extensive field experience really are sharp, aren't they?"
Yoo Jae-won responded with admiration. While boldly carrying out ID Group's reorganization, he had also considered going public. After carefully reviewing the master plan, the conclusion had been positive.
"Excuse me? So we're going public now as well?"
"Yes. Technology will need to at some point. But for now, I'm thinking of prioritizing Android Corporation."
He said he was "thinking" about it, but it was practically decided. The only cash cow Android Corporation possessed was the Android operating system. It generated revenue through twenty-four adware advertising slots, packages, and licenses. It also had a hardware division producing joysticks, gamepads, keyboards, and mice, though that segment was not particularly large. Previously, it had only posted losses, but recently it had begun generating profits thanks to the Live Force Feedback license. Yoo Jae-won had briefly considered transferring ID Office to Android as well, but ultimately decided against it. ID Office was handled by the Seoul Rodeo team, so there was little meaning in integrating it. Furthermore, Yoo Jae-won's roadmap envisioned integrating the internet with office software rather than the operating system with office software. Therefore, once ID Office grew significantly larger, it would be bundled with cloud services and launched as a separate entity. Even without ID Office, however, Android Corporation's corporate value was astronomical. The operating system installed by default on PCs worldwide was Android, and the internet itself had begun with Android. That was not all. Yoo Jae-won was confident that Android would deliver performance on the U.S. stock market exceeding what Microsoft had shown in his previous life. The IT bubble would reach its peak from the late 1990s to early 2000, but it had begun in 1995. Only by going public now could they properly ride the IT boom and soar to new heights.
"Is that so?"
Remington was slightly surprised by Yoo Jae-won's plan. Yoo Jae-won had never been particularly eager to borrow other people's money to grow the company. Even when the headquarters building—the very starting point of this reorganization—had been discussed, he had shown reluctance when the idea of borrowing from a bank was raised. The trauma of his previous life, when he had borrowed heavily and suffered a major collapse, still exerted a slight influence. Yet Yoo Jae-won had not stubbornly insisted to the end. After carefully calculating that borrowing from the bank to build would ultimately be cheaper, he had agreed to take out a loan. In Korea's case, with the foreign exchange crisis looming, he had been even more cautious than in America, opting for fixed rates and early repayment options. Given how meticulously he scrutinized even borrowing money, Remington had expected him to be somewhat hesitant about going public as well. His proactive stance on this matter felt somewhat unfamiliar.
"It will probably happen around the middle of next year. You can look forward to it."
He had already instructed President Kevin Johnson to begin preparations for the IPO. There were quite a few requirements to meet for even a Nasdaq listing. Once preparations were complete, they would need approval from the U.S. Securities and Exchange Commission. With Kevin Johnson's extensive experience, he would handle it well.
"Well then, shall we get started on today's work?"
Having finished the difficult task, Yoo Jae-won could finally turn to his usual duties.
"Yes, Boss. There are both pleasant and special matters to report."
"Hmm, let's start with the pleasant one, shall we?"
True to his habit of eating the strawberry first when having cake, Yoo Jae-won chose the pleasant matter first.
"Yes, it's a report on New Egg 2. As of yesterday, cumulative sales have surpassed ten thousand units."
Following AMD, HPC CPUs had officially begun sales, and major corporations had started releasing fully assembled products heavily equipped with HPC components. TG had finally launched New Egg 2, the latest all-in-one PC it had been preparing for some time. Yet only a few days had passed, and already ten thousand units had sold. With New Egg 2's minimum price at $3,500, that meant sales of at least $35 million had already been generated. Yoo Jae-won could only marvel at America's overwhelming purchasing power.