American History 1988
Chapter 187 - 181 America Online

Chapter 187: Chapter 181 America Online

"Dean, thank you for the introduction." After the meeting, Duane still had a hint of excitement on his face.

"This is a good deal, Duane, and IBM will pay for its arrogance."

In the corridor outside the meeting room, Dean was discussing their final deal with Duane.

The nearly two-hour meeting had ended, and there was general agreement on the creation of a commercial internet exchange.

Regarding the strategies Dean had devised against IBM, most of the attendees supported them.

Of course, this included Southern Bell’s proposal to provide network hardware services for everyone, which was a win-win situation.

"IBM has already begun to decay!" Duane enthusiastically echoed Dean’s sentiment.

On this trip to the East Coast, Duane already anticipated returning with a full load of achievements.

"OK, I’ve kept my promise. But..." Dean checked to make sure the corridor was empty before he continued, "But AOL can definitely go into deeper collaboration with Southern Bell."

"I understand," Duane replied with a knowing smile, "The quote from Southern Bell to AOL will definitely be the lowest."

"Good," Dean said, patting his arm approvingly, "Our businesses have no conflicts. On the contrary, the combination of AOL and Southern Bell can hit a beautiful home run."

"I have no doubt about that." Truth be told, Duane indeed preferred AOL over SPI or UUNET.

"Then, here’s to a pleasant collaboration!" Dean extended his hand and they exchanged a friendly farewell.

His mission in Virginia was mostly accomplished; Southern Bell had gotten what it wanted.

"By the way, Dean," Duane said as he headed to the door, then suddenly turned back to verify, "We might need to go to the White House in the next couple of days, do you need to come along?"

"I’m not sure because, as you know, there’s still a lot at Byte Company."

Thinking of the cooperation between Byte Company and MCI, Duane nodded with a smile and said, "OK, we’ll be in touch later."

After waving goodbye to the Southern Bell people, Dean had a pensive smile on his face.

He knew what Southern Bell’s visit to the White House was about.

It was simply to lobby the federal government to give Southern Bell the green light to enter the network communications industry.

Duane’s invitation to Dean was to get him to demonstrate to the federal government that Southern Bell had no ambition to monopolize the industry.

Their business was merely renting out their phone lines, which did not involve the core areas of the information industry.

But Dean did not want to get involved in this affair. First, he did not know the federal government’s stance towards Southern Bell.

Secondly, he did not want to get too close to Southern Bell, although today’s meeting had been moderately optimistic.

However, Dean had also noticed that some local network operators were dissatisfied with him for bringing Southern Bell into the network interconnection plan.

These small operators detested large companies like Bell, suspecting that Bell would tamper with their network operations.

After all, the network lines belonged to others, which was akin to handing over one’s lifeline to them.

Plainly speaking, these small operators were filled with distrust towards Bell. Most of these small operators’ founders were tech geeks.

Geeks’ anti-government, anti-monopoly, and anti-establishment hippie characteristics are almost inherited throughout America

The commercial Internet exchange alliance was still fragile, and Dean did not want to challenge everyone’s sensitive nerves.

As for the person in the White House, Dean wasn’t really interested.

This wasn’t just Dean’s opinion, but a sentiment shared across Silicon Valley towards Washington.

In pursuit of more influence in the high-tech industry, Silicon Valley had organized lobbying groups more than once to advocate for political interests in Washington.

But the outcomes were mostly disappointing. The old fellow Bush was almost entirely ignorant about the information industry.

His team of technical advisors couldn’t even differentiate between a potato chip and a microchip. Feeling humiliated, Silicon Valley lost faith in Washington from that point on.

Dean did not think he could make the people in the White House understand the difference between potato chips and microchips, so he preferred not to join the commotion.

Although today’s meeting had ended, Dean was not yet ready to leave the East Coast; he needed to have a good talk with AOL’s CEO, Steve Case.

AOL was quite small at that time, with a total workforce of fewer than 100 people.

This apartment-style building was AOL’s headquarters at the time—unremarkable and somewhat shabby.

In fact, a few years earlier, AOL did not even have a decent office.

In the early 1980s, its predecessor was Control Video Corporation.

The main business was providing video games for the Atari 2600 console through a software called Game Line.

Subscribers to this software first had to pay a fee of $49.95 to purchase a modem from Control Video Corporation.

Then there was a one-time installation fee of $15, after which the Game Line client software would connect to the company’s server.

Through this software, users could download a variety of video games, at a cost of one US Dollar per download.

