America's No. 1 financial conglomerate

Chapter 302 The Excitement and Pain of Wall Street

Not only was Gerstner amazed by Google's speed of innovation and its innovative thinking, but Wall Street was also surprised by a hint of unease.

Inside Goldman Sachs' office, Henry Paulson sat behind a large mahogany desk, his brow slightly furrowed, listening to his secretary's detailed report on the Google Connect business.

In the landscape of Wall Street, Paulson has seen countless transactions worth billions of dollars. What kind of storms hasn't he weathered?

But today, Google has left him with a sense of bewilderment that defies common sense.

"In addition to the basic Google Connect membership, Google Connect also offers a variety of value-added membership services such as Red Diamond, Yellow Diamond, and Green Diamond."

"Red Diamond corresponds to Google People's Showcase service."

"Wait a minute." Paulson suddenly raised his hand to interrupt his secretary. "Google People Show? What's that? Are they going to put on some kind of talent show?"

In Paulson's mind, internet companies were nothing more than software developers and Google Assistants. How could they be involved in show business? This was beyond his understanding of the internet business.

The secretary quickly explained, "This isn't some kind of talent show. Simply put, it provides users with a range of virtual character items, including clothing, accessories, and hairstyles, to create personalized virtual avatars. Users can purchase these virtual items to dress up their chat avatars, and even their Google account avatars can be linked to this virtual avatar for a unified display."

"This red diamond is equivalent to a premium membership. After activation, users can not only freely change some basic virtual accessories, but also enjoy exclusive discounts if they want to buy accessories that can only be obtained by paying money."

Buy clothes for a virtual character? Paulson's eyes widened, his mouth gaped open, and his expression was as if he had seen a ghost. "It's not a character in a game, it's just a little avatar! Who would have the time to spend real money to buy clothes for a virtual avatar? Is Google out of its mind?"

In his view, this kind of business was simply absurd and completely defied normal business logic; he simply couldn't understand why anyone would pay for such a thing.

Just as Paulson was still complaining about Google's bizarre business practices, his secretary's next words hit him like a loud slap in the face, leaving him speechless.

"According to data we obtained from within Google, in just the past seven days, the number of new Red Diamond members has exceeded 270,000. At this rate of growth, we expect to easily surpass 400,000 today."

"How much?" Paulson sat bolt upright in his chair, his eyes fixed on his secretary, his voice trembling with shock. Is money really that easy to make these days?

He could hardly believe his ears. Goldman Sachs launched a new financial product, and to attract 400,000 customers, it usually required a huge investment of human, material, and financial resources, and a long period of promotion.

But Google is something else entirely. With just a small virtual membership service, over 200,000 people activated it in seven hours, and an estimated 400,000 people are paying to use it every day. It's simply outrageous.

"We expect to surpass 400,000 today," the secretary said again, meeting Paulson's shocked gaze. "Moreover, our people at Google have heard that their internal assessment is that the number of Red Diamond users should remain stable at between two and three million per month."

"This is just a conservative prediction based on current Internet user data. If the number of Internet users continues to grow, this number may increase significantly."

"Is the price for a Red Diamond membership also $4.99 a month?" Paulson quickly recovered from his shock. As a seasoned financial professional, money was always his most sensitive topic.

After the secretary nodded in confirmation, Paulson quickly did a mental calculation.

If there are 3 million people a month, and each person pays $4.99 a month, then the monthly revenue would be 300 multiplied by 4.99, which is approximately $15 million. Over a year, that would be $180 million.

This is just the income of a Red Diamond member. What about the value-added services such as Yellow Diamond and Green Diamond?

If all companies could perform like this, Google's revenue would be unimaginable.

Paulson took a deep breath, suppressing the turmoil in his heart, and waved his hand, signaling his secretary to continue.

"Next is the Yellow Diamond membership, which corresponds to the interface customization service. For example, the interface of the Google Chrome browser that users often use..."

