Deus ex Machina
The expert on dismantling chaebols greeted him. “Congratulations, Mr. Chairman. James Carnini from Time magazine.”
What awaited Yoo Jae-won upon his return to the United States was an interview with Time, the premier weekly of the era. His schedule had been set at least a week in advance, yet the Time interview had been arranged only three days ago.
“Yes, pleased to meet you.”
“How does it feel to become the world’s richest person while breaking the record for the youngest ever to do so—and to have achieved it through your own efforts rather than inheritance?”
The reason for the Time interview was simple: Yoo Jae-won had officially become the world’s richest man. Unofficially, it was not difficult to find people wealthier than him. European royal families, Middle Eastern oil magnates, and American dynasties that had amassed enormous fortunes through monopolies in the 1900s before vanishing from public view all possessed staggering wealth. What kept their fortunes hidden was that they never listed their companies and employed proxies to conceal their identities. The fact that a mere few hundred individuals controlled more than half of the world’s capital was bound to spark discussion, which was perhaps why official rich lists came into existence—to rank only those whose wealth was forced into the open while allowing the truly powerful to remain in the shadows.
Yoo Jae-won had previously avoided such rankings because his companies remained unlisted, but that was no longer possible. The scale of wealth revealed through the listing of Android Corporation, followed by Nextcomcast’s IPO and the merger with Time Warner, instantly surpassed every previous official ranking. In other words, while Yoo Jae-won had been in Korea, the merger between Nextcomcast and Time Warner had been successfully completed.
To commemorate the occasion, Time had selected Yoo Jae-won as the cover model for its issue two weeks from now and prepared a special feature. The interview for that feature was now taking place in the headquarters office of ID Technology.
“I have quite a few questions for you today, Chairman Yoo.”
“Ask away. I’ll answer anything I can.”
“Our readers are particularly curious about your vision for the newly merged company, Time Warner Nextcom, as well as your aggressive stance toward Korea’s foreign exchange crisis and your homeland.”
The Time journalist was exceedingly polite. As he noted, the merged company had been named Time Warner Nextcom. The implication was straightforward: Nextcom had been the acquiring party. When drafting the merger agreement, the side that secured management control had agreed to yield on the naming rights. Time Warner had assumed it would retain control and made the concession, only to find the new entity named Time Warner Nextcom instead.
It was the largest merger in American history. Based on closing prices just before the merger, Nextcom was valued at $72 billion and Time Warner at $69 billion, giving the combined company a market capitalization of $141 billion. Yoo Jae-won held 41 percent of the shares, which on paper amounted to $56.4 billion. That stake alone did not guarantee control. Yet he had become chairman of the merged entity thanks to friendly shares—specifically, Vice Chairman Ted Turner, who had transferred his entire 9.2 percent stake to Yoo Jae-won. That pushed him just over the 50 percent threshold. Combined with proxy votes from minority shareholders, Yoo Jae-won ultimately secured a stake in the high fifties. It was no wonder the interviewer’s demeanor remained impeccably respectful. After all, Time itself was now part of the newly formed Time Warner Nextcom, and its new owner was none other than Yoo Jae-won.
The merger agreement included a clause respecting the existing management of each affiliate, so employment and operational policies remained unchanged. Still, the clause was not binding; if Yoo Jae-won chose to exert pressure, there would be little anyone could do. Fortunately, he had no intention of aggressively intervening in the media sector, an area outside his expertise. Time Warner’s current executives were competent enough. Instead, his plan was to fuse the internet with traditional media and leverage Time Warner’s vast cinema, music, and broadcast libraries to create an entirely new dimension of media services.
“Haha. If I call it a secret, your readers will be terribly disappointed, won’t they?”
The Time journalist startled at the word “secret,” then relaxed when he saw the smile on Yoo Jae-won’s face.
“We intend to create an entirely new service using the music catalog that Time Warner Nextcom now controls.”
“Ah, you mean Next Music, the service already operating in Korea?”
