July 27, 2006. Sunday. California. YouTube Headquarters.
At this point, YouTube was still a startup. It had only existed for a year, but its growth had surpassed all expectations, creating a noticeable disconnect between its office environment and its actual strength.
For example, the conference room Isabella was sitting in was still only eight square meters — the same as the one she had seen at the beginning of the year.
Sitting in a place like this, honestly — even the bathrooms in the hotels she stayed at while traveling were bigger. Every house she had bought after becoming famous had bathrooms bigger than this. Among all her family's properties, only one bathroom was smaller than YouTube's office: the old family house her late father had left behind. That house, however, had an incredible location — right next to Buckingham Palace.
Still, Isabella wasn't complaining about the environment. She didn't have time to.
After taking the seat Chad Hurley offered her, Isabella looked around the room, lightly coughed, and said, "So... let's hear your thoughts. Which proposal do you think is better?"
Isabella could personally control the entire sale process, since she held 70% of YouTube's shares. No matter who she chose to sell to, Chad Hurley and the others couldn't stop her. But if she wanted to continue controlling YouTube after the sale — and as someone with no time to personally manage the company — she needed their input.
After the deal, these people would exercise management authority on her behalf. Everyone had already signed the relevant agreements beforehand.
Isabella's question made the YouTube founders exchange glances. Having already reviewed all the offers three days earlier, they said:
"Isabella, let's go through them one by one, in chronological order."
"First, Amazon."
"Honestly, Amazon's proposal is the one we dislike the most."
The YouTube founders really did dislike Amazon's offer — not only because Jeff Bezos had been evasive. During his conversations with Isabella, he had never proactively mentioned how YouTube could direct traffic to the A9 search engine.
This wasn't exactly a secret within the industry. Everyone knew Amazon had a search engine, and that it wasn't solely meant to serve their e-commerce platform — it was expanding outward, encroaching on Google's territory.
But knowing something and openly discussing it are two different things.
If Amazon was already hiding details in a deal this important, could their offer really be called sincere? Who would believe that?
More importantly, Amazon's two proposals failed to balance the interests of the YouTube founders and Isabella.
"Isabella, if we choose Proposal One, you can smoothly enter Amazon's board of directors, but YouTube's selling price becomes far too low. Thirty percent of 6.75 billion is only 2.025 billion. Compared to the other offers starting at over 20 billion, the gap is enormous. We honestly can't accept that."
"And if we choose Proposal Two, it basically means cashing out and walking away — which doesn't align with your interests."
"So unless Amazon comes up with a new offer, we can only pass."
Steve Chen's conclusion made Isabella nod.
"Also," he continued, "both we and our legal team believe YouTube absolutely cannot place purchase links for movies or TV shows beneath videos."
"If we do that, YouTube will get sued."
"Fundamentally, YouTube doesn't own the copyrights to any films, television dramas, or variety shows. Under those circumstances, we can't allow commercial purchase links to appear directly beneath related videos."
"Adding links and promoting products can only be actions taken by users themselves, and any profits should belong to those users. If YouTube takes a cut, there is legal risk."
"For example, users could launch a class-action lawsuit claiming we're profiting from their activity. Or Hollywood companies could sue us again, arguing that by placing targeted links we clearly have the ability to identify infringing content — yet deliberately tolerate it. Those lawsuits would probably end in settlements and never produce a final ruling, but a company that constantly makes headlines over copyright infringement will suffer in growth."
Steve Chen stopped speaking.
Isabella narrowed her eyes slightly and asked, "From a legal standpoint, adding those links is genuinely a problem?"
"Yes," Steve Chen replied. "If we can accurately attach promotional links to videos, it proves we have anti-piracy capabilities. At that point, even protected by safe harbor provisions, North American content companies could sue us all over again."
"If that's true, would Amazon not know this?" Isabella asked, puzzled.
Her meaning was simple: if pirated YouTube videos couldn't legally carry official purchase links, then Amazon's proposed business model was fundamentally flawed. Amazon's legal department wasn't staffed by decorative houseplants billing hourly. So perhaps they had another plan?
"We don't know," Steve Chen shrugged. "We can't see Amazon's real blueprint. But we're certain they noticed the problem long ago and simply chose not to raise it."
"Just like A9.com — they only talked about its advertising business. They never mentioned it also had search capabilities."
Since Amazon insisted on concealing things, Isabella stopped dwelling on it and eliminated them from the candidate list. When people introduced through mutual connections still insist on hiding things, the conversation becomes pointless.
With Amazon out, everyone shifted attention to the second company: Microsoft.
Jawed Karim picked up the thread:
"Microsoft's offer is the highest of the three. Partnering with them would greatly benefit us financially. And Isabella, Bill Gates also promised you a board seat at Microsoft, which matches your desire to keep controlling YouTube. But this deal only looks like a win-win on the surface."
"Because Bill Gates never promised you would continue controlling YouTube."
"And on Microsoft's board, even holding a seat, your actual power would be very limited."
"If you don't believe us, ask Steve Jobs. Or DreamWorks shareholder Paul Allen."
