American History 1988
Chapter 388 - 377 Harvest

Chapter 388: Chapter 377 Harvest

"How is the feedback on Toktok 2.0?" In the office, Dean was discussing future planning with Thomas for the consumer division.

"Some of our personalized designs have been well received, such as status identification and personal tags.

But due to network limitations, many users have reported that the load speed of Oak Space is too slow, especially when images are inserted."

The core function of Toktok 2.0 has not changed; it remains an instant messaging service.

However, around this platform, the consumer division is gradually enriching its ecosystem community.

Game Center, Oak Space, and various personalized client designs are all making the Toktok platform more abundant.

Yet, as Thomas said, for most users with ’small pipes,’ loading the Oak Space website is still too demanding.

Many users marveled at the album and journal features, then started uploading a large number of pictures to their spaces in droves.

Looking again after a whole night, the progress bar was moving pitifully slowly.

With internet speeds of just a few dozen Kb, smoothly loading web pages with images remains somewhat unrealistic.

"We should guide users to post more text content; the internet speed issue is beyond our control."

Dean pondered whether they had moved too fast with Toktok 2.0, and perhaps sticking to pure text updates was a better choice.

A brief status update poses no pressure for most users.

What’s important is to revitalize the community ecosystem; features like albums and such can be promoted later.

"We are currently rolling out a test version, let’s wait and see the users’ feedback.

If it really won’t work, we’ll just focus on promoting Toktok statuses.

Whenever a user posts a Toktok, the client needs to update his activities in real-time.

Furthermore, the platform also needs to send out notifications to his friends to attract comments and interactions."

A social software without social interactions just wouldn’t work, would it?

Only through the continuous expansion of personal connections can the entire community thrive with vitality.

And all of this requires the platform to provide guidance, which even involves the application of big data.

Of course, that’s a topic for another time. At present, the primary task of the consumer division is to cultivate the community ecosystem of Toktok.

"If we just focus on promoting Toktok statuses, there shouldn’t be a problem."

Hearing Dean’s change in promotional strategy, Thomas breathed a sigh of relief.

Honestly, compared to the management and maintenance of the platform community, he was more inclined to invest in Flash games.

This was the pillar business for the consumer division. As for social networking, Thomas still couldn’t see any hope of profitability.

Seeming to know what was on his mind, Dean looked up in time to remind him.

"Don’t underestimate the horizontal development strategy of the platform; it’s why users choose Toktok, and it’s our moat."

"I understand. I was just wondering, without the game business, where would an instant messaging software stand?"

This seemed like a paradox. For Byte, these two aspects inherently complemented each other.

But Thomas was curious, did a pure instant messaging app have a place in the current market?

Dean smiled, "Perhaps someone will prove it to us. By the way, speaking of the gaming business, the consumer division did well last year.

The board of directors has already decided to approve a special bonus to motivate your efforts."

"Praise the board!" Thomas grinned widely, his face beaming with joy.

Dean had hinted to him that this bonus was not a small amount.

However, as the major contributor to Byte’s market value breaking through 40 billion US dollars, it was well deserved.

It was now February, and Byte’s complete financial report for the previous year had been released.

Along with the financial report, as per tradition, came dividends and the annual bonus for employees.

In the entire year of ’95, Byte’s total revenue was 4.3 billion US dollars, which was the highest record since its establishment.

Nearly 1 billion US dollars of that was contributed by the consumer division, making it now the core department of Byte.

If it were just that, maybe the board wouldn’t need Dean to convey the extra bonus.

The fact was that with Thomas’s level, the dividends and bonus he was likely to receive could be in the tens of millions.

This was the reason for his excitement, and naturally almost everyone in the consumer division was included, although the amount each received varied by rank.

As for why the board was so generous with the bonus this time, it was because the profit margin of the consumer division ranked first within Byte.

Yes, Thomas made quite an impression at the board meeting this time.

His department, with just a billion dollars in turnover, generated a profit of 700 million dollars!

A 70% profit margin, when this internal report went public, many shareholders thought they had misheard.

But the numbers spoke for themselves; the consumer division was different from the other office software departments.

Its revenue mainly came from player top-ups; it had no channel sharing and no hardware copy costs.

Apart from initial server investments, developer’s salaries, and self-platform promotion, it had no other costs.

Even after deducting all the investments made in the establishment of the consumer division over the past three years, it still made a profit approaching 700 million dollars.

This figure was astronomical; just compare it to the revenue of the office division to understand.

Although Bit’s office software is popular worldwide and boasts a total revenue of $3.3 billion,

its profit margin has always remained around 23%, which is actually a very respectable level within the industry.

