Of course Isabella knew about Netflix. In her previous life, by 2025, Netflix had already become the world's largest streaming service provider, and supposedly they had even wanted to acquire Warner.
Uh...
Whether Netflix wanted to acquire Warner in 2025 was not important to the current Isabella.
What mattered was that Netflix's path into streaming had been different from everyone else's. Their streaming ambitions didn't officially begin in the 2006–2007 period.
Their dream of streaming actually dated back to the 1990s.
When Netflix was first founded, its founders originally wanted to build a video website. But internet data transfer speeds and bandwidth costs at the time were prohibitive, so they had no choice but to abandon the idea and pivot into online DVD rentals.
Because they didn't stubbornly fight against the limitations of the era, they grew very quickly. Even after surviving the dot-com bubble crash, they managed to go public successfully in 2002 and turn profitable in 2003.
Then, once 2004 arrived...
Their profits increased tenfold.
And naturally, this made their rival Blockbuster extremely jealous.
So in 2004, Blockbuster officially launched its own online rental business.
Because Blockbuster was an established brand with a more refined service than Netflix's, their massive network of physical stores across the United States allowed them to offer next-day delivery and let users return rented discs at any physical location.
So...
In just half a year, Blockbuster wiped out 10% of Netflix's market share.
It hurt Netflix badly.
But not too badly.
Because they discovered that after the internet bubble collapsed, North American bandwidth costs had fallen dramatically, giving them fresh hope for streaming media. Even though internet speeds still hadn't improved much, they found a possible solution to the inconvenience of downloading videos: build a box.
A box called the "Netflix Player."
That's right.
By 2004, Netflix had wanted to imitate Microsoft and Sony by creating something similar to the Xbox and PS, using hardware as a medium to provide streaming services with resumable downloads.
Although the idea ultimately never became reality...
Because after running the numbers, Netflix realized the "Netflix Player" would have to sell for $99.99 just to break even.
And asking Americans to spend a hundred dollars on a box that could only play videos — not games?
And then charging extra for every video on top of that?
What a genius business plan.
Still, their desire to enter streaming led Netflix to start stockpiling film and television broadcasting rights in 2004.
Because at the time, there were no video websites on the internet.
So the streaming rights Netflix acquired from major Hollywood studios were bought dirt cheap.
And the contracts often lasted twenty years.
That's right!
The reason Netflix managed to succeed in streaming was that they accidentally stumbled into the advantages of the era.
When they bought those licenses, they didn't even know how streaming media was supposed to work.
But in the very next year after they stockpiled the rights...
YouTube burst onto the scene.
Once Netflix realized that 480p resolution had absolutely no impact on internet users who simply wanted to watch videos, they immediately pivoted into WatchNow.
And just like that, the streaming industry's game was essentially over.
Because only two types of players could really compete in streaming:
Either those who controlled content or those who had acquired content rights cheaply — like traditional content companies and Netflix. When their only operating cost was bandwidth, they could enter the game at minimal expense.
Or those who controlled bandwidth itself, like Amazon. They had already begun cloud services in 2005. Before that, like Google, they had taken advantage of the dot-com crash to buy large amounts of dark fiber. Once they effectively became telecom operators themselves, they too could bet on the future at very low cost.
Of course, there was technically a third type of player.
In Isabella's previous life, that was YouTube after being acquired by Google.
Google had fiber. Their bandwidth costs were practically zero.
YouTube had powerful backing. Not only did they not need to buy copyrights — copyright holders had to pay YouTube copyright protection fees.
Honestly.
This was basically a bug in Earth Online's North America server.
Since the third type of player possessed broken abilities because the system administrators had intentionally left a backdoor for their own descendants, no amount of overthinking it would change anything. So Isabella never wasted energy obsessing over things she couldn't alter.
Uh...
Fine...
She admitted the real reason she didn't obsess over it was because right now, she herself was that kind of bug.
Because she currently had cheap and efficient bandwidth.
Because she had already made YouTube free from copyright pain while simultaneously making copyright holders pay her.
So...