What Jawed Karim said was true. The entire world knew Bill Gates was a smiling tiger with a long, questionable history.
Back then, for the sake of his own interests, he had nearly forced Paul Allen out. Had Allen not come from a strong background, he would have been pushed out of Microsoft long ago. It was precisely because Gates couldn't remove Allen that, after Microsoft went public, he chose to reconcile instead. Microsoft had no dual-class share structure. Had Gates kept fighting Allen, capital groups looking to destabilize Microsoft could have rallied around Allen to challenge Gates' authority — and Gates might have ended up like Steve Jobs, expelled from his own company.
When Bill Gates could stab his childhood friend twice in the back for money, he might invite Isabella onto Microsoft's board today because of YouTube — and just as easily force her out tomorrow.
"So you're recommending we pass on Microsoft too?"
Isabella smiled at the three men. Jawed Karim nodded.
"Yeah. But if you do, your income drops by over a billion dollars," Isabella said. "Google and Microsoft's offers differ by several billion. When your combined ownership is 30%, can you accept that gap?"
"Honestly... we can't really accept it..."
The three founders glanced at each other. Then Chad Hurley laughed and said:
"Microsoft's total offer for YouTube and American Broadband is 25 billion dollars. Assuming they valued American Broadband at the same 1.5 billion as everyone else, Microsoft's offer for YouTube alone is still 3.5 billion higher than Google's. Thirty percent of 3.5 billion is 1.05 billion. That money alone could support our grandchildren's financial freedom."
"But — even though my wife's father and Sergey's wife's father are friends — I still want to say Google's proposal suits us better. Their offer genuinely benefits both sides."
Chad Hurley's reasoning was straightforward.
First, by using Google B shares to acquire YouTube, Isabella's interests gained enormous protection. Google B shares carry real voting power. Once Isabella entered Google holding them, she would have actual authority on the board — far more meaningful than a Microsoft board seat.
Second, Google promised that unless Isabella chose to leave, they would not interfere with YouTube's operations, allowing her to build it into her own media platform.
Finally, though Google wasn't yet as large as Microsoft, it had every potential to become so. Google was essentially a second-generation startup, built on Stanford's resources and the American tech ecosystem. In their view, the only scenario where Google could truly fail was if America itself ceased to exist.
In Chad Hurley and the others' eyes, aligning with Google was Isabella's best option.
As for what they would personally gain — on the surface, choosing Google over Microsoft seemed to mean losing a billion dollars. But the math wasn't that simple.
Google would never use only Google B shares to acquire YouTube. Companies with dual-class share structures must simultaneously issue low-voting shares whenever they issue additional high-voting shares. If Google used only B shares, the number of A shares would explode. And if only B shares were used, Isabella would become Google's largest voting shareholder.
Google's total market value at the time was around 100 billion dollars. If Isabella received all Google B shares, she could practically turn around and fire Sergey Brin and Larry Page herself.
So when Sergey Brin, Larry Page, and Eric Schmidt collectively controlled only 55% of Google's voting power, each of them diluting another 10% was already at the limit.
In practice, Isabella would receive a mix of Google A and B shares — and the YouTube founders would receive Google B shares. Since Isabella wanted power and the founders wanted money, a simple arrangement would let everyone profit:
After the deal, the founders would exchange their Google B shares for Google A shares, transferring the B shares to Isabella. With right-of-first-refusal agreements already signed, and assuming Google's stock continued to rise, Chad Hurley and the others stood to earn even more.
They had no intention of cashing out entirely. They believed both YouTube and Google would keep growing.
"Okay. Let's go with Google."
"And don't worry — I won't force you to sell your shares. If you want to hold for appreciation, hold. Whenever you want to sell, come find me."
Isabella made the decision, settling YouTube's future. Her words immediately brought smiles to Chad Hurley and the others' faces.
In truth, Isabella had always intended for YouTube to go to Google — not to preserve the trajectory of her previous life (once YouTube's value had been pushed to 20 billion through her own actions, the original timeline was long gone), but because, among the three bidders, Google was the most transparent. And more importantly, Google was genuinely willing to hand over real influence. That mattered most.
For the current Isabella, making money was trivial. Turning money into power was the hard part.
With the company's future settled, the atmosphere in the conference room immediately lightened.
"Then I'll leave the merger negotiations to you three?"
Isabella smiled at them.
"No problem!" Chad Hurley nodded immediately. "We'll talk with Google tomorrow. Sergey and I know each other, so it'll move quickly."
That completely undisguised networking made everyone burst out laughing.
Just as Isabella was preparing to leave after nearly a month of nonstop work — planning to find somewhere to vacation — she suddenly remembered she hadn't yet told Chad Hurley and the others about Apple's partnership proposal.
"Oh... Steve Jobs really is an old-school businessman. This proposal is both exciting and infuriating at the same time."
The moment Isabella finished explaining, Jawed Karim shook his head.
"Apple doesn't want to spend money, but they want us to launch on Apple TV — which means we bear the development costs and the future maintenance costs. And Steve Jobs says this will bring us more users? The problem is Apple TV hasn't even been released yet. If the product becomes a hit, sure, we gain users. But if it bombs completely, all that development work is wasted."
