American History 1988
Chapter 188 - 182 Good News and Bad News

Chapter 188: Chapter 182 Good News and Bad News

How to expand the scale of AOL? Steve’s first reaction was marketing.

"Dean, don’t you think the AOL chat rooms right in front of us are perfect for advertising?"

Steve had fallen in love with this software and, even as the CEO, he himself would browse the chat rooms every day.

"Look at this aesthetically pleasing user interface, they’re so convenient.

I can guarantee that any beginner would only need one day to use it proficiently," he said.

Dean truly was a genius, a fact Steve was utterly certain of.

His software design philosophy was perfectly aligned with AOL’s principle of "technology simplification," which was the reason why Steve had accepted Dean’s investment in the first place.

He felt that there was a unique resonance in the attitudes towards the internet between himself and Dean.

"AOL should promote our rich online content on ’PC World’ magazine, readers would definitely be amazed by our chat rooms," Steve suggested.

"Okay, that’s one direction, but what about networking alliances?" Advertising might increase user stickiness for AOL, but Dean wanted more.

"Networking alliances?" Steve finally shifted his attention away from the computer in front of him, "Dean, do you mean to collaborate with more members?"

"Of course, AOL is a content service provider, and we naturally can collaborate with many members.

PSI, UUNET, Southern Bell, with the help of their networks, AOL can win more users," Dean argued.

Although all members of the alliance can be called online service providers, the term covers a broad range.

It can refer to operators that only provide network communication, without offering related content subscription services.

This is just like the telecommunications and mobile broadband of the future, with PSI, UUNET, Southern Bell belonging to this category of operators.

These companies typically have their hardware infrastructure, and if they want to expand, they have a large demand for capital.

On the other hand, companies like AOL, American Online Network, and Delphi focus more on software development.

AOL provides internet services to its subscribers by leasing lines from local telephone companies.

The dial-up client is provided by AOL, which is the window through which users connect to the network.

Beyond the dial-up functionality, this client also integrates a multitude of subscription services.

Just as displayed on Steve’s computer, within this window are email, newsgroups, entertainment (music, films), a simple search engine, chat rooms...

Some of the exclusive content requires additional payment, also known as value-added services.

The network is just the basic function; online content is at the core of AOL’s business.

While both types of operators are referred to as online service providers, their business models are somewhat different.

Pure communication operators typically serve enterprises, institutions, universities, and other organizations that may not need online content.

They just need to contact other enterprises or for internal communication, and therefore have certain network business needs.

Content providers like AOL, on the other hand, have customers mostly from ordinary users, the earliest group of internet surfers.

What Dean proposed was for AOL to sign contracts with communication service providers like PSI, UUNET, and Southern Bell.

By leasing their lines, AOL could expand its service range efficiently.

Dean believed that the rich online content would attract many household users, an untapped potential market.

Of course, if AOL operated on the networks of these companies, the local network users would face two choices: AOL or UUNET?

Considering that the former had richer online content, many users might switch sides.

So due to conflicts of interest, it would be difficult for both parties to come to an agreement.

However, negotiation was not impossible since, after all, AOL would be paying rent to UUNET.

Once AOL had enough users and the rent it paid was more substantial than the profits from UUNET’s own business, both parties would wisely choose to cooperate.

That might be challenging for now because AOL wasn’t widespread enough.

So Dean set his sights on Southern Bell, who had no related business and were more than willing to lease their lines.

"Steve, at least Southern Bell has already hinted to me that they will give AOL a considerable quote," Dean mentioned.

"Wow, that’s good news. But Dean, AOL doesn’t have much capital, we’re not as popular as UUNET," Steve said.

AOL and UUNET were both headquartered in Virginia, so Steve was very aware of Adams’s recent situation.

"Because SPI was the first to initiate the privatization trial of the NSFnet, now the rich people on the East Coast are all visiting UUNET.

They want to see if UUNET could grow into the next IBM’s ANS department, it’s said that some are ready to invest in them," Dean explained.

In the eyes of those on the East Coast, AOL was more like a software company that didn’t even have its fixed assets.

Therefore, compared to its neighbor, AOL was not as popular with investors as one might think.

Seeing Steve’s scrutinizing gaze, Dean shrugged helplessly.

"Don’t look at me like that, Steve, I’m not the investor you’re looking for," he said.

"But they say you know investors from the West Coast, Byte Company has been sought after by them.

You know, Dean. There aren’t any real venture capitalists on the East Coast; those guys are too conservative," Steve remarked.

So, it turned out that Steve was interested in the connections behind Dean, and Dean got the picture.