Even if users disconnected the dial-up connection, the games would be saved in the software module.

Unless the user chose to delete it or download another game to replace it, it would remain there.

This is the early profit model of the control video company, and honestly, it bears certain similarities to the game platform model of later generations.

Apart from games, the control video company even negotiated with Warner Brothers.

They hoped to bring Warner Brothers’ music to their Game Line software, where users could purchase on demand, and a portion of these fees would be paid to Warner as copyright royalties.

Look, isn’t this the model of future music platform software? Apple’s iTunes is a well-known example.

However, because this idea was too advanced, Warner declined the proposal.

At the time, Steve Case, who had recently graduated from school, was serving as a sales consultant at the control video company.

Steve wasn’t well-liked in the company; his assertiveness offended many, and some of the old company hands began demanding the dismissal of this "presumptuous" employee.

But the then CEO Jim Kimsey didn’t see it that way; he was impressed by Steve’s sales enthusiasm.

Later, as the control video company faced potential closure due to poor management, Jim Kimsey decided to start afresh based on the original company’s foundation.

Because Steve Case had gained his respect, and also because Steve’s brother Dan Case was an investment banker.

With their collaboration, in 1985, Quantum Computer replaced control video company and was re-established in Virginia.

Quantum Company did not continue with the old gaming business; instead, it targeted computer networking services.

It started with Commodore 64, then Apple II, Macintosh, and later, IBM compatible computers.

By 1988, Quantum Computer’s networking service had covered most of the computer types on the market.

Since software systems of the time were abundant and often incompatible with each other.

Moreover, the Apple Link software aimed at Apple users failed to achieve its expected results, and eventually, Quantum Computer parted ways with Apple on bad terms.

By then, Steve, who had been promoted to vice president, keenly realized that their software networking service was favored by many compatible computers.

So, he made a prompt decision to officially remove the content associated with Apple, renaming Apple Link to AOL (America Online).

Last October, Quantum Computer also changed its name to AOL.

Over nearly 8 years of development, while AOL hasn’t brought massive profits to its shareholders, it has survived quite well.

However, the environment has now changed, with the gradual opening of the NSFnet, this market is slowly growing larger.

The astute Steve Case was actively seeking to expand AOL’s scale, and Dean’s original networking plan suited his needs perfectly.

AOL urgently needs to cooperate with more operators, with UUNET, SPI being potential clients.

Of course, what Steve Case needs most is significant capital investment, something Dean couldn’t offer him.

However, after he saw AOL’s client software, he provided Steve with what he wanted.

As mentioned earlier, AOL has always catered to content services starting from its predecessor, the control video company.

Now, this remains AOL’s main business direction, offering services like customer email, online novels, and chatrooms, apart from games.

Dean’s previously developed C-Link system was significantly more advanced than AOL’s own chatroom features.

Steve Case understood that user engagement was AOL’s profit.

So, when Dean presented a $200,000 check and the C-Link chat system, Steve didn’t hesitate to accept his investment.

This choice proved to be correct, as AOL users recently spent more time in chatrooms.

When Dean came to his office, Steve Case was busy checking the sales report for the month.

"You’ve come at just the right time, Dean," Steve said with a smile, showing him AOL’s performance, "our subscriber count has gone up again."

"Oh, that really is good news," Dean took a look at the report, "Monthly active users have surpassed the 100,000 mark?"

"Yeah," Steve proudly pointed at the chart on the wall, "Look, our user growth rate is accelerating."

Dean looked up and saw a large monthly active user chart on the wall.

The thick red line was very conspicuous, and the rising trend of the last two months was quite evident.

It was clear that this CEO paid close attention to AOL’s user growth and was likely someone who focused solely on results.

"Our total subscriber count is just under 150,000, but active users have surpassed 100,000 people; this must mean AOL has something that attracts them."

Steve opened the AOL client on his computer, "In the past few months, we’ve only released two major updates, one is a text game for the mailbox, and the other is a comprehensive update to the chat system."

Within the AOL client window, these two features were highlighted.

"Guess who attracted them?" Steve Case almost wore the answer on his face.

"OK~" Dean chuckled and nodded, "I assume you’re considering how to compliment me?"

"Haha, Dean, I like your confidence!" This guy was a confident genius, Steve thought to himself.

"So how does AOL plan to use the commercial internet exchange to expand its size? I’d like to hear your thoughts, Steve."

After all, Dean owned 10% of AOL’s shares; he had a right to inquire about the company’s operations.

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