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Chapter 396 - Chapter 396 - Housekeeper's Business Proposal

After dinner, Simon and Janette chatted with her parents about recent events.

Around nine o'clock, Simon and his wife did not return to their villa nearby, choosing instead to stay overnight at the mansion.

Upstairs in the bedroom, Simon emerged from the bathroom after showering.

He saw Janette, already in her pyjamas, holding a pillow and standing by the bed, staring at him intently.

She said, "I'm sleeping with Auntie tonight".

Simon paused for a moment, then continued to towel his wet hair, smiling as he nodded, "Alright, after you've squeezed me dry for so long, I could use a night off".

Janette, however, didn't move, still gazing steadily at Simon.

Simon nonchalantly pulled the towel on his head forward a bit, covering his eyes as he continued to dry his hair.

Janette wrinkled her nose.

Seeing him come forward and embrace her, she instinctively leaned into him.

Because of the pillow between them, she even extended her face forward slightly, cooperating as he kissed her.

"Goodnight".

"Mhm, goodnight".

As she agreed, a deeper vexation settled in her heart.

That little rascal.

He's actually letting me go sleep with Auntie.

Even a little white lie would have been nice.

Or, he could have just been a bit unreasonable, pinned me to the bed, and I would have pretended not to know anything.

After saying goodnight, Simon released Janette, hung up his towel, and seeing that she still hadn't moved, said nothing more.

He simply reached out, took the pillow from her arms, and tossed it onto the large bed.

Then, he casually wrapped an arm around Janette's waist, threw her onto the large bed as well, and pounced.

However, a little over an hour later, Janette still managed to slip out of the sleeping man's embrace and quietly left their bedroom.

The next day was February 3rd, Sunday, 1991.

Since leaving Los Angeles on January 20th, the couple had been on vacation for two weeks.

Inside the Boeing 767's cabin, after take-off, Simon sat in the front study, reviewing the accumulated documents from this period.

Janette sat opposite him, chin propped on her hand, watching her husband, her bright eyes flitting with various small emotions.

Simon was actually aware of Janette's quiet departure last night.

He just didn't know what Veronica had said to Janette.

Now that she wasn't speaking, Simon didn't actively bring up the topic.

He truly didn't know how to respond.

Across the desk, Janette observed her husband for a long time, finally letting out a soft sigh.

She truly didn't understand what had happened.

Auntie had clearly been wronged, yet she was still siding with him.

Just like herself.

Was it only because of last time?

Janette involuntarily touched her wrist.

That little rascal.

You truly are a devil.

She silently decided that she would come to Melbourne as little as possible in the future, or at least, not let him come alone.

Sighing helplessly, Janette picked up a folder from the desktop and began to read it.

This was a statistical report on the increase in free trial users for America Online in January.

Janette was aware of America Online's free trial program, but looking at the 2.3 million user reservations in the folder and the actual number of only 810,000 official installations, she was somewhat surprised.

She raised the folder to Simon opposite her and asked, "Why is there such a big difference?"

Simon looked up, having just read that document.

He said, "The main issue is manpower. For this trial, America Online initially prepared 5,000 official and temporary installation personnel on the East and West coasts. According to the initial expectation, they should have been able to complete approximately 1 million user installations per month.

However, in reality, things were a bit more difficult than imagined, and many problems were encountered. You can look at the more specific numbers: out of the 810,000 installed users, 390,000 came from areas operated by Bell Atlantic. This was mainly because Bell Atlantic actively cooperated with us to solve problems with lines and equipment, and even seconded some employees for this purpose".

As Simon spoke, he also felt a sense of emotion.

The early acquisition of Bell Atlantic had now proven to be a completely correct move.

America Online had just signed a 10-year exclusive agreement with the three major regional operators last year, which meant Bell Atlantic was unable to get involved in internet access services.

A few months later, seeing the sudden explosion in internet access users, with the number of reserved users in a single month exceeding 2.3 million, the three major operators clearly began to regret signing the original agreement.

It's worth noting that while various telecom operators had dabbled in free user trial events, none had experienced such an astonishing volume of user reservations.

