American History 1988
Chapter 267 - 258: The Tide

Chapter 267: Chapter 258: The Tide

Dean’s stay in Ohio this time was somewhat lengthy, and by the time he returned to Silicon Valley, it was the end of January.

From before Christmas, he had spent roughly a month there.

He spent about a week visiting his family and checking out Peter’s bald eagle removal company.

Then there was Miranda and the surrounding friends and relatives, as well as a variety of party invitations, most of which were in Columbus.

Only after sorting through his personal relationships did he have the time to visit Susie’s rent collection company.

Although it had been developing for two to three years, the revenue of the rent collection business had hardly changed.

Its annual profit was always around six to seven million US dollars, remarkably stable.

With this income, Susie lived a comfortable life, now a true petite bourgeoisie.

Under Dean’s advisement, she had also acquired a set of real estate in Columbus.

Furthermore, with a deeper understanding of the rental market, Susie was even preparing to delve into real estate trading.

After all, she had such resources at her disposal and, with the handling of public relations expenses, also had such connections.

Therefore, entering the real estate market seemed to come naturally. Dean didn’t offer her much in the way of advice, letting her play to her strengths.

Land in Ohio was relatively cheap, and even a loss would not be significant; Dean would cover for her if necessary.

The last matter was Price’s List, which had seen the greatest changes.

Aside from the need to redesign the website, John and his team needed to consider how to promote Price’s List moving forward.

That might involve the recruitment of staff, managing localized content editors for various cities, and partnerships with operators.

Currently, Price’s List only had a few dozen employees and an annual profit of merely one or two million US dollars, small indeed.

However, Dean didn’t plan to invest more money in it for the time being, as the timing was not right yet.

For now, it would continue operating as before, putting down roots in America’s major cities.

Only when the base of internet users was sufficiently large would the internet scale effect come into play.

As for how many internet users were in America now? Truthfully, Dean didn’t know.

But recently, the CIX Alliance had begun commissioning surveys to get a handle on the market. They needed precise market control.

After all, it was time for a showdown with IBM, as the High-Performance Computing Act had taken effect.

No sooner had Dean returned to Silicon Valley than he once again attended a full meeting of the CIX Alliance.

This time, the meeting was held in Santa Clara County, Silicon Valley, which was also the chosen location for the alliance’s second data exchange center.

"All the equipment is in place, we’re ready to activate this location, right?"

Dean looked at the crimson office building in front of him with an indescribable sense of satisfaction on his face.

"Cisco is only a few miles from here, their routers and gateways can be assembled here half an hour after they leave the factory."

Steve Case had to admit that Silicon Valley truly had unique advantages for the computer industry.

You can almost find any computer-related supporting equipment here, from chips to software, from mouse and keyboard to complete computers.

The CIX Alliance wanted to establish its second data exchange center and only needed to rent a small multistory building and purchase nearby hardware equipment for setup.

In less than half a month, the network data exchange center had been completed.

Everything was too convenient, Silicon Valley was indeed a paradise for the computer and internet industry.

"OK, let’s go in and take a look," Dean said, nearly grinning from ear to ear at the mention of Cisco.

When he became a member of Cisco’s board of directors last year, the company’s market value was only around 600 million US dollars.

But by early ’92, that number had already soared to 1 billion dollars.

Nearly double the market value increase—who wouldn’t be happy?

Furthermore, with the privatization of the NSF network underway, the number of internet users was bound to reach a peak.

So it was almost certain that Cisco’s business would continue to rise for a long time.

Dean not only didn’t cash out his investment, but he was even buying more of Cisco’s stock.

Internet services, hardware, software industries—unbeknownst to him, Dean had already gained a certain influence in the computer industry.

Still, he preferred to keep a low profile, especially when his own resources were not yet fully developed.

Although he was a shareholder in most of the internet service providers here, Dean showed no arrogance.

He patiently listened to the technicians explain the working principles of the network exchange center, even though he had been the one to originally propose the concept.

Facing the less than ideal user growth of some smaller operators, Dean, as the major shareholder, didn’t reprimand them.

To everyone, Dean seemed to be purely the benefactor who generously funded the development of the internet out of his own pocket.

"Alright, gentlemen, have you seen the news released by the National Science Foundation office recently?"

After touring the facility, the group had already seated themselves in the meeting room here.

"Of course, the NSF network will officially become history by the summer of ’95!"

"Yeah!" At this point, everyone was very excited.

With the enactment of the High-Performance Computing Act, the National Science Foundation had also made the final decision on the privatization of the NSF network.

