American History 1988
Chapter 354 - 343: Taking Precautions

Chapter 354: Chapter 343: Taking Precautions

In January 1995, four months had passed since Explorer 2.0 was officially launched.

It attracted so much attention that many households subscribed to internet services just to experience this magical software.

After all, the appearance of browsers brought the once-distant network into the homes of ordinary people.

Together with it came Yahoo, a portal website that fully opened the door to the information age of the internet.

Every day, thousands of websites were established, vastly enriching the content available on Yahoo.

The internet is interconnected, and the dense emergence of websites allowed the internet to expand explosively.

According to research institutes, more than half of the US population had either used or heard of the internet.

Clearly, a brand-new blue ocean market was forming, with more and more people beginning to notice it.

However, not all internet-related companies were thriving; Mosaic had recently experienced a downturn in an adverse environment.

Even though the number of internet users was continuously increasing and the market was expanding.

Yet, Mosaic’s market share had fallen, as people gradually abandoned this veteran browser.

When it first appeared last year, it and Explorer accounted for nearly 100% of browser market traffic.

It had also provided convenient internet services, being the first choice of many universities and corporations.

Because most of these institutions operated systems primarily based on Unix, Mosaic was their first browser.

However, by the latter half of the year, significant changes started occurring, especially after Mosaic was licensed to Spyglass.

At the NCSA research center, although slightly behind Explorer in updates, Mosaic had enough researchers to keep up.

Overall, the gap was not insurmountable.

The original team’s departure indeed brought many troubles to NCSA.

Yet, thanks to the initial market share, this problem did not become apparent too quickly.

Later, to quickly monetize the project, the University of Illinois licensed Mosaic to Spyglass for US$300,000.

This licensing fee was unbelievably low, but at that time, browsers were not charged and had shown no commercial value.

Thus, the University of Illinois was actually quite satisfied with this fee, even considering it the most profitable of NCSA’s commercial projects.

Under Spyglass’s management, Mosaic performed even worse than at NCSA.

Because Spyglass was a commercial company, not a research institution.

They only repackaged the licensing projects purchased from universities and resold them under new names.

As for research and development and version iterations, these were not in Spyglass’s plan at all.

Under their management, Mosaic received only the minimal investment necessary.

Months later, not only was it significantly behind Explorer in functionality, but it also lacked proper customer support.

Still, in the decision-making process for commercialization, Spyglass’s speed was nearly on par with Netscape.

Just two weeks after the official launch of Explorer 2.0, Mosaic also announced a similar business plan.

Unfortunately, to strike while the iron is hot, you need to be strong yourself; Mosaic’s hastily launched version 3.0 did not achieve the anticipated market growth.

It was so far behind Explorer 2.0 in terms of performance, with nearly a 10-second difference in startup time, that it was enough for old users to abandon it without hesitation.

Thus, at version 1.0, Mosaic could still claim nearly 40% of the market share.

But with the latest version, it was completely annihilated by Explorer 2.0.

In just four months, its market share plummeted to around 15%, and the process was ongoing.

Incidentally, why was Mosaic at version 3.0 while Explorer was at 2.0?

That was because Spyglass pulled a trick, intentionally accelerating their naming pace.

This made Mosaic appear to update more frequently, which usually suggests better performance.

But clearly, customers were not fooled by such marketing tactics; the quality of the product itself is the best advertisement.

Even feeling deceived, many users started to complain about Mosaic, and even more simply abandoned it.

This led to the current situation, and seeing Mosaic’s potential exhausted, Spyglass planned to write it off and no longer invest in it.

However, the situation once again took a turn, as someone approached today wanting to discuss licensing Mosaic.

Upon learning the visitor’s identity, Spyglass’s management was first stunned, then overjoyed.

"Mr. Silverge, are you saying Microsoft wants to buy the rights to Mosaic?"

"You could say that, we plan to include it as an additional feature in our new system."

Brad Silverberg lied slightly; Windows95 had no such plans at the moment.

And as the head of Skunkworks, he didn’t actually represent Microsoft.

Even today’s visit was solely Brad Silverberg’s decision.

But he didn’t clarify this distinction to Spyglass’s people.

Because sometimes, using Microsoft’s name made things easier.

Look, upon receiving a firm reply, Spyglass’s manager Barber showed visible joy.

"Mosaic ushered in the era of graphical internet, as it was the earliest GUI browser.

We have millions of users in corporate institutions; it is becoming an essential application software..."

"I agree with you, Mr. Barber," Brad Silverberg had to interrupt his overt bragging.

