American History 1988
Chapter 222 - 216: Pressing the advantage

Chapter 222: Chapter 216: Pressing the advantage

To support the expansion of World Link into new markets, MCI provided almost all of its channel resources, but only within the southern states.

Yes, MCI’s support for World Link was conditional, or rather limited.

That limitation was that, for now, World Link could only operate in the southern states.

In other states, such as the East Coast, the Midwest, and parts of the West Coast, MCI did not offer World Link any special favors.

Why? Because MCI needed to protect its own base.

IP telephony, with its extremely low cost, would inevitably challenge the traditional telephone market.

This challenge was not only against AT&T but could also possibly affect MCI itself.

Its market value was close to 18 billion US Dollars, with tens of thousands of employees.

And what underpinned all this was the market share that MCI currently held in the traditional telephone market.

If they provided indiscriminate support for World Link in other states, it would likely be an act of self-sabotage.

MCI wouldn’t take that risk, and its internal board of directors would not agree to it either.

World Link might have a promising future, but why go through so much effort to reshape a giant when they could maintain their current empire?

So the southern states were MCI’s bottom line, where World Link could run wild.

Outside of those states, forget AT&T, even MCI’s own departments would likely be the first to object.

In other words, unless the traditional telephone market reached a point where change was inevitable, World Link would, for the time being, only be able to develop in the southern states.

This effectively put an invisible ceiling on the growth of World Link’s business; it wouldn’t be able to maintain this rapid growth indefinitely.

Dean was aware of this, and so was MCI, but both sides tacitly understood.

It was the honeymoon phase of Byte Company and MCI’s collaboration, especially as the former was seeking to go public.

So under a tacit agreement, everyone skirted around the issue of World Link’s subsequent expansion.

And because they saw that invisible ceiling, Dean hastened to make a big splash with a story in The Wall Street Journal.

Since it was destined that there wouldn’t be many glorious years ahead, it seemed better to focus on this momentary shower of fireflies.

He was squeezing out the market potential of World Link, but that wasn’t quite the right way to put it.

It was more like excessive media exposure, where he planned to put World Link in the spotlight for a brief period.

After Byte Company completed its IPO, it would likely fall into a lengthy period of silence.

Was it worth it? In Dean’s view, it was.

Firstly, Byte Company was a software company, and the key focus for the future would be collaborative software.

Secondly, Byte Company only held a one-third stake in World Link; it wouldn’t become Byte Company’s core business.

Last of all, although World Link might go quiet for a while, that didn’t mean it would be abandoned by the market.

In the field of IP telephony, World Link remained the undisputed leader.

As infrastructure like fiber optic lines continued to improve, it would still grow gradually.

Even if MCI attempted to block it, it probably wouldn’t make much difference because it was a rule of technological development.

So Dean was willing to sacrifice some of World Link’s interests to ensure Byte Company successfully went public.

MCI didn’t obstruct Byte Company’s public relations maneuvers; for them, it was a form of publicity for World Link.

They held control, and as long as operations remained within the southern states, MCI was happy to cooperate.

Things needed to move quickly now, and according to Dean’s estimate, the southern states could only sustain World Link’s rapid growth for about 3 to 4 months.

If they waited any longer to boost Byte Company’s stock price, it would be too late.

While pondering future strategies, Dean toyed with a postcard in his hand.

It was from Arkansas, sent by Hillary Clinton, yes, our Governor’s spouse.

Taking the opportunity of Memorial Day, she had sent Dean a letter of thanks.

Of course, the content was to thank Dean for his generous donation, which helped Clinton secure the position of chairperson on the Democratic Party’s leadership committee.

That internal party position held no real power and was only in charge of some logistics work.

But it gave Clinton a platform to speak to the whole of America, which was significant as it meant he had his own channel to communicate.

Beyond thanking Dean in the letter, Hillary also mentioned she would visit California again in July.

Of course, Silicon Valley was the main focus; she entrusted Dean to help connect with more entrepreneurs and insisted he reply to her letter.

Alright, it seems that the Governor of Arkansas is already prepping for the campaign.

Whether becoming the chairperson of the Democratic Party’s leadership committee or gaining favor in Silicon Valley.

All these aspects filled Clinton with confidence for the upcoming party primaries; next year’s elections were a good opportunity.

This was because several influential figures within the Democratic Party were hesitating about next year’s elections and considering backing out.

The reason was the recent Gulf Conflict, where America displayed dominance in the Middle East.

In just a few days, they had sent Saddam Hussein running for cover, and a month later, American troops were already stationed in Baghdad.

This conflict not only awakened the Middle Eastern potentate, but also the entire world.