Yoo Jae-won raised an eyebrow at the reporter’s reply. One expected a certain old-fashioned air from a Time journalist, and the man seated before him did indeed appear to be well into his forties. At that age, resistance to new technology would have been understandable, yet he had immediately connected the idea to Next Music, a service currently running only in Korea. Perhaps he had crammed for the interview, but the device on the table was not a reporter’s recorder—it was a Tiffany phone, and the recording application was already running. That confirmed he was genuinely interested in IT.
Once Yoo Jae-won recognized this, his attitude naturally warmed.
“Yes, that’s right. Korea is an excellent testing ground for cutting-edge technology. Its people approach new technology with curiosity rather than rejection and adapt quickly. The country’s geography has also produced outstanding internet infrastructure, and computer penetration is very high. That is why ID Group has been piloting new services in Korea first, refining them before wider release.”
Yoo Jae-won was working hard to reshape perceptions of Korea—and he was not exaggerating. The Kookmin PC initiative had been a resounding success, and broadband internet now reached nearly every household. While foreign coverage during the foreign exchange crisis painted Korea as a nation on the brink of riots, that was pure exaggeration. Pessimistic headlines continued to pour out, and the economy had certainly lost some of its dynamism, but no riots had occurred. Instead, the entire nation had united with a renewed determination to rebuild. The gold-collection campaign was still underway. Though its stated purpose was noble, in practice it had mainly benefited those who bought gold rather than those who donated it. To prevent only the quick-witted from profiting, ID Investment announced it would purchase gold at more than 10 percent above the international market price, moved by the spirit of the movement. Since gold was already part of ID Investment’s portfolio, the arrangement benefited both the Korean people and the fund.
In any case, IT innovations were spreading rapidly in Korea, and Next Music was beginning to show results. The inclusion of AAC and MP3 playback in the Tiffany phone had been especially effective. People no longer found it strange to listen to music on a mobile phone rather than a Walkman-style cassette player. Inspired by the Tiffany phone, several small venture companies had also released reasonably polished MP3 players. Naturally, Saehan—the company that had created the world’s first MP3 player—was already on Yoo Jae-won’s shopping list. Saehan had welcomed ID Group’s acquisition offer with open arms and was now a subsidiary of ID Technology.
“Of course, the service in the United States will differ somewhat from the Korean version. We plan to apply the lessons learned in Korea to deliver an even more advanced offering.”
Yoo Jae-won envisioned a far more robust music business in America than in Korea. To that end, ID Technology was developing a secret weapon. The prototype had already been surpassed; the retail version was nearing completion and mass production was being prepared. This had prompted talk of building a factory in China, but Yoo Jae-won insisted on Korean production. Chinese wages were currently the lowest in the world, but they would rise sharply in the twenty-first century. Outsourcing to proven Korean electronics manufacturers was simply more convenient.
After an extended discussion covering IT technology and the fusion of new and old media, the journalist moved to a new topic.
“This next question may be somewhat sensitive. We cannot avoid mentioning Korea’s foreign exchange crisis. In particular, there are rumors that you have abandoned your Nasdaq investments and are preparing large-scale investments in Korea. Could you address those rumors?”
Yoo Jae-won had expected this line of questioning.
“Yes, the rumors are true.”
His straightforward answer left the journalist, who had been listening intently, visibly frustrated. The most difficult interviewee was always the one who answered in monosyllables. The conversation had been lively when discussing IT, yet now it had turned curt.
“If this were any other magazine, I would stop there. But since Time is now part of my family, I’ll share something you won’t hear elsewhere.”
Yoo Jae-won’s skill at managing tension was masterful. The journalist’s expression transformed the moment the conversation resumed.
“Even without Korea’s crisis, I would have begun winding down my IT-sector investments around this time.”
“What do you mean?”
“The Nasdaq index alone shows we are in an overshooting phase. I do not doubt the fundamentals of the IT sector, but when even unproven companies are rising along with the rest, it is time to judge performance by actual results. I have approached the situation more conservatively than most.”
