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Chapter 344 - Chapter 344 - Investment In People

Simon spent a week in San Francisco, only to find that laying out his plans for the internet industry involved more problems than he had imagined.

Just as the founders of America Online's predecessor conceived of online music and network games in the early 1980s, in the internet field, ideas aren't actually that valuable.

The mature internet industry models Simon remembered probably had countless similar ideas circulating long before the industry's rise.

The key is execution.

Therefore, whether it was Ygritte or America Online, beyond Simon, the helmsman of the general direction, what was most needed was a management team with truly efficient execution capabilities.

Speaking of which, many companies Simon invested in based on his foresight were, in the final analysis, investments in management teams.

More precisely, they were investments in people.

Simon invested in Microsoft because Microsoft had Bill Gates; he invested in Nokia because Nokia had Jorma Ollila; he invested in America Online because America Online had Steve Case.

During his week in San Francisco, Simon also extended an invitation to John Chambers, who led Cisco to its peak in the original timeline, hoping that after Westeros Company achieved absolute control of Cisco, Chambers would take charge of the company.

Because of this philosophy, Simon easily realized that Tim Berners-Lee, who was currently in charge of Ygritte Company, might be very suitable as Ygritte's Chief Technology Officer, but as a technology-focused executive similar to Apple co-founder Wozniak, he was not capable of overseeing Ygritte Company's overall management.

Beyond Tim Berners-Lee, Simon urgently needed a 'Steve Jobs' for Ygritte Company.

Of course, this was just a metaphor; Simon would absolutely not invite Jobs, whom he couldn't control at all, to manage Ygritte.

It was hard to imagine where Jobs, with his reality distortion field, would lead the company.

On the plane returning to Los Angeles from San Francisco, the date was Sunday, April 29th, 1990.

Simon didn't go to the suite in the front cabin but sat casually by a window in the middle of the cabin where the setting sun could reach, pondering the search for a manager for Ygritte Company while reviewing the week's work.

This mainly involved the re-adjusted development plans for Ygritte and America Online after achieving absolute control of America Online.

As for Cisco, Simon intended to hand it over to John Chambers, who had confirmed his joining.

The two had discussed Cisco's future development direction in detail, and Chambers' management philosophy of customer-first and rapid expansion through mergers was largely consistent with the information Simon remembered, so Simon did not make unauthorized adjustments.

Of course, to facilitate Cisco's expansion, the company would also need to go public as soon as possible.

For Ygritte and America Online, after gaining absolute control, Simon wasted no time in segmenting the two companies' businesses, insisting that America Online divest its content business and focus on its role as an internet service provider.

Ygritte, on the other hand, would be responsible for content.

The online games and other content America Online originally provided to customers were already value-added services beyond basic access services.

Because the current user base was too small, only over 60,000, it was not yet possible to cover expenses through online advertising.

Being able to divest these services would actually save America Online money.

Of course, Steve Case didn't see it that way, especially after seeing many of Simon's content ideas for Ygritte Company.

However, Simon didn't give Case many options.

One major reason why America Online rapidly declined after the dot-com bubble burst in the original timeline was that its business scope was too broad and comprehensive, yet it lacked core competitiveness in any area.

It couldn't compete with latecomers like Yahoo in content, and its access services were easily surpassed by traditional operators with infrastructure advantages.

Consequently, its peak market value of hundreds of billions of dollars shrunk by over 90% in just a few years.

This time, Simon's positioning for America Online was that of a precise internet service provider, maximizing this business in the early stages of internet development.

Then, it would closely follow the major trend of the convergence of telecommunications, television, and internet networks around the turn of the new century, choosing the opportune moment to acquire a well-established traditional telecom operator to solidify its industry position.

Beyond long-term planning, considering its own scale, in the next few years, America Online will first expand its business in California on the West Coast and the coastal metropolitan area from Boston to Washington on the East Coast.

The vast central regions, including the Great Lakes and the equally prosperous southern coast, can temporarily only be left to other companies.

Most of the US population is concentrated on the East and West Coasts, and these two major regions are the most vital.

As long as America Online can gain a firm foothold in these two regions, it can easily expand into other areas.

To save costs, America Online will temporarily rent line networks from traditional operators as much as possible for terminal networks, except for the top-level servers.

Of course, this must be temporary.

To avoid being throttled by traditional operators like AT&T, gradually building and improving its own network is essential.

However, this clearly means a very large expenditure, often running into billions of dollars, making it unrealistic to achieve in the short term.

Another reason for America Online's rapid decline in the original timeline was its overreliance on its content advantages.

Even after traditional operators started offering ISP services, it still rented others' lines, sluggishly failing to improve its own network, and even neglecting to keep up with the promotion of high-speed broadband, with predictable consequences.

In addition to these main plans, the confirmed proposal states that America Online will open 100 internet cafes in cities like Los Angeles, Boston, and New York in the coming months.

This plan was naturally proposed by Simon.

Simon's first contact with the internet in his previous life was in an internet cafe.

However, the internet cafe industry did not become popular in North America.

The main reason was the difference in consumption power.

Just like VCRs, video rental stores across the ocean should be booming now, but in North America, this is simply not needed because the penetration rate of VCRs in North American households has already exceeded 70%.

Similarly, since their birth in the 1970s, the number of PCs owned by American households has also been rapidly increasing.

The main reason they didn't become as widespread as VCRs in just ten years is that PCs in this era lacked sufficient entertainment value and were more geared towards office use.

The explosion in PC ownership among American households coincided precisely with the rapid popularization of the internet in the 1990s.

Although Simon's week-long trip to San Francisco drew the attention of many media outlets to his ongoing development of new technology companies like America Online, Ygritte, and Cisco, most Americans still had no concept of the internet at this time.