This is because channel distribution, R&D costs, packaging and transportation of software, and after-sales personnel all require substantial funds to maintain.

Calculated, the after-tax profit of $3.3 billion is around $760 million; so, do you see the problem?

This profit is almost on par with the consumer division, whose total revenue isn’t even one-third of the former’s.

At the recent annual meeting, the board has already mapped out the consumer division as the future strategic core department.

There will be larger investments this year, and more projects are set to launch.

There’s no way around it; the gaming business is just too profitable. Next to it, office software looks like an antiquated relic at sunset.

This analogy might be a bit exaggerated, but were it not for Dean intervening, the board might have considered cutting the office division’s budget.

Although the gaming business is profitable, the market is still unstable.

Office software, after years of market cultivation, has reached a stage of consistent returns regardless of conditions.

Increasing investments in the gaming business is fine, but there’s no need to cut funding for other departments that are performing well.

It is in the nature of capital to chase profits; greed can easily obscure the vision of decision-makers.

If those elites in high positions could always keep their sanity, then Wall Street wouldn’t have so many financial catastrophes.

Bit is reaping a huge harvest this year, and all employees, including Dean, are beaming with joy.

With a profit of $1.46 billion, after deducting next year’s investments, Dean alone could pocket about $350 million in dividends.

This is a cash asset, and this sum alone might surpass the net worth of many on the Forbes rankings.

Dean currently has no use for such a large sum, so a portion of the $350 million is managed by his charitable foundation, and Merrill Creek Investment Company manages another portion.

Of course, Dean’s income in ’95 isn’t limited to the above; dividends from companies like Netscape, AOL, Cisco, and Intuit also amount to about $200 million.

However, these are still not the main contributors; the real unexpected wealth for Dean came from source codes and Price lists.

They might seem inconspicuous, but that’s merely Dean keeping a low profile intentionally.

Neither source codes nor Price lists are publicly listed, so they have no obligation to disclose their financial situations.

In fact, if these two companies were to publish their financial reports, they might set off a significant upheaval.

The Internet wave has been surging for over half a year, and the first to benefit from its boon were neither Netscape nor Yahoo.

It was the source codes and Sun Microsystems; and, of course, being the first lifestyle portal site in America, Price lists also enjoyed considerable benefits.

The reason is that the Internet, represented by the Web, can’t function without web servers.

Bit’s Toktok, Netscape’s browser, Yahoo, Price lists, and all other popular websites.

The only significant hardware investment for them is likely the network servers, and as one of the first software developers to enter this market—source codes—it was almost the only choice available.

Dean’s companies alone accumulated the purchase of over ten thousand enterprise-level servers.

Other internet companies, big and small, sold even more servers, with a total market holding exceeding thirty thousand units.

Do you remember how much source codes makes in software royalties for every server sold?

The cheapest is $1,000, and at the high end, up to $10,000.

In the beginning, Sun Microsystems handled the hardware orders, but as the demand increased and as Sun Microsystems’ own workstation orders began to soar,

source codes eventually had to start designing its own hardware and seek out OEMs for production.

Although production costs rose significantly, profits grew even more.

Just in the year ’95 alone, source codes’ after-tax profit reached a staggering $450 million.

Network servers are too popular and too profitable. A device sold for tens of thousands of dollars has a cost of less than 40%, and the rest is pure profit.

That’s why Sun Microsystems’ revenue last year exceeded $6 billion—more than Microsoft’s.

Source codes tasted just a bit of sweetness and already saw such enormous profits.

The bounty of the Internet wave is so overwhelming that even Dean finds it hard to control.

He owns nearly 60% of source codes, and just his dividends from it surpass the total from all other companies.

Price lists have also achieved a breakthrough in profit this year, reaching $125 million.

Unlike information portals like Yahoo that derive revenue from advertising, lifestyle portals like Price lists earn from intermediary commissions.

So Yahoo is not profitable yet, but Price lists can be.

Advertising may not always be available, but renting houses and job searching are closely related to people’s lives.

As long as these transactions occur and there’s demand, then Price lists will profit.

Conversely, Yahoo’s ability to secure advertisements relies entirely on the needs of advertisers.

Dean has no immediate plans to take either source codes or Price lists public.

Again, they are just too profitable.

Why go public with a business that’s truly profitable? Consider it when a formidable competitor emerges.

After wrapping up at Bit, Dean plans to visit Palm Company. With March approaching, it’s time for this handwritten computer to be launched.

But before he could reach his destination, a call from Youngstown came in.

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