"Still, even though Apple's proposal defies normal business logic, we have to accept it, because..."
"We want to become media."
Jawed Karim shrugged.
In the YouTube founding team's view, Steve Jobs' proposal was essentially demanding something for nothing. With Apple TV's market share impossible to predict, no one knew how many users a launch on that platform would bring. If Apple TV sold like the Apple Pippin, the development work would be pointless.
But if YouTube's goal was becoming an internet media company, embracing Apple TV was non-negotiable. In media, the entire point is omnipresence — the broader the coverage, the better.
YouTube entering the living room mattered more than how many users it gained. Once YouTube appeared on ordinary people's televisions, the public would understand:
"Oh... so YouTube is the same kind of thing as ABC, NBC, and CBS? Not just some video website?"
Only after that idea took hold could YouTube truly become an internet media company.
Steve Jobs had precisely identified YouTube's need — then secured traffic at essentially zero cost. A classic move.
Since Isabella preferred to act as a hands-off decision-maker when knowledgeable people were around, she left the details to the team and headed off to South America for a long-overdue vacation.
Meanwhile, whether because Google genuinely didn't want YouTube falling to Microsoft or Amazon, or because they truly needed video as a traffic gateway — negotiations between the two companies' legal teams moved with unusual speed.
In just one week, both sides finalized the paperwork.
Google agreed to acquire YouTube entirely through stock, using Google's July 31, 2006 closing valuation of 115.512 billion dollars as the transaction basis.
Since Isabella held 70% of YouTube, after the transaction she would obtain approximately 10.33% of the new Google shares. Because 30% of that portion consisted of Google B shares, her voting power inside Google would be approximately 5.5% — given that one B share equaled ten votes, while one A share equaled one.
As for American Broadband, Google would acquire it separately after completing the YouTube purchase, and Isabella would receive only Google A shares for it. Since the new Google would be worth roughly one hundred times American Broadband, 1% in Google A shares would provide limited voting power.
In total, after all transactions concluded, Isabella's influence inside Google would settle at approximately 5.9%.
That wasn't enough to challenge Sergey Brin, Larry Page, and Eric Schmidt — who, even after diluting their stakes, still retained roughly 50% voting control. But it didn't matter. For the current Isabella, 5.9% was enough.
She had no intention of owning Google itself. She only wanted equity, voting rights, and a board seat — the foundation of real capital.
Previously, her entertainment assets had been effectively strangled by content capital. She could influence many media outlets, but those same outlets could turn against her at any time.
That would change after this deal. It would be perfectly reasonable for Google to protect a major shareholder who held significant voting power and could generate massive content traffic. If enemies tried to attack one of Google's own major shareholders — fine.
Your media outlets can produce damaging stories? Google's trending searches can do the same.
Control over public discourse is something that can never be surrendered. The weapon of public opinion may go unused — but it must exist.
Since Google was a publicly traded company, major acquisitions had to be disclosed publicly. When August 4, 2006 arrived, people across North America — and around the world — saw the following headline:
[Google Reaches Acquisition Agreement with YouTube, Purchasing Company for 20 Billion Dollars]
The moment the news broke, the world fell silent.
Not only because Google was already legendary. Its 2004 IPO had been the third-largest in NASDAQ history. Within three months of going public, the stock price had more than doubled. Within ten months, Google had surpassed Time Warner to become the world's largest media company, and had already overtaken IBM to claim the title of world's third-largest technology company, with Cisco and Microsoft seemingly within reach.
But also because YouTube's momentum over the previous six months had been even more extraordinary.
At the start of the year, it had shattered the conventional logic of internet user acquisition the moment it officially launched. Midway through the year, it confronted major capital players head-on and left traditional capital reeling in a single exchange. And just one month earlier, it had surpassed one hundred million users, becoming the world's largest social networking site and video platform.
When YouTube's growth had already outpaced ordinary people's comprehension — when no one had even started speculating about an IPO —
Google had already acquired it for 20 billion dollars.
"What the hell... this has to be fake news, right???" "OMG... Google bought YouTube??? For 20 billion dollars???" "Why would YouTube let itself be acquired by Google???"
Because negotiations between Google and YouTube had been confidential throughout — and because the major traditional media outlets, owned by Disney, Viacom, General Electric, Comcast, and Time Warner, had no interest in reporting on Isabella — ordinary people had no idea any of this was happening.
So when the news finally broke, the shock was total.
Then, before people had even processed the headline for two seconds, a second realization struck:
"Wait — wasn't YouTube backed by Isabella?"
"If Google acquired YouTube, that means Isabella just got paid."
"If they paid 20 billion, how much did she make?"
"She owned at least 20%, right? She said herself during the trial she bought 10% from Sequoia Capital."
"So if she owned 20% of YouTube... a 20 billion dollar acquisition means..."
"She made 4 billion dollars???"
"Oh my God."
"Isabella made 4 billion dollars in half a year???"
"I can't breathe."
"I think I'm suffocating."