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Chapter 295 Taking a Share in Oracle

The board meeting ended smoothly after Ernst's powerful speech. Afterwards, Jobs gathered a few old friends in his office and, unusually, brought out his treasured coffee.

"Steven, this preferential treatment is way too obvious!" Larry Ellison slumped onto the sofa, pointed to the steaming cup of coffee in front of Ernst, and glanced at the water glass his secretary had brought him on his desk, complaining with dissatisfaction.

"Why do you personally serve this kid's coffee, like you're serving your own father, while we can only have ours made by your secretary? Don't forget, I flew all the way back from Japan."

Larry Ellison's teasing remark elicited a low chuckle in the office.

Ernst, however, paid no attention to Larry Ellison's dissatisfaction. He slowly picked up his coffee cup, first bringing it to his nose and taking a deep breath, looking as if he were filming a high-end coffee shoot.

With eyes slightly narrowed, lips upturned, and even breathing deliberately slowed down, it was as if every wisp of coffee aroma in the air was worth savoring.

He then took a small sip and deliberately let out a satisfied sigh. His affected manner infuriated Larry Ellison, who wanted nothing more than to snatch the coffee cup from his hand.

Ernst glanced at Larry Ellison with amusement, put down his coffee cup, his smile vanished instantly, and his tone became serious. "Larry, what do you think about Oracle's previous cooperation proposal?"

I don't have that much time to let you stall. I need a clear answer now.

After Ernst finished speaking, the atmosphere in the office changed instantly. The atmosphere, which had been somewhat relaxed and teasing, suddenly became serious.

Larry Ellison sat up straight, his previously slouching posture instantly becoming upright. The others also put down their coffee cups, their eyes shifting between Larry Ellison and Ernst, filled with curiosity.

There are stories, stories they don't know.

Larry Ellison was clearly oblivious to the probing gazes of others. He sat there with a furrowed brow and a stiff expression, his fingers tapping unconsciously on the sofa, seemingly deep in thought.

Larry Ellison had long coveted Ernst's companies.

Although Oracle's database business accounts for half of the industry, or even the industry leader, Ernst's Google, Dynamo Games, PayPal and other platforms are potential customers with huge data volumes. If Oracle can penetrate these companies, its revenue can at least reach another level.

Ernst's attitude was clear: the database is the core lifeline of the company, and he could not tolerate being held back in this area in the future.

Even though the two have a good personal relationship now, and often tease and complain about each other like close friends, their so-called friendship is incredibly fragile when it comes to interests. Even family ties can be betrayed, let alone a relationship like theirs that is based on their shared industry.

Larry Ellison's concerns went far beyond these. He had been pondering two key questions: First, would Google enter the database industry in the future? After all, with Google's current technological strength and financial reserves, if Ernst had this idea, he could assemble a top-notch R&D team in no time, and Oracle's market share would likely be significantly eroded.

Secondly, the database currently used by Ernst's subsidiaries is a secondary development based on the Swedish MySQL database. Although MySQL has stated that it is not for sale, no one can guarantee the future situation.

If Ernst were to acquire MySQL someday, he would have to enter this field even if he didn't want to.

Because of these concerns, both Larry Ellison himself and Oracle's board of directors are eager for Ernst to join the Oracle family. This would not only solidify the partnership between the two parties but also avoid potential competitive threats in the future.

Larry Ellison also had his concerns. Just as Steve Jobs was worried that Ernst would dominate Apple, he was also afraid that once Ernst held shares in Oracle, he might eventually become the person in charge of Oracle.

Or what if Ernst didn't mean it that way, but the other Oracle board members seized the opportunity to force him to step down? Wouldn't all his hard work be for nothing?

Moreover, Larry Ellison is a strong-willed person, but Ernst is even more so.

If Ernst wanted to interfere with Oracle's development plans, would those already wavering board members immediately switch sides and stand with Ernst?

These thoughts swirled in Larry Ellison's mind like a tangled mess, and it was precisely because of these concerns that he kept putting it off and didn't give Ernst a clear answer.

Because he was afraid.

A brief silence fell over the office, broken only by the occasional soft sound of the coffee machine.

After a long pause, Larry Ellison took a deep breath, looked at Ernst with a determined gaze, and said, word by word, "I have a proposal: cross-shareholding between Oracle and Google."

"Don't even think about it!" Ernst retorted without hesitation as soon as Larry Ellison finished speaking, his tone resolute and leaving no room for negotiation.

"Cross-shareholding is simply impossible, so don't waste your time on this."

Everyone in the office except Steve Jobs was completely stunned, their mouths agape, speechless for a long time.

They never imagined that Ernst was actually planning to acquire Oracle's shares.

Not to mention the outside media, even industry leaders of their caliber hadn't heard a word about it beforehand.

No wonder Ernst and Larry Ellison have been getting so close lately; it turns out there's something going on behind the scenes.

Everyone turned their gaze to Jobs, their eyes conveying the unmistakable message: Steven, you're really something, you kept it a secret from us so well.