Hehe~
Since the streaming giant from Isabella's previous life, Netflix, had already appeared — and since Netflix's plans would seriously threaten Amazon's movie rental business — Isabella could now understand Jeff Bezos's obsession with YouTube.
And as for that...
"Oh, MacKenzie... so Netflix is the real reason you want to acquire YouTube?"
Isabella smiled.
She played with the straw in her cup.
When socializing, she preferred drinking through a straw because it minimized tooth staining from food and drinks.
Raising an eyebrow, she asked:
"Because you don't want Netflix acquiring YouTube?"
"Uh... we do have that concern, but it isn't the main one..." Jeff Bezos's wife, MacKenzie, pondered for a moment before shaking her head. "Because Netflix probably wouldn't make an acquisition offer to you in the first place."
"That's not because they can't afford YouTube."
"And it's not because they dislike YouTube."
"It's because they... probably don't want to own YouTube..."
"What?" Catherine, who had quietly listened the entire time without speaking since sitting down, finally couldn't hold back. "Netflix should still count as an e-commerce company, right? So they..."
"Don't like traffic?"
Catherine felt MacKenzie Bezos's logic was completely backwards.
Her question made Jeff Bezos and the others nod, while Robert Iger stepped in to explain:
"Okay, let me handle this. What MacKenzie means is that Netflix might cooperate with you, but they won't acquire you."
"Because they aren't an ordinary company."
"Their goal... supposedly... is to grow stronger entirely through their own capabilities."
"Uh... I know that sounds a little abstract, but it's true."
"Because... their founder, Reed Hastings, comes from a Boston Brahmin family..."
America may not have an official caste system, but aristocratic family networks absolutely exist.
The elite among elites are the WASPs — White Anglo-Saxon Protestants, the descendants of the people who colonized North America from Britain. Americans openly acknowledge and write about this themselves.
Since colonial expansion originally centered around New England, and New England's core was Boston, the old families that had existed in Boston for generations became the true rulers of modern North America.
This is well-documented, so no need to elaborate further. And Netflix founder Reed Hastings? His family belonged to one of those old Boston dynasties.
Or rather, much of American history was written around families like theirs.
For example, Alfred Loomis — founder of the Loomis Laboratory, who led research into radar, atomic bombs, centrifuges, and EEGs, and funded Einstein, Heisenberg, Bohr, and Oppenheimer — was his great-granduncle.
Another example: Henry Stimson, who served as Secretary of War under Hoover, Secretary of State, wartime Secretary of War during WWII, and overseer of the Manhattan Project, was his great-uncle.
And Roger Sherman — the only American who signed all four founding documents: the Continental Association, the Declaration of Independence, the Articles of Confederation, and the U.S. Constitution — was also on their family tree.
They were the real old-money Americans beneath the Stars and Stripes.
True imperial relatives.
Their sweat was bluer than your blood.
People like that start companies as a hobby.
So whether they ultimately succeed...
Well, success still matters to them.
Because their families are vast. They have countless relatives of the same generation competing for inherited influence and wealth, and they need to build their own factions within the family.
But...
People like them also have their own pride.
If they identified a promising industry, dove into it, and won, they stood above their relatives.
But if their success came from seizing someone else's achievements...
To put it bluntly, if Reed Hastings wanted something, most things in this world could appear before him by the next day.
People like that had long grown tired of simply "taking."
So if Netflix's success came from acquiring YouTube...
He...
Could not accept that kind of success.
Because the friends and peers within his social circle would only say his success was "nothing special."
The moment Isabella heard this, she was genuinely shocked.
Because she truly had no idea about Netflix's background.
But while shocked, she also felt a little regret...
The logic was simple:
If Netflix was essentially a royal enterprise, then wouldn't selling YouTube to Netflix be the best possible option?
To put it plainly, if you're going to cling to someone's coattails, cling to the most powerful pair available.
But after a moment's reflection, Isabella set those unrealistic thoughts aside.
Because whether she could connect with the Boston Brahmins right now...
Wasn't important.
Because while "Harry Potter" was still a pillar of British popular culture, she — tightly bound to "Harry Potter" — already had "the Queen backing her.
