American History 1988
Chapter 259 - 251: Infamy Spreads Far and Wide

Chapter 259: Chapter 251: Infamy Spreads Far and Wide

"Cook, are you saying Intuit’s trouble comes from Microsoft?" Dean confirmed with a frown.

"Exactly, as far as we know, they should be taking action soon."

"Is Microsoft preparing to acquire you?" Dean guessed Gates’s old habit was kicking in again, Byte Company had received his calls in the past.

"No, Microsoft is planning to develop its own personal financial software."

Cook’s face was full of caution, after all, in the face of a behemoth like Microsoft, it seemed Intuit had no room to resist.

"Well, it seems our Mr. Gates is greedier than an octopus, wanting to extend his tentacles into any lucrative industry."

Dean wasn’t too surprised by this result; it was very much in line with his impression of Microsoft.

Just look at its history and you’ll know—in terms of plagiarizing creativity, Microsoft’s crimes are too numerous to be recorded.

Copied WordStar, then competed with MicroPro Company in the word processing software market.

Directly compatible with Lotus spreadsheets without permission, and then gradually eroded Lotus Software’s share of the spreadsheet market.

Fooled Go Corporation under the guise of collaboration, and after gaining API authorization, directly developed their own Pen Windows system.

Even worse, they restricted developers from creating applications for competitors, a blatant act of monopoly.

That’s how Gates treated Apple as well, otherwise, there wouldn’t be a graphical Windows system.

Now Microsoft had set its sights on Intuit, envious of Quicken’s dominant position in the personal financial software market.

Although the market is limited at present, Microsoft’s internal analysis predicted a promising incremental market in the future.

So Microsoft, accustomed to dominating from the start, now also planned to kick out competitors early.

Cook and Pruks were very anxious about Microsoft’s moves, their thin arms and legs couldn’t withstand much turmoil.

"Our financial situation is very healthy, and market growth is also very stable.

But Microsoft is a problem, everyone in Silicon Valley knows that, the robbers from Seattle won’t compete fairly with us.

Now, as long as Byte Company can give us a bit of help, Intuit would be very happy to accept your investment."

Dean looked at the two of them, some clarity forming in his mind.

If it weren’t for Microsoft’s looming threat, Pruks might not have been inclined to sell Intuit to Byte Company.

Cook wouldn’t easily accept funding from Byte Company either, all because of Microsoft’s greed.

In the Velvet Factory in Seattle, before Microsoft turned its gaze to financial software, life for Cook and the others was actually quite cushy.

With no real competition, Intuit’s sales growth was considerable, and Cook even planned to take it public in a couple of years.

But now, the days of unimpeded growth are gone, and they needed to face a dominant competitor.

Alright, Dean now wasn’t sure whether to be grateful to Gates.

Without his greed, perhaps Byte Company wouldn’t have had this opportunity.

"Talk about your thoughts, Cook, I guess you already have a plan, right?"

From the tone of the other party, Dean sensed that Cook seemed to have his own plans.

Cook and Pruks exchanged glances, not mincing words, and directly stated their conditions.

"We hope to use Byte Company’s sales and after-sales channels. With them, Intuit is confident it can defeat Microsoft!"

Dean looked at them meaningfully, "These are a company’s most valuable resources, even more important than the products themselves.

You’ve got a good eye. Byte Company spent hundreds of millions of US dollars to build the channel network that spans America today.

But before we discuss this deal, I need to know if you are worth Byte Company doing this."

Building a channel network is not just a matter of spending money—it requires a great deal of human and time resources.

Byte Company started this investment from its inception, and it only gradually perfected them over two years.

Now Intuit wants a free ride, but that’s not simple a matter of saying the word.

Dean needed to first assess the current situation of Intuit, in other words, he wanted Cook to present something convincing.

"OK," Cook nodded, then took the documents that had been prepared in advance from his assistant.

"Intuit’s sales this year have already broken through ten million US dollars, an increase of more than 40% compared to last year.

According to our internal estimates, next year this number will probably be between fifteen to twenty million US dollars.

Since the establishment of Intuit, its sales have never decreased.

Not only that, our after-tax profit margin is also far higher than the industry average—it even reached 25%."

Dean raised an eyebrow, "Is that the after-tax profit?"

"Of course," Cook appeared very confident, which was something Intuit had always been proud of.

"I can vouch for that," Dick, acting as a broker, raised his hand in assurance.

En Yi Investment participated in Intuit’s angel round of investment, and Dick himself was very familiar with the situation here.

Because of its small size and lack of a systematic sales channel besides electronic stores on the streets, Intuit had not engaged distributors, allowing it to maintain high profit margins.

Byte Company had also experienced such a period of development, but Dean was surprised that Intuit, not a new company, had maintained such high profitability for eight to nine years.

Dean was curious, "How does Intuit typically market its software to the market?"

Cook shrugged, "Mostly we mail it ourselves, and of course, we also work with some electronics store chains."

Mail it yourselves? Dean was astounded. Was this a direct sales model?

"Why don’t you work with distributors? They could help Intuit sell the software throughout North America."