If it weren’t for knowing about Explorer’s existence, he’d almost have thought that Mosaic was the only browser available on the market.

"So let’s get back to the issue at hand, regarding the licensing of Mosaic, how much are you planning to offer?"

Silverge didn’t want to revisit Mosaic’s history with the other party; he just wanted to close the deal as soon as possible.

His intuition told him that the internet was about to experience a crucial innovation this year.

Whether this intuition was accurate or not, it was always good to be prepared beforehand.

Barber, who was interrupted, didn’t feel any discomfort at all - this was Microsoft, the largest software company in the world.

But regarding Mosaic’s licensing fee... he turned and exchanged a glance with a colleague.

Then, somewhat apologetically, he began, "Mr. Silverge, please allow us to discuss this first."

"Of course," Silverge spread his hands, "the coffee is great here; perhaps I could enjoy a cup first?"

"OK, we’ll be back in five minutes." The time it took to drink a cup of coffee was enough for Barber and his team to come to a decision.

Honestly, Microsoft’s arrival was completely unexpected for Spyglass.

Because earlier at the beginning of the year, a spokesperson from Microsoft had publicly stated that they had no plans to enter the browser business yet.

Yet two weeks later, the team responsible for the negotiations was sitting in Spyglass’s office.

Nevertheless, this was a good thing. Mosaic was barely alive in Spyglass’s hands now.

If Microsoft could take it over, that was of course more than welcome for Barber and others.

So, it only took three minutes for Spyglass’s management to quickly reach a consensus.

When Barber returned to the meeting room, Silverge had not yet finished his cup of coffee.

"So, you have a decision, right?" Silverge put down his coffee, satisfied with their efficiency.

"Yes," Barber nodded, and after another subtle exchange of glances with a colleague, he cautiously began.

"Regarding the licensing of Mosaic, our expectation is... 3 million US Dollars."

Silverge involuntarily paused, while Barber watched his every move nervously.

"3 million US Dollars?" Silverge’s voice seemed incredulous.

"Mr. Silverge, you know, Mosaic is a brand that took the internet by storm..."

Barber started to ramble in explanation, knowing the asking price was high.

Because when they had taken over Mosaic, they had only paid the University of Illinois 300,000 US Dollars.

Now, not only had Mosaic failed to develop, but it had also almost completely lost the market.

However, considering the buyer was Microsoft, Spyglass’s management had blindly multiplied the price tenfold.

But because it was too "absurd," Barber feel very sheepish at the moment.

However, the more he explained, the more peculiar Silverge’s expression became.

Damn, a browser used by tens of millions, only selling for 3 million?

That’s too cheap, almost unrealistically so.

Although Mosaic cannot match up to Explorer, it could save Microsoft several months of development time at a critical moment.

Once he confirmed that the other party was "serious," Silverge also tentatively began.

"I think 2 million US Dollars is a reasonable price, since Mosaic has already lost most of its market."

"Uh... it’s not impossible," Barber hesitated outwardly, but inwardly he was overjoyed.

Microsoft was truly the big spender; 2 million US Dollars, Spyglass was making a killing!

million was just their opening outrageous demand; Barber had originally thought Microsoft would cut the price down to under 1 million US Dollars.

million? And they weren’t even that firm.

At that moment, Barber prepared to fleece them further!

"Spyglass can agree to a 2 million US Dollar licensing fee, but we have other conditions."

"Please, go ahead~" Silverge finally sat up straight, knowing that the additional conditions were usually the trickiest part.

"Spyglass can provide all of Mosaic’s initial source code, which Microsoft may then modify and re-release under its own brand.

However, as an exchange, Microsoft will need to pay Spyglass a 5% royalty for every one of these browsers sold."

million US Dollars was certainly a large sum, but Barber understood even better that with Microsoft’s massive scale, they wouldn’t worry about selling the browser.

Just securing the royalty contract was like securing a goose that lays golden eggs for Spyglass.

As a competent businessperson, starting a high offer was basic practice.

Indeed, upon hearing Barber’s terms, Silverge also frowned slightly.

This term was much higher than the initial 2 million US Dollars offer, and he was well aware of Microsoft’s scale advantage.

Moreover, Microsoft never easily promised royalties in business cooperations; dominance was its consistent style.

However, Silverge’s thinking was unlike others; he was the leader of Skunkworks.

"We can agree to this royalty condition, but we need to limit the scope."

"What scope?" Barber instinctively asked.

"The royalty will be limited only to the first version of the Microsoft browser." Silverge smiled faintly.