[Monetizing the Digital Map]
"Before we finalize the exact revenue-sharing ratios, I'd like to know your future plans regarding the Starlink Map service, as you are currently providing it for North America and South Korea. Limiting it to North America doesn't align with Googl's policy."
Taesik had reviewed the plans with Sane before Googl's Larry arrived, but he deferred the answer to Sane.
"The European region is in the final stages, so we plan to launch the service within this month. We are currently producing maps for China, Southeast Asia, and South America. We plan to finish them within six months at the latest."
"That aligns with our global policy. In that case, let me present Googl's proposal."
"……."
"In addition to the existing 7:3 split, we will provide additional payments based on the cost-per-click for ads, incentives for every 1,000 ad clicks, and fees for when users perform actions desired by advertisers."
Since the exact figures hadn't been calculated yet, Taesik replied,
"To be honest, your proposal doesn't give me a clear sense of the actual revenue. Could you be more specific?"
"We expect our total revenue through Googl AdSense to be around $2 billion this year. We anticipate $300 million in click revenue through the digital map, and it looks like Starlink will take roughly $100 million in additional incentives. For the local guides providing review information, you'll need to set the distribution ratio yourself."
Upon hearing that over $270 million in cash would be coming in every year, Taesik smiled with delight.
"Let me ask one more thing. We can apply the proposed conditions when accessing our digital map through Starlink Map, but what happens when users utilize digital map service information through search?"
"Ah, I missed that. We will apply the same conditions to the ad revenue generated through search as well."
"Excellent. Let's sign the contract. And regarding the equity swap, I would appreciate an answer as soon as possible."
"Internally, we value Googl at $25 billion. How much do you value Starlink Map?"
"I believe the current value is $3 billion, but considering future potential, I think it's at least $10 billion or more."
"Hahaha. There's a significant gap between our sides. Even if an equity swap is impossible, I hope you will honor the parts we agreed to contract on today."
Seeing Larry continue to express resistance toward an equity swap, Taesik decided to make a different proposal.
"Have you set the date for Googl's IPO?"
"Yes. We are planning to go public in the latter half of this year. To be honest, it's difficult to execute an equity swap with Starlink while we are on the verge of an IPO. I should have mentioned this before the contract; I apologize."
"It's fine. Hmm... then, will you be holding preferred shares?"
"Our method of going public will be slightly different. We plan to issue three types of stock, and I will hold Class B shares. The shares I hold have 10 times the voting power, so they can only be held by the founders."
"Then, can I participate in the public offering for the other two types of shares?"
"Are you interested in the public offering?"
"If an equity swap is difficult, I would like to purchase shares with voting rights. Of course, I would have to talk to the investment firm designated by Googl, but..."
As Taesik expressed his intention to participate in the public offering since an equity swap was off the table, Larry began to speak in specific terms.
"We don't intend to follow the conventional IPO method. We plan to determine the public offering price through an auction format rather than through an investment firm, and we intend to put about 9% of our shares on the market this time."
"Then, would it be possible for me to purchase a portion of that 9%? Please don't tell me to participate directly in the auction after I've already proposed an equity swap."
"Hahaha. I can decide that much on my end. How much do you want?"
"Don't worry about the money; just tell me the quantity I can purchase."
"It seems Mr. Kim's personal wealth is greater than I thought. The total value of the shares to be put on the market is approximately $3.3 billion. I will give you about $300 million worth."
Taesik, having learned through news before his regression that Googl's stock price would rise by 18% on the day of the listing from the public offering price, answered immediately.
"$300 million is roughly 1% of the total shares. I'll wire the money tomorrow."
Larry was flustered by Taesik's statement that he would wire the money right away.
"The public offering date is still some time away. You can pay slowly. I'll contact you separately later, so please wire it then. You can probably expect the public offering date to be in August of this year."
Larry and Taesik shook hands, both wearing satisfied smiles regarding today's deal. As Larry left the conference room, Sane approached with a laugh.
"CEO, if we get over $200 million in ad revenue from Googl every year, we can dominate the global digital map market."
"That's true. From now on, I won't even need to make personal investments; Starlink can expand the market with its own capabilities."
"But how should we handle the distribution of ad revenue for local guides? If we take it all, I think participation from local guides will be lacking."
"We should follow Googl's strategy, too. Let's set the ad revenue split at 3:7 and pay it to the local guides. But that conflicts with providing the digital map update service for free..."
"Let the local guides choose. Have them choose between updating via the number of reviews or using a portion of the ad revenue to cover update costs."
"Hahaha. There was a simple way after all. Your words from the past, CEO, about expecting enormous profits if we dominated the digital map market, have become reality."
"Sane, we're not there yet. We haven't even entered the business sector that uses digital maps the most commercially."