Simon's idea of internet cafes was not for profit, but primarily to promote Ygritte and America Online to the public.

As long as people could experience the benefits of internet applications like online news, email, online games, online forums, and personal homepages in internet cafes, they would naturally consider getting internet access at home.

One hundred internet cafes, even with a minimum budget of $100,000 per cafe, would require a total expenditure of $10 million.

If America Online were to pay for it entirely, this expense alone would account for 20% of Westeros Company's $50 million investment, not including the development of the internet cafe management system and subsequent operating costs.

Such a massive 'marketing expense' was completely beyond America Online's capacity.

When Simon left San Francisco, Steve Case was already contacting various PC manufacturers to find partners.

These 100 internet cafes, which were not intended to make money, would also operate independently as a subsidiary of America Online, and might even be packaged and sold off at an appropriate time.

Simon also personally called Bill Gates to ask if he was interested in sponsoring a batch of the latest Windows 3.0, or if he could ask Apple.

He then successfully secured 1,000 free operating system software licenses.

Given that Simon personally initiated the project, there would likely be many manufacturers willing to participate, which should eliminate the most expensive PC equipment costs.

Even the internet cafe operating system software could be outsourced to interested software companies.

America Online's anticipated expenses would only be for internet access and venue rental for the internet cafes.

The money saved could be used by America Online for the development of its core business.

As for Ygritte Company, Simon spent most of his week focused on this, which is why he was eager to find another suitable manager for Ygritte, and even Tim Berners-Lee, who was quite self-aware, agreed with Simon's view.

The most important thing for Ygritte Company was to confirm its revenue model.

The same point remains: any company that wants to grow and thrive must have a sustainable revenue and profit model.

Portal website memberships, email fees, online news subscriptions, and so on, all of these had been considered by the Ygritte Company team.

Simon, however, rejected them one by one without hesitation.

To quickly attract users, basic content services like portal websites, email, and online news must be free.

Although the upcoming Malibu Daenerys Studios installed enterprise email, Simon also rejected Ygritte Company's idea of developing its email system, for which it already held technology patents, into the enterprise market.

This matter might be handed over to other companies through technical licensing and equity participation, but Ygritte must adhere to Simon's mass-market development strategy.

Simon's vision for Ygritte Company over the next decade was that of an internet technology company disguised as a network media platform.

Network media was a concept that could greatly stimulate corporate stock prices in the 1990s.

However, from the fate of Yahoo and America Online in the original timeline, one can see that network media is not sustainable.

The internet giants that ultimately survived and thrived, whether Amazon, Facebook, or Google, are all essentially technology companies.

Creating platforms through technology and attracting a sufficient volume of users to produce 'content' themselves is the way for internet companies to dominate.

In comparison, the business model of network media is to produce content independently to meet user needs.

This was feasible in the early 1.0 era of the internet, but in the 2.0 and 3.0 eras, after the explosion of internet users, it is simply impossible to satisfy the content needs of billions of internet users with one's own efforts.

Since revenue couldn't be generated quickly through portal websites, email, and other services, everyone's attention naturally turned back to software.

Ygritte Company's server software, web design software, and other applications based on World Wide Web technology have been confirmed for commercial operation.

Simon's initial idea was to promote the graphical IE browser for free, an idea that was not accepted by the Ygritte Company team.

Most employees believed that the software, which the company had invested heavily in developing, was excellent and even had the value of creating a new era, so it should not be free.

After several discussions and even arguments, Simon also had to compromise.

Or rather, Simon admitted that his ideas were too radical.

Just as he hoped America Online's internet access service should be monthly rather than time-based, this idea is not realistic, at least for the next few years.

Before the user base develops to a certain scale, America Online's internet access service will still be charged by the hour.

On the other hand, the market capacity for applications like server software and web design software developed by Ygritte Company is very small in the short term, and is even largely limited to use by Ygritte Company's own team.

Therefore, IE, an end-user application software with an anticipated wide audience, becomes crucial.

The final agreed-upon plan is that the IE browser will also adopt a paid model.

This is also the most practical way for Ygritte Company to quickly generate real revenue.

However, compared to Netscape's browser pricing of up to $50 in Simon's memory, the team ultimately set the retail price of the IE browser at $15, with an even lower installation fee of $10 per copy for internet service providers like America Online.

A price of $10 per copy is actually very affordable for America Online.

Moreover, Ygritte Company will not only authorize America Online as a service provider.

After all, America Online's expansion focus in the next few years will only be limited to a few densely populated states on the East and West Coasts, and most areas of the United States will still be inaccessible.

Seeing America Online's development, other internet service providers will surely emerge.

Although Ygritte Company will freely authorize most World Wide Web technologies, Simon will not allow a second manufacturer for core website and terminal application software for a long time to come.

As long as the World Wide Web can achieve the same popularization speed as in the original timeline, software revenue alone will be sufficient to cover most of Ygritte Company's development expenses.

In the short term, this is all that can be done.

Ygritte Company has completed the construction of two data centres on the East and West Coasts, capable of accommodating 100,000 users, and internal testing has also been completed.

Although they are meagre compared to the large data centres Simon remembered, they are sufficient to handle current internet user access.

In addition, Ygritte Company has compiled a complete set of World Wide Web technical documentation, which will be available for free download on the Ygritte portal website and official websites of some partner universities.

The team also plans to publish physical books related to World Wide Web technology as a supplement.

At the same time, a simplified version of World Wide Web application software, for student use only, will also be launched in various North American universities.

Next, America Online and Ygritte Company only need to work together to fully promote the World Wide Web.

The upcoming May is destined to be the beginning of an era in many people's memories.

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