And in the Queen's eyes, the Boston Brahmins were nothing more than descendants of those who couldn't survive in England and fled.
Since Jeff Bezos had openly admitted Amazon's desire for YouTube, the conversation could move directly to the core issue.
And regarding Amazon's acquisition proposal for YouTube...
Heh.
Jeff Bezos smiled and said:
"Isabella, Amazon believes YouTube is not a company that can be evaluated by normal standards."
"Its revenue, profits, and valuation can't be calculated using current industry benchmarks."
"Because we understand that YouTube's current revenue and its true commercial value are completely mismatched. Ninety-nine percent of its revenue exists because you defeated Rupert Murdoch. And once you control American bandwidth, the numbers on the profit sheet become whatever you want them to be. If we actually valued it according to the numbers you report..."
At this point, Bezos pointed at the table in front of him.
"I wouldn't even qualify to sit here and have dinner with you."
"Hahahaha!"
Everyone at the table burst into laughter.
Jeff Bezos wasn't lying.
If Isabella really wanted YouTube's 2006 profits to hit one billion dollars, YouTube would instantly become the world's second-largest internet company, far surpassing Yahoo, Google, and Amazon.
After all, Amazon's net profit the previous year had only barely approached two hundred million dollars.
And their P/E ratio exceeded seventy-five times.
Which meant that if Isabella slightly adjusted YouTube's financial statements while applying standard industry multipliers, YouTube's valuation would soar to seventy-five billion dollars.
That's right.
This is literally how financial games are played.
Don't believe it? Look up HP's acquisition of Autonomy.
Inflating valuations through massaged financial reports is practically a European and American tradition.
The essence of finance is, at its core, a form of extraction.
Since a seventy-five-billion-dollar valuation was absurd, Isabella obviously had no intention of cashing out at that level.
And besides, the entire Walt Disney Company was only worth around seventy-five billion dollars at the time.
So Bezos saw no point in wasting time on inflated asking prices.
And because of that...
"So Jeff, what do you think YouTube is worth?"
Isabella sipped her juice through a straw and asked:
"Or rather, how much are you willing to pay?"
"Uh... this time, we brought two proposals..."
Bezos said:
"How much we pay depends on which proposal you prefer."
"Oh? Really? Then what exactly are these proposals?"
Isabella asked.
"The specific proposals are..."
Bezos glanced at his wife.
She immediately picked up the briefcase beside her, took out several documents, and handed copies to everyone present.
Soon, two acquisition plans drafted by Amazon were before Isabella.
The first was the "dehydrated" plan.
Because Amazon already had its own advertising platform — A9.com, essentially the same as Google AdSense — after professionally evaluating YouTube, Amazon concluded that excluding Isabella's personal commercial influence, YouTube's annual net profit should realistically fall between fifty million and seventy-five million dollars.
At present...
That meant YouTube, with one hundred million users, was worth between 3.75 and 5.625 billion dollars, calculated using a 75x P/E ratio.
If Isabella accepted that estimate, Amazon was willing to use the highest valuation as the base — 5.625 billion — and offer a 20% premium.
Meaning they would acquire YouTube for 6.75 billion dollars.
Of course, Amazon didn't have that much cash on hand.
So they planned to acquire YouTube using a cash-plus-stock structure: 20% cash and 80% stock.
And that was only step one.
Step two was this:
The "dehydrated" proposal could only theoretically strip away Isabella's influence on YouTube's revenue. Since YouTube had already reconciled with content capital, and Hollywood companies were buying ads on YouTube because of Isabella personally, Amazon understood that if they acquired YouTube for only 6.75 billion, they themselves wouldn't benefit from that additional revenue.
So regarding this, Amazon devised a method to transfer the income.
Namely, they wanted to imitate how the Disney family operated the Disney theme parks.
On the surface, the Disney family's control over Disney Corporation appeared weak.
But if you carefully examined the related-party transactions, you would discover that a large portion of Disney Corporation's annual profits still flowed into the Disney family's pockets.
What did that mean?
Simple.