The number of reservations in just one month, if all converted to official users, would already be equivalent to one-tenth of the total user base of the three major operators.

The user base of the three major operators, however, had taken decades of accumulation to achieve.

Over the past month, the three major operators even discovered that some users, in order to get a free trial opportunity, specifically transferred accounts from other smaller telecom operators in the region to their own, which was even more surprising.

The American telecom industry has a very open competitive environment, and a single city might have several telecom operators.

Of course, the main thing was still leasing the line networks of giants like AT&T, and then conducting their own telephone business.

Regional telecom giants like Bell Atlantic, Bell Pacific, and NYNEX had always hoped to squeeze these smaller operators out of the market, but because the latter often had lower charging costs than themselves, it was usually difficult to achieve this goal.

Now, America Online, which was also dependent on them, had unexpectedly propelled this matter forward.

The senior management of the three major operators probably understood that cooperating as much as possible with America Online's expansion would also be very beneficial for increasing their own user numbers.

However, while the reasoning was clear, actually implementing it was not so easy.

No one wants an outsider to build a villa in their backyard that is even more beautiful than their own house.

Even if it can't be stopped, even if the other party has paid, and even if such a villa in their backyard might attract many paying visitors, the homeowner would probably find it very difficult to convince themselves to cooperate without any reservations.

Of course, after the official takeover of Bell Atlantic was completed in January, the company had become part of the Westeros system, and management like Raymond Smith could achieve this.

The other two, Bell Pacific and NYNEX, were not so willing.

The original agreement clearly stated that, in addition to developing the line network, if America Online wanted other additional support, it would need to pay more.

Due to the huge capital investment, America Online's management implemented this free trial program with a 'succeed or die' mentality, so it was naturally impossible to invest more budget in these operators.

This ultimately led to the situation in the first month where 390,000 of the 810,000 installed users came from Bell Atlantic's actively cooperating operating areas.

After listening to Simon's explanation, Janette continued to flip through the documents in her hand, and soon asked, "A budget of $100 per household, isn't that a bit too low? Can it be achieved?"

Simon said, "$100, with $20 for labour, $30 for network fees, and the remaining $50 for equipment and software. However, this figure is based on the expectation of eventually converting to official users".

For this free trial program, America Online mainly hired and trained 3,000 part-time temporary installation employees from university campuses.

Based on a piece-rate system, the cost to install one household was $20.

The penetration rate of household telephones in the US exceeds 90%.

This trial program also had specific selection criteria: users had to be customers of the three major operators, eliminating the need for additional line installation.

Installation only required connecting equipment to the computer at the user's telephone terminal.

In terms of equipment and software, it mainly included modems, interface network cards inserted into the motherboard, network card drivers, and browser software.

This set of equipment and software was actually very expensive, with a total cost approaching $200.

If a trial user did not convert to a full-fledged user, America Online would reclaim this equipment.

Even for users who converted and then cancelled, the same process would apply in the future.

Because the reclaimed equipment could be reused, America Online, based on a 25% conversion rate, set an average budget of $50.

Strictly speaking, this actually had the implication of some accounting games.

Ultimately, it was still because America Online faced immense financial pressure.

For the same reason, despite having a terrifying 2.3 million reserved users, America Online's management had no intention of increasing the number of workers.

On one hand, it was not easy to achieve, as even those temporary hires had undergone training; on the other hand, it was naturally due to cost.

Furthermore, they also had to consider whether this enthusiasm was just temporary.

Rashly increasing the workforce would be troublesome if user enthusiasm for free trials cooled down.

Next, America Online planned to achieve its projected monthly installation volume of 1 million households by more rational screening and allocating existing reserved users.

Then, for the IPO three months later, the market would give America Online a very excellent valuation.

On the other hand, experiencing the difficulty of queuing to get a trial opportunity could also, to a extent, encourage trial users to convert to full users.

After all, people tend not to cherish things that are too easily obtained.