The direction for privatization remained unchanged, and the NSF network backbone would not be handed over to any single enterprise.

The federal government allowed several operators to take joint control of the NSF network through market mechanisms.

As its former regulatory agency, the National Science Foundation would completely withdraw from the management of the network.

The name NSFnet would no longer exist, and the true internet was already in gestation.

And the three years from ’92 to ’95 were a transition period.

After all, it was not possible to privatize the backbone network across the entirety of America in a short span of time.

It was a huge systematic project to ensure that the network would function normally during the privatization.

Taking years to handle this matter was not an exaggeration.

However, even so, this was significant good news for all those present.

"We’ve been negotiating with the National Science Foundation office in Mountain View, and perhaps California will soon welcome the true freedom of the network!"

Netcom’s Bob Rieger revealed a piece of exciting news, their ambition was to secure the California network backbone.

Privatization had begun, and with the support of the Dean funds, Netcom was preparing to make its move.

"AOL is also making good progress; our user base has exceeded 400,000." Steve Case fulfilled his previous promise to Dean.

After receiving a loan of 4 million dollars last year, AOL entered a rapid expansion phase.

In just one year, its user base grew from over a hundred thousand to more than four hundred thousand.

This was much more than the threefold growth Steve Case had initially anticipated.

"Look, all good news," Dean’s comment made everyone, already in high spirits, laugh with joy.

"But as we expand, let’s not forget about the Blue Giant in Boston.

Although the National Science Foundation has made guarantees, this doesn’t mean IBM will simply surrender."

The federal government spoke of market-oriented takeover of the NSFnet, which of course included IBM.

With its deep pockets, the Blue Giant could financially sweep away everyone here if it committed to doing so.

"Dean, perhaps we needn’t worry too much about IBM at the moment; they are too distracted with their problems."

IBM had fallen into financial trouble, something Adams and the others had heard about.

Due to the impact of server architecture in workstation computers, IBM’s most profitable mainframe market had severely shrunk.

In the personal computing field, because they did not place much importance on it in the past, IBM had almost lost their standing.

With core business under attack, IBM’s financial difficulties were almost foreseeable.

So Adams and the others speculated that IBM wouldn’t invest heavily into the internet service sector at this time.

Dean agreed with this point; IBM was large and unwieldy, its decision-making was bound to be conservative.

Furthermore, with the first data interchange center in Virginia becoming operational, the CIX Alliance’s advantage had slowly begun to emerge.

Unhindered data exchange had attracted many users, most importantly, it eliminated data transfer fees.

As mentioned before, there were expensive data costs associated with sending emails between different companies.

But now, the CIX Alliance had reached a consensus not to charge customers any relay handling fees.

This was undoubtedly a huge benefit for many users, so those flocking to the embrace of the CIX Alliance were increasing.

However, this did not mean that everyone could underestimate IBM.

"IBM has the most profitable enterprise customers, and that’s our target.

The timing is once in a millennium, while the Blue Giant is weak, we should be dividing it up early!"

"You’re right!" Adams, Schrader, and Bob Rieger all showed eager expressions.

UUNET, PSI, Netcom, these were all communication service providers; they were direct competitors of IBM.

"So do we have the research report? What exactly is the size of America’s internet market?"

Dean was curious about the number, the CIX Alliance had been compiling related statistics for some time.

The purpose of today’s meeting was to discuss potential market size and then draft an expansion plan.

Hearing Dean’s question, Steve Case smiled and handed over a document.

"Take a look, freshly released data."

"Thank you," Dean said as he took it and after a quick glance, looked up in surprise.

"There are already two million internet users in America?"

"That’s correct, and this doesn’t include the scientific institutions in the NSFnet; the majority of these two million are private users."

A significant portion of this data came from within the CIX Alliance; after all, their main customers were home users.

Dean continued to read; the report held even more information.

"Twenty-one percent of American households have a computer; to be honest, this is somewhat unexpected.

Based on this data, there are as many as twenty million households with computers!

Yet, there are only over two million internet users, meaning that network penetration in computing households is only about 10%!"

"So the future looks promising, doesn’t it?" Steve Case was full of confidence.

"You are right," Dean nodded, "As the NSF begins to officially loosen network regulations, the number of internet users will surely grow substantially."

"Our internal estimate is that by the end of the year, this number will have doubled." This was another reason for everyone’s great excitement today.

"That would be four million!" Dean took a deep breath, this scale was large enough.

"Gentlemen, I already see a wave surging towards us!"

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