Chapter 689: Google's Financing Negotiations

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At seven o'clock in the evening, in the West Garden of Hanshan Annex, Guo Shouyun left a banquet area for himself. Compared with the brightly lit East Garden, which has become the most famous private club in San Francisco and even in the entire western United States, the West Garden is much quieter. As for the secretariat in the back garden, although it is also brightly lit, it is relatively quiet.

"Bruce!"

"Steve, David!"

Looking at Steve Schwartzman and David Rubinstein, who strode after getting out of the car, Guo Shouyun greeted them with a smile and hugged the two.

"I heard you're going to be a dad again, congratulations!" Steve Schwartzman laughs.

"Thank you! When the child is born, I must invite the two of you to have a glass of wine!"

"Okay, then we'll wait!"

"Larry, Sergey, long time no see...!"

After a brief conversation, the two greeted Larry Page and Sergey Brin in the back, and the group of five came to the pre-arranged reception room.

"Steve, David, everyone's purpose is very clear, in order to avoid wasting precious time, let's just start, right?" Guo Shouyun said directly.

"Of course, I don't like to waste time!" says David Rubinstein.

Steve Schwartzman nodded in agreement.

"That's good!"

After finishing speaking, Guo Shouyun gave Larry Page next to him a look. The latter meeting, walked to the projector that had been set up next to it, and turned on the PPT about Google on the computer.

"Founded in 1998, Google now has more than 2,500 employees worldwide, interfaces in more than 100 available languages, displays search results in 35 languages, has a data inventory of 3 billion web files, enables users to access an index of more than 8 billion URLs, and provides back-end web query services to other directory indexes and search engines such as Ruby, Amazon, AOL, etc., and is now the most used search engine in the world. ”

"At present, Google has three types of businesses: keyword advertising services, affiliate website advertising services, and cloud computing services. From 2001 to the present, Google has grown at a rate of 234% per item, and achieved revenue of $3.78 billion and net profit of $423 million in the two quarters of 2004, a quarterly increase of nearly 25%. With the application and promotion of the Internet gradually gaining popularity, Google's development has a trend of getting faster and faster. ”

"From the perspective of revenue structure, Google's website itself, Google's advertising revenue from related network sites around the world, and cloud computing are the main sources of Google's operating income, while product licensing rights and other businesses also make Google gain revenue in revenue. From the perspective of 2003~2004, while Google's own website supports Google's main revenue, Google's worldwide network site business has gradually expanded, accounting for 24% of the revenue structure in 2002 to 39% in 2004. In 2003, the cloud computing and big data services industry gradually grew and now accounts for 12% of Google's revenue structure. ”

In addition to revenue, Google's total assets have changed to show a rapid growth trend, from $287 million in 2001 to $4.313 billion in 2004. Google's real estate assets also increased from $54 million in 2002 to $379 million in 2004. ”

"Google's operating cash grew nearly fourfold between 2001 and 2003 with the company's growth rate, with operating cash of $255 million, $595 million, and $1.177 billion respectively. For the two quarters of 2004, it was $1,435 million, and for the full year, it is expected to have operating cash flow of $3,058 million. ”

Regarding IPOs, Google reported $3.78 billion in the two quarters of 2004 and a net profit of $423 million. At a 40x price-to-earnings ratio for the Nasdaq's big Internet companies, it should be valued at $37 billion. Google intends to issue 80 million shares to the capital market with a total share capital of 500 million shares, raising $5.92 billion. ”

"The use of the raised funds, in addition to consolidating the original web search and enterprise service business, half of the funds will be used for big data, digital imagery and satellite positioning services, to help enterprises obtain more accurate data for development, to help individuals obtain the United States, Canada, Australia and other countries, as well as all Google Maps users to obtain accurate location information. ”

After Larry Page finished his introduction, Guo Shouyun smiled and said, "Both, this is the current situation of Google, as well as some plans for future development." If you have any questions, you can ask them now. ”

"$37 billion is the market value of Google's IPO?

Phoenix Bank, Goldman Sachs and Merrill Lynch are Google's IPO underwriters. The former is just that, after all, it is Guo Shouyun's own company, but whether Goldman Sachs and Merrill Lynch can accept such a high valuation from Google, David Rubinstein is really skeptical.

In his impression, Stan O'Neill is not a generous person, and Goldman Sachs CEO Blank Fein is even more calculating.

"They took it, and they had to accept it. Otherwise, I'm just handing over all of Google's IPO underwriting to Phoenix. ”

If he hadn't reached an agreement with Goldman Sachs and Merrill Lynch before, otherwise Google would have listed such a big fat meat, even if it was 25% of each company, he would not be willing to share it with the other party.