Google Messenger, Gmail, and other interface customization options are available free of charge to VIP members, granting them access to various skins, fonts, and other decorative materials.

"Users can change the interface style at any time according to their own preferences, creating a unique and personalized user experience."

The secretary explained methodically, and even gave several common examples to help Paulson understand better.

But the more Paulson talked, the more he felt that the world was beyond his comprehension. He couldn't imagine how anyone would pay money for these things.

"And what about green diamonds? What's so special about them?"

"Green Diamond mainly focuses on the music field, and in this area, Google mainly collaborates deeply with its own Google Tunes."

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"When purchasing songs on Google Tunes, Green Diamond members can not only enjoy discounts, but also have access to a number of exclusive services such as free online music streaming and lossless music downloads."

"There are quite a few users who enjoy listening to music now, especially young people, and the demand for high-quality music is increasing. Therefore, the popularity of Green Diamond membership is not low at all, and it is even more popular than Red Diamond. According to current statistics, the number of Green Diamond membership activations is the highest among all Google Connect value-added services."

"I heard that Google is currently planning to launch a Black Diamond membership in collaboration with YueDong Games. It mainly involves developing a series of casual mini-games for users. Black Diamond members can play these games for free and also receive exclusive in-game items and benefits."

Upon hearing this, Paulson could no longer remain seated. "Do you have more detailed data regarding these value-added services?"

The secretary shook her head helplessly, a hint of regret on her face. "There isn't more detailed data yet. Google's system can only show the real-time number of activations; they haven't even compiled or made public the detailed hourly statistics. However, what I do know is that the total number of activations for these various value-added services has exceeded 98, and that number is still increasing every minute."

Paulson opened his mouth, as if to say something, but found that he couldn't make a sound.

He was completely stunned by the number: 98 new members activated in just half a day.

What does this mean?

At this rate, even if it doesn't reach 200 million in a day, 180 million members can be easily achieved.

180 million a day, how much would that be in a month?

Even if the number of new memberships decreases in the future, there should still be at least 1500 million new memberships per month, right?

With each member paying $4.99 a month, these value-added services alone could bring Google at least $7500 million in revenue, totaling $9 million a year.

The Internet is still in its early stages of development, with the number of users continuing to grow and the market potential enormous.

If the number of users increases several times over in the future, and this data grows fivefold, then the annual revenue would be $45 billion.

Paulson gasped as he thought about this.

How much profit does Goldman Sachs, a top investment bank on Wall Street, make in a year?

Google can rake in billions of dollars a year just from these seemingly insignificant value-added services.

Is this robbery?

What left Paulson speechless was that the money was given to Google willingly. Isn't that infuriating?

"By the way, have you roughly calculated Google's financial statements for last year? Especially the revenue data for the GG business."

Since its launch, Google AdWordsGG has attracted much attention from the investment community due to its innovative model and precise positioning.

Almost every month, Google's revenue from its GG business is growing at an exponential rate. This astonishing growth momentum has made all investment institutions eagerly anticipate Google's financial statements.

The entire Wall Street investment community is now waiting for Google's financial statements, with the main focus being on the revenue of Google's business.

Even if there are significant losses in other areas, it doesn't matter, since it's normal for internet companies to invest heavily in research and development and promotion in their early stages of development.

If Google's revenue exceeds market expectations, then Google's valuation will inevitably surge.

This report is so closely watched for another important reason: it directly determines the pricing of Google's IPO.

Barring any unforeseen circumstances, Google will definitely launch its IPO this year. Everyone is now speculating about which month the playboy tycoon and internet mogul will set for Google's IPO.

Google's IPO will undoubtedly be one of the most watched capital market events on Wall Street this year, perhaps even the most important one.

"The detailed financial statements are not yet fully available and are expected to be released by the end of January. However, we have a preliminary outline of the data, and barring any unforeseen circumstances, Google's Google revenue this year will exceed $12 billion."