"They’re unwilling to spend too much resources to promote Quicken, and the commission is too high—Intuit can’t afford that part of the cost."

At this point, Cook looked enviously at Dean; they also wanted to invest heavily in building their own channels like Byte Company.

But the lack of strength didn’t allow it—Intuit simply didn’t have that much money.

And if they gave half the profits to the distributors, Cook and his team were reluctant to do so, as it was their sole creation.

That’s why he raised the request to use Byte Company’s sales channels, knowing well that Byte Company currently had ample channel resources.

Distributors were just a trivial part of the whole—Byte Company was even gradually reducing its dependency on them.

Because they had their own comprehensive after-sales spots, which could completely replace the role of distributors.

Plus, with Byte Company’s focus on annual subscription models, the importance of distributors was further diminished.

Similarly, if Intuit used these outlets to sell its own software, the channel commission would be much lower.

This way, not only would Cook and his team retain their profits, but they would also experience a rapid sales growth. How perfect would that be?

Dean silently calculated in his mind that with the support of Byte Company’s outlets, Intuit might not even fear Microsoft stepping into the game.

After all, it had been immersed in this field for eight or nine years, whereas Microsoft was nothing but a crude imitator.

"Are you certain Microsoft has decided to make their personal finance software?"

"They launched a test version last month, and it will definitely be officially released before Christmas."

Cook had received inside information beforehand, and all signs were indicating that Microsoft was about to promote it.

"OK, I’ll make a call," Dean said without further ado, pulling out his Motorola.

Cook and Dick looked at each other, unsure who Dean was about to call at this time.

"Gates? It’s Dean," However, his first sentence took everyone by surprise.

Could it be... could it be... that the founder of Byte Company was this audacious?

"Dean?" Gates, who was lounging in his chair, immediately straightened up.

"Heard Microsoft is preparing to develop personal financial software?" Dean didn’t care about everyone’s surprised expressions and asked casually.

"Yes," Gates became extremely cautious, "Does Byte Company have similar plans?"

"No, just asking." Dean spoke with the nonchalant tone of someone greeting an old friend, "By the way, what’s it called, when is it launching?"

"Microsoft Money, releasing on the 3rd of next month," Gates replied instinctively.

However, right after saying it, he felt a twinge of regret. Crap! What’s there to chat about with this Irishman?

"I’m looking forward to it, then I wish it great sales!" Dean hung up the phone with a snap.

Gates, about to add something, was stunned. Rude! A bumpkin! Not a shred of manners!

As for Intuit, amid everyone’s curious stares, Dean went straight to the point as always.

"Microsoft Money, releasing on the 3rd of next month."

"What?" Dick hadn’t yet grasped what was happening.

But Cook’s heart was already racing—the timing was imminent.

"There’s not much time left for Intuit, with Microsoft eagerly watching.

So I have a proposal..." Dean revealed his dragon-slaying sword, ready to begin the harvest.

"Byte Company opens up its channel resources and puts Quicken software in every corner of America within three days.

We must beat Microsoft to the punch, letting everyone know that Intuit’s Quicken is more professional, more perfect!"

Three days? Every corner of America? Cook’s heart thumped erratically.

"So, what’s our price?"

"20 million US dollars, 40% of the shares," Dean’s asking price was quite direct.

Byte Company’s resources weren’t free, nor could they be bought with money alone.

And without sufficient interest, why would Byte Company bother helping Intuit against Microsoft?

Upon hearing this offer, Cook was torn—giving Byte Company a 40% stake meant the shares of the two founders would be further diluted.

In the several funding rounds before, his and Pruks’s shares put together were probably only around 50%.

Further dilution would reduce their equity to 30%.

And Byte Company would become Intuit’s largest shareholder, replacing them.

This was a tough decision, as it would be for any founder.

But Microsoft’s nefarious reputation was such that it could swallow Intuit whole, leaving nothing behind.

Cook took a deep breath, then made his final request.

"We can agree to this distribution of shares, but the decision-making power must remain with Intuit."

"OK, no problem," Dean agreed readily.

"Alright then, I hope this will be a pleasant collaboration."

Faced with a choice between Microsoft and Byte, Cook eventually chose the latter.

The reputation of Microsoft was enough to prompt a very obvious decision in Silicon Valley.

After all, nobody liked plagiarists, especially the first-generation founders.

"Alright, pals," Dean warmly put his arms around the shoulders of Cook and Pruks, "besides Quicken, Intuit is also planning to develop corporate tax software, right?"

"Yes, we have completed part of the work, and we will launch it next year."

"Great!" Dean snapped his fingers, "That’s exactly Byte Company’s forte.

Two excellent financial software products, coupled with Byte’s channels and after-sales.

So gentlemen, are you ready to see Intuit’s sales multiply and break through a hundred million US dollars this time next year?"

"Oh~" Dick opened his mouth in astonishment; it seemed it was more than just a simple doubling.

"Come on, guys, time to get to work," Dean clapped his hands, signaling it was time for action.

"Wanting to beat Microsoft isn’t enough by just watching—we need to seize every minute!"