American History 1988
Chapter 356 - 345: Gold Rush

Chapter 356: Chapter 345: Gold Rush

"Although Netscape’s webmail service boasts tens of millions of users, this is far from the end."

"But currently, the entire American internet user base is only around twenty million, and Netscape accounts for almost half of the market.

According to the IT industry’s 6:2:1:1 rule, Netscape’s share will continue to grow, while the remaining market size offers limited profit."

Thomas was puzzled by Dean’s insistence on entering the webmail sector because its market size was already capped.

The so-called 6:2:1:1 rule is a market share distribution pattern applicable to the IT industry.

Usually, the leader of a specific segment alone commands 60% of the market share.

The runner-up can only secure 20%, which is almost a steep decline compared to the leader.

Meanwhile, the third place’s 10% is not too far behind the second; as for the remaining 10%, it is divided among other smaller companies.

For example, in the office software sector, Bit Company occupies the major portion of the market share.

And Lotus, whose business overlaps somewhat with theirs, ends up taking only about 20%.

Besides these two industry giants, other smaller companies just scrape a little here and there.

The semiconductor field with Intel, AMD, and others follows roughly the same pattern.

Thus, based on past judgments, Thomas believed that after Netscape, the remaining growth market for webmail services was very limited.

Several millions of users seemed not worth Bit’s substantial resource allocation, especially since Netscape, despite having ten million users, hadn’t seen significant revenue growth.

After all, this business is free, and it can’t bring profit to the company in the short term.

Moreover, given that Dean mentioned Yahoo was also planning to enter the webmail business, this venture becomes even less worthwhile.

Fierce competition and meager profits are not enough to entice Bit to enter the fray.

Thomas was not wrong in thinking this, but he overlooked one thing.

"Thomas, you’re forgetting something," Dean pointed at the computer on the table, "the internet is gradually becoming more widespread."

"Boss, are you suggesting..." Thomas’s eyes showed reflection, "the growth market is getting bigger?"

"Of course," Dean spread his hands, bewilderingly, "did you think twenty million was the limit?

No, America has a population of 160 million, and the internet penetration is not even a quarter yet.

And the global population is as high as 5.7 billion, although the development level varies in each region.

But ten years from now, the number of internet users is definitely going to be counted in the billions.

Remember the greatest advantage of webmail? Free, convenient, accessible anytime, anywhere.

Think about it—when this market reaches hundreds of millions, even billions, will it still be insignificant?"

The vision of the internet’s future depicted by Dean deeply moved Thomas.

He had never considered that the scale of internet users could reach such levels.

Hundreds of millions of users? Even just 10% of the market means tens of millions.

This is sufficient to sustain countless companies of the same type because the market is large enough.

"Although it might take a few years for the majority of families to adopt the internet,

the market is there, if we don’t claim it, others will.

Rather than competing with others later, we should start laying the groundwork now.

We may not profit from the email business for the time being, but its operational costs have already been diluted by Toktok’s server expenses.

Moreover, having an email would also enhance Toktok users’ loyalty."

As for value-added services, we can explore them slowly, but market first!"

Bit’s email service indeed doesn’t make money, just like Toktok.

However, Dean still wants to proceed, for the reasons mentioned above.

First, looking to the future. Second, seizing the market early. Third, binding Toktok to increase user loyalty.

There’s actually a fourth reason—operating the email’s cost has already been spread out by Toktok.

Both can share servers since email users do not need to be online continuously, and the leftover resources from Toktok are adequate for its use.

Thomas now also understood the underlying reasons; the internet economy might exceed everyone’s expectations.

The current Silicon Valley, although generally optimistic about the future of the internet, does not envision it to be on the scale of billions.

"I’ll keep an eye on the development team to ensure that Bit email is ported to the Web platform as soon as possible; we’ve had similar experience in the past."

Bit Email was not a novel thing; when Bit Work, a project management software, was launched, it already included an email function.

However, like AOL and Lotus, Bit Email could only run on software clients at that time.

Now, Thomas’s task was to rewrite it using hypertext language and relaunch it on the web.

"Boss, as Bit email is preparing to develop a Web version, should we integrate the email functionality that previously accompanied the software?"

This would facilitate resource utilization and management, and, of course, Thomas had a personal motive as he wanted to move the email business to the consumer division.

"Office emails and Toktok’s emails both end with @bit.com, running them on the same server group is no issue.