"But we've already entered the navigation market..."
"We need to supply directly to car companies, not in the form of navigation systems attached to cars."
"Ah! You mean providing navigation functions as part of infotainment systems, centered around luxury cars?"
"Yes. We must dominate the automotive digital map market."
"Understood. I will use the $500 million you gave me last time and the revenue coming in from Googl to shorten the global digital map creation period."
Taesik asked for understanding from the determined Sane and called Luke at WP Morgan.
"This is Starlink's Kim Taesik. Are you available to talk?"
"Of course. I always welcome calls from investors. Are you calling about the investment in Aepple? Shall I tell you the rate of return?"
"No. I plan to hold Aepple stock for the long term. I would like to ask if it's possible to take out a $300 million loan using Aepple stock as collateral and request a stock contract."
"No problem. The profit from the Aepple stock you currently hold is about 7%, so it's sufficient as collateral; $300 million is no problem at all. I'll process it at the lowest interest rate. When shall we set the loan date?"
"August."
"August... is that Googl? Googl is the only company going public in August..."
"That's right. It's a matter agreed upon to invest in Googl. I won't participate in the public offering, but I've decided to purchase about $300 million worth of stock at the determined average public offering price."
"Ah! It is indeed a company that's becoming an issue among investment firms. Still, it's a relief that you're purchasing at the average public offering price rather than participating directly in the public offering. It is a company with excellent future potential, but the prevailing opinion is that the public offering amount is a bit excessive."
"Please prepare it according to the August schedule and send the necessary documents to Korea."
Having finished negotiations with Googl, Taesik checked the digital map creation plan for Starlink Map and headed straight for Korea. Upon arriving in Korea, General Manager Park Kyung-hoon came to the airport to pick him up.
"General Manager Park, you didn't need to come all the way to the airport..."
"We received an urgent request for cooperation from the NIS."
"The NIS...?"
General Manager Park checked his surroundings and suggested moving to the car to talk.
"One South Korean has been kidnapped in Iraq, and they say Starlink's cooperation is needed."
"Do they need satellite photos?"
"Yes. A request came in for satellite photos by time period and cooperation with Thuraya Telecommunications."
"I can provide the satellite photos, but what is this request for cooperation with Thuraya Telecommunications?"
"They are requesting cooperation from every company that might have contact with Iraqi rebels to verify kidnapping information. It probably went out to all companies conducting business in the Middle East."
Upon hearing the news that a South Korean had been kidnapped in Iraq, Taesik immediately called CEO Ali of Thuraya, hoping for the best. CEO Ali had recently begun full-scale satellite communication services after successfully putting his second satellite into orbit, and he was continuously placing terminal orders with Starlink Communication.
"CEO Ali, congratulations on the successful satellite launch."
"Hahaha. Thanks to Starlink, we were able to start satellite communication services quickly, so we were able to secure more subscribers than expected. And since people visiting Iraq are looking for our Thuraya satellite phones, business is going smoother than expected."
"Congratulations. The reason I called is to ask if you happen to have a way to contact Iraqi rebels."
"No... doesn't Starlink have nothing to do with Iraq? Why is that?"
"The South Korean government is looking for companies that can contact Iraqi rebels. I've also been asked for a favor."
"What should I do? We mainly conduct business with the Iraqi government forces and the multinational coalition forces, so we have no connection to the rebels."
"I'm sorry if this was a burden. It's a government request, so I had no choice but to call. But what do you mean by conducting business with the multinational coalition forces?"
"American and British soldiers also have families back home, so they want to contact them at any time, and since we are the only ones with satellite phones available in Iraq, they have no choice but to use Thuraya."
"Ah! So Thuraya is also enjoying the special effects of war, even if it's only a portion."
"But the US is always the problem. They say a ban on Thuraya satellite phones has been issued verbally to soldiers and American reporters because US operational information could leak to the rebels. It's a shame because even our allies are reluctant to use Thuraya communications because of the US military."
"The multinational coalition forces are people who will return home anyway, so why don't you target the local Iraqi area? Because of the war, communication restoration is delayed, so they have no choice but to use Thuraya communications, don't they?"
"Baghdad has already restored communications, so we are mainly targeting the provincial areas. And since the inventory of satellite phone terminals is running low, I'll be placing another order soon."
"CEO Ali is always helping me. See you next time."
Taesik ended the call with CEO Ali and looked at General Manager Park. General Manager Park comforted Taesik, telling him not to feel burdened and that the NIS would establish countermeasures.
"General Manager Park. We should also start expanding our business area into the defense sector in earnest. Seeing the NIS relying on HUMINT is heartbreaking."
General Manager Park sighed, feeling the current reality of the NIS, which relies on HUMINT rather than information gathering through high-tech equipment.