"Alright, tell me how much funding you need to fully leverage Southern Bell’s advantage?" Dean asked.

Dean felt that the sooner this was done, the better. He wasn’t the only smart one; the other members of the alliance would surely seek out Southern Bell as well.

If the lines were leased out by someone else first, then they’d be up early without catching a hot meal.

Upon hearing Dean’s question, Steve’s eyes lit up, "With 4 to 6 million dollars, I’m confident I can triple AOL’s size."

"That’s no small sum, I’m not sure the venture capitalists on the West Coast would be interested."

AOL is on the East Coast, plus the internet market had not yet shown its potential.

So Dean guessed that Sand Hill Road might not be that interested in AOL, thousands of miles away.

"And that’s exactly why I need your help." Steve brought AOL’s information and handed it to Dean, "Buddy, just like you convinced them to invest in Byte Company, convince them to invest in AOL."

"It’s not the same, Steve." Although Dean wasn’t too optimistic about the outcome, he still accepted the documents.

"Come on, man! You don’t want to see CompuServe dominate us, do you? Your fellow Ohioan is our biggest competitor."

"CompuServe is far away in Ohio, their only reliance is on Cincinnati Bell Company.

Clearly, the latter’s scale is much smaller than Southern Bell, so I’ve always believed Southern Bell was an excellent opportunity for us!"

"Yeah, I completely agree with that point, but we still need more capital."

Steve hadn’t been in a rush to expand AOL’s size, but the emergence of the commercial internet exchange and Southern Bell changed his mind.

Internet connectivity was indeed attractive for AOL, it meant that paid content would be seen by more users.

"I will do my best," Dean patted the AOL documents in his hand, ready to leave Steve’s office.

"Heading back to the West Coast now? I had a party ready, East Coast girls won’t disappoint you."

Steve Case was also around 30, young to be a CEO of a company, which meant his parties were never short of girls.

"Skip the party, I’m dating an East Coast girl, so you know."

Dean had gotten pickier, especially after tasting Jennifer Connelly.

"Bullshit! Dean, you don’t act like a tech genius at all.

How could those nerds just arrive on the East Coast and already have girls willing to date them?"

"It’s not about being a genius," Dean said with a beaming smile, then stylishly left the office.

Steve watched Dean’s departing figure with some bewilderment, but when he noticed his assistant Lindsay’s lingering gaze, he realized what was going on.

Motherfucker, is it all about looks after all?

...

Dean had sorted out Bell’s deal, the commercial internet exchange, and AOL’s expansion strategy, all in just a short week’s stay in Virginia.

One deal was over, but it led to another, sometimes Dean couldn’t even keep his own identity straight.

He was the founder of Byte Company, but what he was doing now felt more like weaving through various projects like a venture capitalist.

He had intended only to fulfill a promise to Duane, but by the end, it seemed like he was back to doing business with him.

However, the commercial internet exchange really did need Southern Bell’s assistance now, IBM’s strength was too formidable, it was a necessary move for private service providers.

Moreover, after this meeting, although the alliance was officially established, it would take some time before it would truly be operational.

First off, everyone needed to ensure there were no potential legal risks for the organization, and further investigation was needed to establish a data interchange center.

The center would only start construction after all the routers and gateway devices commissioned to Cisco had passed validation.

But the dawn was already breaking, everything was drawing near.

Dean had already been in Virginia for over a week, and time was soon moving into October.

Yet he wasn’t in a hurry to return to the West Coast because he was waiting for news from MCI.

The contracts and procedures for their joint IP telephony subsidiary, World Link, were about to be settled.

Dean planned to sign off on the contract with MCI and then head back to Silicon Valley.

Lucky for him, Miranda was also in Washington, see, Dean never felt lonely no matter where he was.

"Miranda, when is your father Mr. Mather returning to Washington?"

After doing several push-ups, Dean had to stop mid-way to rest.

The well-coordinated Miranda proceeded with squat-thrust exercises.

"It’s hard to say... Dean..." Miranda was panting, "It depends on the board’s vote..."

"Does Mr. Mather know anyone in the banks here in Virginia?" Dean, sprawled out, was indifferent to Miranda’s breathlessness.

"Dean... do you need help...?" Miranda was too tired and had to stop and rest.

"Actually..."

Drip, drip, drip... the phone by the bed started ringing.

"Come on, let me rest for a while." Miranda motioned for him to answer the call.

"I hate Motorola..." Dean complained as he picked up the phone.

"Boss, I’ve got good news and bad news, which do you want to hear first?" The voice of Chief Operating Officer Jimmy came through the phone.

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