Moreover, their data should be interconnected, but the software client’s email functionality should continue to exist.

Because their application fields differ, this is just like the home and professional versions of an operating system."

Although webmail is more convenient, the client-based email also has potential market demand.

A future example is Microsoft, so Dean is not planning to completely eliminate this functionality.

"The same principle applies, first occupy the market, and when there are enough users, then consider the issue of value-added services."

"OK, I have prepared the consumer business division, with no expectations for profit within two years."

Although Thomas was now also confident in the internet economy, he knew it would take time.

"Don’t lose heart, Thomas, the consumer business division will definitely be one of Bit’s core sectors in the future."

Dean reassured him with a smile, "it won’t take too long, this year will be critical."

"By the way, boss, Microsoft is planning to distribute the software development kit for their new system, we’ve received the notification from Seattle."

"New system?" Dean was startled.

"That’s right," Thomas shrugged, "officially called Windows95."

"Oh~" Dean’s eyes widened in surprise, "good, organize the development team to adapt to the new system quickly.

Microsoft has been polishing it for three years, it surely won’t disappoint."

"Word has it, they say it’s even more astonishing than Apple’s original Mac?" Thomas was also intrigued.

"Gates’ business empire is nearly formed," Dean chuckled.

However, Thomas reminded him, aside from Bit, another company was in dire need of the Windows95 system.

...

Two months had passed since Netscape completed its funding.

With the injection of hundreds of millions of US dollars, it had already made a glamorous turnaround.

The brand-new office building, a server center covering thousands of square meters, was quite a step up from its humble beginnings.

Moreover, Netscape’s team was now extraordinarily robust.

Under Durell’s networking efforts, he had gathered a multitude of experienced management personnel.

For instance, Jim Barksdale, who was now the CEO of Netscape, had previously been an executive director at AT&T Wireless and before that, the CEO of Federal Express.

The vice president, Mike Homer, was a veteran from Apple Inc.

The legal advisor was their old friend from WSGR law firm, Wilson Sonsini.

Even the new office building of Netscape had a notable location. It was still in Mountain View, but the site had moved to the Fairchild Semiconductor building, just around the corner from the Carriage Wheel Bar.

Jim Clark had extricated himself from the hectic day-to-day affairs; as a major shareholder, he could fully enjoy a leisurely life.

However, perhaps because he had invested so much effort, Clark was still often present in Netscape’s office.

In fact, Dean, who visited only once every week, would meet him every time.

"Jim, Microsoft is about to distribute the software development kit for their new generation operating system, and Netscape needs to apply immediately."

"New generation operating system?" Clark looked puzzled, "Is it important?"

"It’s very important for Netscape," Dean said seriously, "in a few months, it might be a different story."

"Why?" Clark was startled.

"Because the internet is too hot right now, I have a feeling, a new ’gold rush’ is brewing."

Dean had always believed that this year, 1995, was a pivotal year in the internet surge.

The fundamental reason was that the NSF network would completely become history in a few months.

Without the last piece of regulation, under the manipulation of capital, the internet was bound to exhibit amazing vitality.

Moreover, the internet infrastructure that had started in 1993 was now ripe for reaping benefits.

Most cities in the United States had completed the access to fiber-optic broadband, although this was just the laying of the main lines.

But it had made it possible for the internet to reach millions of households and connected the whole of North America together.

All these factors had created the internet wave.

Without a doubt, as long as there were significant profits to be made, everyone wanted a piece of the action.

"Dean, do you mean Netscape is facing strong competitors soon?"

"That’s just speculation, but better safe than sorry," Dean did not trust the people in Seattle and capital was utterly unprincipled.

It seemed Clark understood something; the lightness previously visible on his face faded.

"I’ll have a talk with Barksdale. I’m here until Netscape goes public..."

Beep beep beep, Clark was halfway through speaking when his phone rang in his pocket.

He apologized, then turned to answer the call.

But after a few words, he hung up with a distressed look on his face.

"What happened?" Dean asked curiously.

"Glenn Miller, at the coast in Mexico, he put a shotgun in his mouth and pulled the trigger."

The call had been from Miller’s wife, and according to the call log on Miller’s phone, his last call had been to Clark.

Dean also was shocked by the news, they exchanged glances, and neither spoke.

"Do you need to attend the Netscape meeting later?"

"No, I’ll just pass a message to Barksdale and then leave."

"Where to?"

"To Virginia."

The tragedy did not halt Dean’s progressive steps.