If one has waited in line for over a month and finally becomes a trial user, then after the month expires, seeing that some people around might still be waiting anxiously, the urge to give up would definitely diminish significantly.

Strictly speaking, this could also be considered a form of alternative scarcity marketing.

After 17 hours of flying, they arrived in Los Angeles.

Due to the time difference, it was still Sunday morning, February 3rd.

After resting until the next day, Simon flew to San Francisco early on Monday morning.

This time it was for work.

After a series of subtle pressures from his housekeeper, Alice Ferguson, Simon finally received two business proposals, two proposals that Ygritte, America Online, and even Bell Atlantic regarded with great importance.

The two business proposals were an online payment system and an online software store.

The former was actually similar to what would later become PayPal, and the latter was equivalent to Apple's App Store in Simon's memory.

Moreover, the two business proposals were actually complementary.

Ygritte Company had always been exploring reliable commercial profit models.

The World Wide Web software was one aspect, and under Carol Bartz's management over the past year, it had already begun to show results.

As for the portal website, in addition to advertising, Jeff Bezos had also been considering other profit methods.

Although the software and network departments cooperated very smoothly under Simon's forceful mediation and suppression, it was simply unrealistic for the software department to support the network department in the short term.

If a dependency truly formed, the portal website was also destined not to last.

The online payment system and online software store, continuously refined by the housekeeper with inspiration from Simon, gave Jeff Bezos hope.

They even made America Online and Raymond Smith of Bell Atlantic see the immense commercial potential they contained.

Ygritte Headquarters near Stanford University.

In the conference room, Simon, Jeff Bezos, Carol Bartz, Steve Case, John Chambers, Raymond Smith, and other senior executives from various companies sat on both sides of the conference table, listening as the housekeeper personally introduced her business plan in front of the projector and answered everyone's questions.

...To build an online payment system, without corresponding products, it's impossible.

Therefore, we must build a complete online consumption ecosystem.

The online software store is the most important part of this.

The market potential of computer application software is evident just from the development of Microsoft and Oracle over the past few years...

...Furthermore, the market has never lacked excellent commercial software, especially some highly specialized small application software.

The main constraint on their development is sales channels.

The increasingly large PC game market is the same.

Many professional software designers, even just one or two people privately, can create a product whose quality is no less than that of a professional game company, but because commercialization is too difficult, they also cannot distribute and sell their games...

...Ygritte, however, possesses an unparalleled channel advantage.

Utilizing the World Wide Web platform, we can transcend mainstream operating system platforms like Apple's Macintosh system, Microsoft's Windows system, and the traditional DOS system.

With this online advantage, we can easily distribute and sell application software, PC games, and other products to users on these platforms at a very low cost, and the company can take a share from this...

...In addition, once the online payment system is completed, using this system, we can further promote online bill payment, online retail, and other services...

The housekeeper continuously switched PowerPoint slides, speaking for twenty minutes, and finally stopped.

Everyone patiently waited for the elegant short-haired lady to pick up the water glass from the table and take a few sips.

Raymond Smith was the first to ask, "Alice, you just said that the user accounts for the online payment system would be linked to physical credit cards. Have you considered the difficulty of achieving this goal?

For years, commercial banks have racked their brains trying to enter the American Express payment system, but without success. Similarly, how do you ensure that commercial banks will open payment interfaces to us?"

Upon hearing this question, Alice Ferguson scanned the conference room, her gaze finally resting on Simon for a moment.

She then said, "The entire Westeros system, including the recently acquired Bell Atlantic and MCA, has an annual cash flow of tens of billions of dollars. The demand for commercial loans is also very considerable. I believe this is a client any commercial bank would strive to secure. For such a client, if they make a request to open an online payment interface, I don't think it would be too difficult".

Everyone was stunned by this answer, then broke into smiles.

They hadn't expected the answer to be so simple and direct.

Even a bit crude.

Indeed, if a small, rootless company wanted to build such an online payment system, just the banking aspect alone would be enough to kill their business plan in its infancy.

Ygritte was different.

Backed by the entire Westeros system, getting banks to agree would indeed be very easy.

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