Disney's North American parks were extremely profitable, but much of that money ultimately flowed into the Disney family's hands.
For example, park maintenance was handled by companies controlled by the Disney family, not Disney Corporation itself. The Disney family set annual maintenance costs, and Disney Corporation had no say.
Of course, they couldn't make it too egregious.
Another example: park employees weren't directly contracted by Disney Corporation either. Everything was outsourced to companies controlled by the Disney family's Shamrock Holdings fund. Annual personnel fees? Roy Disney decided those too.
Once you structure things that way, opportunities for profit extraction naturally emerge.
And things like fire safety and emergency rescue inside the parks were also...
Ahem.
Same principle.
A company's money is not the shareholders' money.
So any savvy major shareholder will naturally find ways to extract value.
And the most ironic part? It's completely legal.
Since there was already a living example right beside them, Amazon proposed in the "dehydrated" plan that YouTube separate its website operations from its content moderation systems.
Isabella would then create a separate company to control YouTube's moderation business.
That way, if content companies paid YouTube one billion dollars in ads this year...
After Amazon acquired YouTube, they would simply route a slightly larger payment — say, 1.1 billion — into Isabella's moderation company.
And with that, the matter would be settled.
Amazon's second proposal was the "non-dehydrated" acquisition.
Meaning they would fully acknowledge the revenue Isabella personally brought to YouTube.
But Isabella would need to merge American Bandwidth into YouTube.
The process was straightforward:
Merge American Bandwidth and YouTube so that YouTube's operating costs could be transparently calculated.
Suppose YouTube's annual revenue was 1.5 billion dollars, with costs of 1.2 billion.
Then YouTube's value would be calculated as 300 million in profit multiplied by a P/E ratio of 75, equaling 22.5 billion dollars.
Although Amazon's current size made absorbing a 22.5-billion-dollar YouTube difficult, Isabella didn't need to worry about financing.
Jeff Bezos could assemble a financial consortium quickly.
Raising twenty billion dollars from his backers or from Warren Buffett was practically effortless.
And under this structure, the acquisition would be entirely cash-based.
Because there was no realistic way to include Amazon stock in a transaction of this kind.
Or more precisely, if they acquired YouTube this way, Amazon itself would need time to digest the company afterward.
So...
"Isabella, I don't think either of these plans is particularly good."
"The dehydrated plan gets us stock, but the price is honestly low."
"And future conflicts would be easy to trigger."
"Because nobody stays famous forever. Amazon also can't keep funneling Hollywood's ad spending on YouTube to you indefinitely. Once you stop being popular, or once Amazon decides the time is right, they could easily shut down the split structure."
"As for the non-dehydrated plan..."
"Assuming YouTube is valued at 22.5 billion — seventy percent of that is 15.75 billion."
"On paper that sounds like a lot, but we just made five billion dollars in cash recently."
"What exactly would we need that much additional cash for?"
The meeting between Isabella and Jeff Bezos lasted a full two hours.
After clearly explaining both acquisition plans, Bezos took his leave.
He understood that major deals are never settled in a single conversation.
Everyone needed time to think.
And because of that...
The moment they returned to the guest suite, Catherine immediately shared her thoughts on Amazon's proposals.
Although Isabella agreed with her sister and also felt neither proposal was particularly compelling...
"There's still more than just Amazon. Others will make offers too, so don't rush."
Isabella's meaning was clear: compare multiple offers first, then decide.
After all, she currently held the initiative.
Now that YouTube had revenue, even without knowing how to run a company perfectly, there was no need to hurry into selling.
However, just as Isabella expected a flood of offers to follow, after arriving in San Francisco, she suddenly realized her judgment might have been wrong.
Because Steve Jobs apparently had no intention of acquiring YouTube.
"Isabella..."
"It's a pleasure meeting you for the first time."
"Interested in talking about music?"
"Honestly, I'm a fan."
July 11th, Fairmont Hotel, San Francisco.
Not long after meeting, Steve Jobs pulled an iPod from his pocket.
"Your songs are pinned at the top of my playlist."
"I think they're amazing."
"Seriously."