"So much?" Even though Paulson was prepared and knew that the revenue figures for Google's GG business would be explosive, he still couldn't help but be shocked when he heard the specific figure of $12 billion.

Many established traditional companies may not even achieve this level of revenue in a year, but Google has achieved such high revenue with just one GG business. This growth rate is simply too exaggerated.

The secretary shook her head with a wry smile. "I also heard that Ernst is very dissatisfied with this, feeling that Google's GG division has not fully explored the potential of the AdWordsGG system and believes there is still a lot of room for improvement."

"What?!" Paulson's eyes widened even further upon hearing this. "AdWordsGG has only been online for a short time! At most, it's only been six months. And he's already achieved $12 billion in revenue in just six months, and he's still not satisfied? Why doesn't he just rob the Federal Reserve's coffers?"

In Paulson's view, $12 billion in revenue in six months was already outrageous enough; he certainly hadn't expected this number, which was much higher than he had predicted.

Little did he know that Ernst was comparing Google's GG system to the original historical trajectory.

He recalled that Google's revenue reached $30 billion in the first year of its Google services launch. Although Google's Google system was launched much earlier now, and revenue figures may fluctuate due to factors such as market conditions and the price per Google device, Google's user base is obviously much larger and its market coverage is much wider. That's why he is not satisfied with the current $12 billion in Google revenue.

At this moment, Paulson's fingers tapped incessantly on the table, his brain working at lightning speed. He roughly calculated the accounts in his mind, and a look of excitement gradually appeared on his face.

Judging from Ernst's level of dissatisfaction with Google's GG revenue, it means that there is still a lot of room for improvement in Google's GG business revenue.

Paulson estimated that Ernst's goal was for Google's GG revenue to bring in at least $30 billion a year, and possibly more.

Add to that the value-added services of Google Connect, as well as the revenue from other businesses such as Google Tunes and Gmail Enterprise. If you add all of these together, Google's annual revenue must exceed ten billion US dollars.

A company with annual revenue of ten billion US dollars, which is not yet publicly listed, has virtually no end to its future growth potential.

If Google's market value doesn't reach $1500 billion after its IPO, then all the employees on Wall Street might as well jump off the roof; living would be a waste of food.

Moreover, given Google's current business development and growth potential, a market capitalization of $150 billion is a conservative estimate, and it may even be higher, with a breakthrough of $200 billion not being impossible.

But just as Paulson was basking in the glow of Google's high valuation, a crucial question suddenly occurred to him, and his face instantly turned grim, a pang of heartache rising within him.

Because Google has not yet established an employee stock pool, and most importantly, Google's employee stock pool is different from that of the previous Leap Games.

Google has several co-founders. According to publicly available information, several senior Google executives, including Larry Page, Sergey Brin, and Jason Arlington, are co-founders of Google.

This means that the equity these co-founders receive will not be as easily given away as Ryan Ruiz of Leap Games. When Ernst makes his big move, Wall Street investment institutions will have to share the profits.

A company with a market value of $1500 billion, even if you give up 0.1% more of the shares, that's still $1500 million. Just thinking about it makes my mouth water.

This loss must be transferred to retail investors, and the losses must be made up through stock price manipulation after Google's IPO.

With this in mind, Paulson immediately ordered his secretary, "You should arrange for someone to gradually release the data and development of Google's value-added services. Don't release everything at once; maintain the buzz and keep the market paying close attention to Google."

The secretary understood Paulson's meaning, of course. This was a common information disclosure strategy on Wall Street: by gradually releasing positive news, they could stimulate market sentiment and increase the company's visibility and valuation.

The secretary nodded and turned to leave the office to carry out the order.

"Come back!" Just as the secretary was about to walk out of the office door, Paulson suddenly called out to him, "First, help me register a Google account, and also activate all those Red Diamond, Yellow Diamond, and Green Diamond membership value-added services for me."

I want to investigate myself to find out what exactly is it that allows Google to rake in billions of dollars a year.