Under modern and informational means, traditional tactics were destined to be eliminated.

America’s dominant position in the Middle East could not be shaken by anyone, and nations around the world began to conduct modern military reforms.

Also, because he carried the momentum of a great victory, the old George from the Republican Party was as prestigious as the midday sun, and if nothing went wrong, it seemed he was certain to be re-elected.

Several powerful veterans from the Democratic Party, such as the Governor of New York, Mario Cuomo, did not want to lose too badly to old George.

This was very disadvantageous for their subsequent political careers, so they had not yet clearly announced their participation in next year’s election.

The Democratic Party’s veterans cherished their reputations, but that gave the young Clinton a chance.

Brash as he was, he was ready to take advantage of the party’s hesitation to challenge old George.

Of course, this was still in the planning stage, and to run for the elections, they needed to find their own financial backers.

Without a doubt, Dean all the way in California was the first person they thought of.

The former’s generosity was something Clinton could not forget; it was the largest single donation he had received since he began his political career.

Most importantly, they were both of Irish heritage, and according to tradition, they were naturally their own people.

So Clinton had high hopes for Dean, and although he had returned to Arkansas, he still called Dean from time to time.

This time, the postcard was also a small tactic instigated by Clinton and carried out by Hillary to maintain the relationship.

If they wanted to run in next year’s election, then it was time to take action.

Dean flicked the postcard in his hand, then pulled an empty postcard from the drawer ready to write a reply.

"Dear Hillary, receiving your letter excited me very much..."

...

By the end of May, with Byte Company releasing its first financial report of the year, Wall Street once again turned its attention to the distant West Coast.

million US Dollars, that was the answer Byte Company gave for the first quarter of the year.

This number was almost half of last year’s total sales, yet this year it was achieved in just three months.

What about the second, third, and fourth quarters? Every single person on Wall Street knew what that meant.

Moreover, Byte Company only started to enter the global market in April.

If nothing unexpected happened, in the coming third and fourth quarters, Byte Company’s sales were likely to see a significant increase.

In addition to the first-quarter sales data, Byte Company’s financial report also disclosed the actual user number of the Teams software.

That number was 1.57 million!

Yes, compared to sales, Byte Company believed that the number of users better reflected their market potential.

Because Teams’ primary sales model was subscription-based rather than one-off purchases.

1.57 million users, if they continue to subscribe to the Teams service this year, it means that Byte Company’s base sales for the year would be 230 million US Dollars.

Taking into account subsequent growth and the overseas market, how much will Byte Company’s total sales be this year? 300 million US Dollars? 400 million US Dollars?

No one knew, but as long as it reached any of the above figures, Byte’s stock would definitely become Wall Street’s hottest new stock this year.

So, the well-known investment banks of Manhattan showed their cards with concrete actions; Citibank, Solomon Bros, First Boston, Merrill Lynch, Goldman Sachs... their calls followed one after the other.

Of course, compared to these counterparts, Morgan Stanley’s people were the most pragmatic, as Richard Fischer visited Byte Company again.

This time he did not make a phone call, he had put aside his pride as one of the top four investment banks on Wall Street.

When Dean saw the black Lincoln car downstairs, he knew that Wall Street’s people had arrived.

People here on the West Coast never drove Lincoln cars; they were too old-fashioned, too serious, and not as popular as various sports cars.

Arriving in the upstairs conference room, sure enough, Mr. Fischer was sitting there, smiling and talking with David Morgentaler and the others.

The atmosphere was harmonious, but Dean was taken aback.

Because Mr. Fischer was actually wearing a sports jacket and khaki shirt?

Where were his wingtip shoes? His pinstripe suit? And those distinctive cufflinks?

"Hey, Dean! My God, I’m so happy to see you!" Richard warmly embraced Dean.

"Uh... Mr. Fischer, I’m glad to see you too." Dean looked at him skeptically; was this really the punctilious Wall Street visitor from last time?

"Just call me Richard." He opened his collar, "I love the freedom of California’s seas breeze; it makes me feel full of energy."

Richard’s deliberately relaxed expression was a bit stiff, but he was making an effort.

Now that the supply-demand relationship had changed, Morgan Stanley wanted the chance to underwrite Byte Company’s IPO shares.

Richard still remembered the scene from his last visit.

His $3,000 suit and silk tie stood out in California’s sea of casual T-shirts and shorts.

So he was trying to change himself; he aimed to fit in with them, or at least to bridge the gap between them.

Dean glanced oddly at the forcedly relaxed Richard; honestly, he still preferred the other’s old-money style from before.

David Morgentaler shrugged at him; behold, the power of money.