“As the owner of the world’s largest IT group, the word ‘conservative’ seems ill-fitting.”
“I agree. But there is a vast difference between developing and selling IT technology myself and investing in Silicon Valley companies.”
“Ah, of course.”
“While I was liquidating those investments, the unfortunate foreign exchange crisis struck Korea. The country had no choice but to accept emergency funding from the IMF and is now struggling to correct the structural problems that had long been criticized. It was difficult to turn away.”
It was the same argument he had made to Vice Chairman Remington and IMF Managing Director Camdessus, yet this time it carried a different nuance.
“That said, American coverage makes it seem as though Korea is about to collapse. Having seen the situation firsthand, however, I do not believe it is quite that dire. There are latent bombs, of course, but now that they have been identified, I expect the Korean government to handle them wisely.”
“Latent bombs?”
“Even in these circumstances, some large corporations are still hiding massive non-performing loans. There seems to be a strange belief in Korea that certain companies are ‘too big to fail’ and can rely on government support. That attitude will lead to serious trouble.”
“If such risks remain, isn’t investing in Korea dangerous?”
“Not at all. A risk that has already been identified is no longer a risk. If the Nasdaq is overshooting, Korea is in the midst of a genuine bargain sale. The market has overreacted. Because of the foreign exchange crisis alone, even fundamentally sound companies are being beaten down far too harshly. I can say with confidence that anyone who invests in Korea now will be laughing the loudest in the twenty-first century.”
“Hmm. Making such a bold claim about something so uncertain is risky—especially since this interview will be remembered by Time’s subscribers and preserved as a record.”
“All the better.”
The moment the twenty-first century began, the Nasdaq IT bubble would burst. Korea, by contrast, would recover, and the difference would be clearly visible in bank balances.
“Besides, I do not make empty promises.”
“What do you mean?”
“Using the capital I earned from Nasdaq investments, I have created something called the White Tiger Fund.”
“The White Tiger Fund?”
“The white tiger is one of Korea’s national symbols. As the name suggests, the fund acquires undervalued Korean assets and companies with strong turnaround potential, restores them to health, and then sells them for profit. We are starting with $20 billion, and we will soon open the fund to private investors as well.”
“Twenty… twenty billion dollars?”
The journalist’s reaction was familiar. Everyone who had heard the plan—Remington, Choi Kang-wook, even his parents—had responded the same way. Yoo Jae-won continued as though it were nothing unusual.
“Yes. I am confident it will become ID Investment’s fourth major success. After reading this interview, some will no doubt ask why I chose Korea over the Nasdaq. For me, however, Korea is simply the more attractive investment destination.”
“Well, while expert opinions will be needed, I must admit I find it difficult to agree at this moment.”
“That is understandable. In the end, however, account balances will prove whose assessment was correct. What is clear is that now is the time to buy Korea.”
Faced with Yoo Jae-won’s confident expression, the Time journalist finally nodded.
The interview continued at length. Afterward, the cover photoshoot began. Time had dispatched a photographer in addition to the interviewer. The shoot went smoothly. Thanks to his daily exercise routine, Yoo Jae-won looked good in any outfit. The photographer was skilled as well; after adding a few lights to the study where Yoo Jae-won usually worked, he captured striking images of him standing beside an iWorks workstation.
Thus the interview concluded.
Time passed, and the issue featuring Yoo Jae-won’s face on the cover was distributed across the United States and the world. In one corner of the striking cover was the subtitle “Deus ex Machina.”
Having received this somewhat excessive title, Yoo Jae-won visited, at roughly the same time, a special facility deep within ID Technology headquarters. Though not as heavily secured as the high-tech research institute, the site still operated under strict security protocols for confidential work. There, Dr. Lisa Su and her research team proudly presented their recently completed creation.
It was a small, flat rectangle—smaller than the palm of a hand—with a large LCD screen embedded in its surface.