David Rubinstein and Steve Schwartzman looked at each other, and the latter said, "In that case, what price can we get if we raise money?"

"$38 per share, 20 million shares each. Guo Shouyun said without hesitation.

"Bruce, are you kidding? We talked for a year, and we agreed to take a step back, and you ended up giving us this condition?" David Rubinstein vented his frustration.

"Bruce, if we invest 20 million shares at $38, how much money will we make even if the stock goes public and the expected rise in the stock after you go public? $40 million? We will personally go to San Francisco to meet you, and just to make $40 million, the Carlyle Group and Blackstone will become the laughing stock of Wall Street and even the global financial community. Steve Schwartzman said solemnly.

Guo Shouyun took out two pieces of tissue paper from the table, and calmly wiped the spit Xingzi that was sprayed on the face by the two of them. After nearly five years in the business world, he has seen a lot of winds and waves, and he has also experienced business negotiations with his sleeves rolled up. The dissatisfaction of the two had long been expected by him, so there was no fluctuation in his heart.

"Then, according to the opinions of the two of you, what kind of conditions do you want?"

For $30 per share, Blackstone and Carlyle each received 50 million shares of Google's original shares. ”

David Rubinstein nodded in agreement.

"If that's the condition that the two of you have taken a step back, then we can end today's negotiations. Guo Shouyun said.

"Bruce, from '03 to now, Blackstone and Carlyle's investment negotiations with Google have dragged on for a year. Now no one wants to waste any more time. So, there's no need to test each other. Let's be more direct. How much do you really want to give?" asked Steve Schwartzman.

"The same thing I want to ask, how much do Blackstone and Carlyle want to pay?"

"$35 per share, 50 million shares!"

Guo Shouyun thought for a moment, "$35 is acceptable, but 50 million shares is too much, up to 22 million shares." ”

Google's original shares are too precious, and every single one is worth fighting for. The same goes for Steve Schwartzman and David Rubinstein. Soon, the meeting room became a battlefield for the three of them.

As time went on, the content of the agreement was gradually determined.

Blackstone and Carlyle each received 32 million original shares of Google at $35 per share. At the same time, the three parties agreed to set aside 15%, 75 million shares as an equity award plan for the management, and the specific distribution will be decided by the board of directors composed of the three parties.

With regard to the Board of Directors, Guo Shouyun is the chairman, Larry Page and Sergey Brin are the executive directors, and Blackstone and The Carlyle Group each appoint a non-executive director to the company's board of directors.

With the signing of the contract, Google's stake distribution has also changed, with Blackstone and the Carlyle Group each owning 6.4%. Harvey Morgan reduced his stake to 2.62% from 3 percent, Larry Page and Sergey Brin from 39 percent to 34.01 percent, and Guo Shouyun's stake to 50.65 percent from 57.95 percent.

If another 75 million shares are taken out to reward management. Then the shareholding of the crowd will be reduced again, Blackstone and The Carlyle Group will be reduced to 5.44%, Harvey Morgan will be reduced to 1.69%, Larry Page and Sergey Brin will be reduced to 28.91%, and Guo Shouyun's shareholding will also be reduced to 43.05%.

In addition, if 80 million shares are to be issued, then the management shareholding will be reduced to 12.6%, Blackstone and Carlyle will be reduced to 4.57%, Harvey Morgan will be reduced to 1.42%, Larry Page and Sergey Brin will be reduced to 24.29%, and Guo Shouyun's shareholding will be reduced to 36.16%!

According to the contract signed by both parties, the company has a lock-up period of 180 days after listing, which is half a year. Within six months, there will be no change in this shareholding structure.

In addition, according to the original investment agreement, 12.05% of Guo Shouyun's 36.16% shares are Class B shares without voting rights. In this way, only 24.11% of the shares that can really support him to exercise power on Google's board of directors.

As soon as Google went public, his stake in the company was almost halved. But it's also something that can't be helped. Even if he didn't want Google to go public, Larry Page and Sergey Brin, as well as many of Google's top executives, wouldn't agree. Similarly, capital, eager to share the fruits of Google's victory, will not agree.

However, with the increase of its assets. Now Guo Shouyun's demand for Google is no longer as urgent as when he was poor and white at the beginning. The reduction of equity is also within the scope of his heart. In addition, after Google went public, he decided to sell all the Class B shares he held before the subprime mortgage crisis, and then take advantage of the subprime mortgage crisis and the overall collapse of the Nasdaq stock market, he bought another 10% of the common shares, so that his shareholding in Google remained above 30%.

Under U.S. securities laws, a 30% stake can have a veto on a company's major decisions. Guo Shouyun wants this power.