In their view, if Ernst and Larry Ellison could know each other and sit down to discuss cooperation, Jobs must have been the intermediary; he had no reason not to know about it.

Jobs understood the accusations in everyone's eyes, gave a helpless bitter smile, and shrugged, his expression as if to say: I'm a victim too!

Ernst did mention it briefly before, saying that if he wanted his companies to use Oracle products, he would have to invest in Oracle, but nothing came of it after that.

He can't just go around telling the world that Ernst is going to acquire Oracle shares because of one random, unfounded remark from Ernst, can he?

Ernst completely ignored the flirtatious glances exchanged among the people in the office. His gaze was fixed on Larry Ellison as he said in a serious tone, "Larry, I'm not afraid to be blunt with you. If Oracle refuses my investment, I will simply start a new company and officially enter the database field."

"With the internet developing so rapidly and the data volume growing larger every day, I don't have that much time to waste with you."

Ernst's words were already giving Larry Ellison plenty of face. Everyone present knew perfectly well that it wasn't that Ernst was unwilling to cross-shareholding with Oracle, but rather that Larry Ellison and Oracle were simply not a good match.

Despite Oracle's market capitalization approaching $20 billion and its status as a major player in the industry, it still lags far behind Google.

Although Google is still a private company, even its current valuation is far greater than Oracle's.

Especially after the release of the iPod, its stunning design and powerful features quickly sparked a global craze, which boosted Google's valuation to over $50 billion.

In the words of Wall Street analysts, "Does Google still need to go public? It's like a Tesla behemoth growing in seclusion; although it's still growing, it already possesses a deterrent force no less than any adult behemoth."

Who would have thought that Google's iTunes business, which was previously ridiculed by Wall Street and global media and considered by many to be a money-loser, would actually boost Google's valuation by nearly $20 billion in just half a month?

The most disruptive aspect of Google Tunes is that it broke the long-standing album sales model of record companies.

In the past, record companies would package multiple songs into albums to sell in pursuit of higher profits. Even if consumers only liked one or two songs, they would have to pay a high price to buy the whole album.

Google Tunes, however, took the opposite approach, adopting a single-song purchase model, bringing the way songs were sold back to the early days of vinyl records, where each song was a separate entity.

However, this approach, which was criticized by outsiders as a step backward, precisely hit the pain points of consumers.

Music lovers who previously couldn't bear to buy the whole album because they only liked one or two songs suddenly had a strong desire to buy it.

In addition, since the iPod can store thousands of songs, consumers feel that it would be a waste of its storage space if they didn't install more songs after buying it, so they frantically buy singles on Google Tunes.

According to statistics released by Google, combined with current iPod sales, the average iPod user has purchased 171 songs on Google Tunes.

At $0.99 per song, each iPod could generate $169 in sales for Google Tunes.

Don't forget that Wall Street's sales forecast for the iPod this year is between 2200 million and 2400 million units. Even if we take the lowest estimate of 2200 million units, the sales revenue from iPod users alone would be as high as $37 billion.

Although neither Google nor MGM is publicly listed, and their specific profit-sharing model is unknown to outsiders, it is generally believed in the industry that Google iTunes can bring Google at least $5 million in profit per year.

Moreover, everyone knows that the iPod is not a short-lived product that will only be sold for one year. If the number of iPod users worldwide reaches 100 million, 300 million, or even 500 million in the future, what an astonishing figure the annual revenue of Google Tunes will be.

In terms of future imagination alone, Oracle is no match for Google.

Even if we assume, hypothetically, that Ernst agrees to acquire a portion of Oracle's shares through a stock swap, Google's institutional shareholders would never agree.

Even if they temporarily compromise under Ernst's tyranny, they will definitely come knocking on his door to confront him afterward.

Unless Ernst is willing to trade his personal Google shares for Oracle, but would Ernst do that?

If Oracle didn't have a future business in cloud computing, how much would its market value be? He wouldn't do something that loses money.

Ernst's acquisition of Oracle, or rather his entry into the database field, was entirely driven by a desire to build a fortress for cloud computing. Just as e-commerce relies on real-time user feedback, databases require massive amounts of data and graphics.

Larry Ellison's expression shifted repeatedly before he finally conceded, "One billion shares. Oracle will issue you a maximum of one billion shares, no more."

Does one billion shares sound like a lot? Most companies have been listed for over a decade or even decades, and their total share capital may not even reach one billion shares.

But these billion shares are nothing to Oracle.

In order to expand its share capital and lower the share price threshold, Oracle conducted a large number of rights issues, stock splits and new share issuances last year. Now Oracle's total share capital has exceeded seven billion shares.

Even if one billion new shares are issued, it will only account for about 12% of its total share capital.

Ernst lowered his head and pondered for a moment, then nodded to Larry Ellison, "Okay, we'll do it your way."

""

He didn't dwell too much on the number of shares. For him, as long as he had a certain say in Oracle and could ensure the security of his company's database, that was enough.

He had no interest in participating in Oracle's day-to-day operations; he was merely planning the integration of future industry clusters.