American History 1988
Chapter 391 - 380: The Insoluble Temptation

Chapter 391: Chapter 380: The Insoluble Temptation

"Gates wants AOL to switch its default browser to their Navigator," Steve Case said in a plain statement, immediately causing Dean’s expression to change.

"Did Gates call you himself?"

Facing Dean’s inquiring look, Steve nodded expressionlessly.

Well, there it was.

Microsoft had started to extend its reach to other areas of the computer network in order to seize the browser market.

And its first move was to target one of the crucial lifelines of the market—yes, AOL held a pivotal position in the browser market.

It was not merely an ISP provider; strictly speaking, AOL functioned more like a portal website.

This was evident from the content of its client, where users could access a variety of channels for different information.

With the advancement of network technology, colorful web pages had replaced the previously monochrome text displays.

Thus, to attract more users, AOL kept pace with technological improvements.

Its client still offered various channel categories to users, but now, clicking on them would bring up the content through a browser.

In other words, AOL had moved all the content it had previously created onto web pages.

Clearly, web pages created with HTML were more vibrant and engaging than the content previously presented in window format.

Pictures, videos, audio, along with countless other interactive features—AOL couldn’t achieve this on its own.

The internet had millions of developers, while AOL was just one company; there was no comparison.

So, when the number of internet webpages surpassed ten thousand, AOL began its relocation plan.

Then came the question: which browser did AOL use to open its portal content?

It couldn’t possibly develop such a tool itself—neither from a market perspective nor from a cost consideration was it a wise choice.

So, who was this default browser approved by AOL? The answer was obviously Navigator, with Dean involved.

Everything became clear. Once users connected to the internet using AOL’s dial-up service and clicked on any news or information link on the AOL client,

the pages that popped up would inevitably load using Navigator’s browser.

This setup had been coded into the program when AOL developed its client software.

To put it more simply, AOL controlled the default browser settings for its users.

And under normal circumstances, users wouldn’t bother to change it.

Now consider how many users AOL had at this point?

At the end of 1995, the number stood at 6 million.

Although users could manually change the default settings or download other browsers,

a conservative estimate would be that the majority wouldn’t bother to do so, and many certainly didn’t know how to change the settings at all.

Therefore, of the more than 30 million internet users worldwide, AOL could influence the browser choice of at least 15-20% of them.

Now one could understand why Microsoft approached AOL, and why Dean’s expression immediately changed upon hearing the news.

Having an influence on nearly a fifth of the browser market was a significant force to reckon with.

Compare this to Microsoft, which after six months of effort, could barely secure a 9% market share, and AOL’s current position in the browser wars becomes even more evident.

Dean took a deep breath. He had to admit, Gates had a keen eye; he had almost instantly identified a key factor in this competition.

"Steve, tell me, what did Gates offer you?" Dean sensed something unusual in this arrangement.

One must understand that the relationship between Microsoft and AOL was that of real competitors—and even one of acute confrontation.

Three years earlier, Gates had personally visited Virginia, demanding to buy a 20% stake in AOL and a seat on the board.

Steve Case not only vehemently refused him but also dismissed his threats as inconsequential.

It was then that the seeds of discord were sown, which even indirectly led Gates to decide to enter the ISP market.

Furthermore, in terms of their business content, AOL and Microsoft were real-life competitors.

Microsoft’s MSN, in both content and development model, was extremely similar to AOL.

Many of its features and services were designed by mimicking AOL’s products.

Microsoft’s intent was to compete directly with AOL and fight for the same user base.

So, Dean, knowing the inside story, was well aware of their intense rivalry.

But now Gates was actively reaching out to AOL with an intention to cooperate, making Dean pay serious attention.

Given their past tense relationship, whatever Microsoft was willing to offer for a partnership had to be significant.

Under Dean’s gaze, Steve Case shrugged nonchalantly, "Actually, this is not the first time Microsoft has reached out to us."

"What?!" Dean looked up sharply.

"Hey, don’t get tense. I didn’t know about it either," Steve spread his hands, indicating his innocence.

"What exactly happened?" Dean’s intuition told him that Microsoft’s actions had begun much earlier than he had anticipated.

"About two weeks ago, the head of Microsoft’s browser division contacted our manager.

But you know, AOL doesn’t trust the people from Seattle, so our manager outright refused them.

I found out about these matters afterward. At first, I didn’t care much about it—until Gates personally called this time."

If Microsoft’s first approach was a probe, then the second was clearly aimed at raising the stakes to seal the deal.

"Dean, honestly, the terms from Microsoft are tempting even to me," Steve said, a mysterious glint in his eyes.

"I guess they must be hard to refuse." Dean’s expression at this point was as placid as an ancient well.

Those who knew him, knew that Dean was getting serious.

Steve Case leaned back in his chair and then smiled faintly, "Your guess is spot-on."

Then, without waiting for Dean’s response, he stood up and moved a laptop from the side of the desk towards himself.

"Here," Steve pointed at the system desktop.

Dean was initially puzzled, but soon he was jolted.

"Gates promised to pre-install AOL’s client on the system desktop?!"

"Wow," Steve clapped his hands in admiration, "Dean, I suddenly feel a bit of sympathy for Gates.

With you as his adversary, I think he might not even sleep well at night."

Shit! It really was that way, and for the first time, Dean felt the predicament.

The Windows 95 desktop? That was a position countless software companies dreamed of.

Imagine if the AOL client appeared on the system desktop the first time the user booted up their computer, what would happen?

It meant that every new computer user’s first internet-related action would likely be to click on that AOL icon on the desktop.

Because they would assume that it’s "official" software, and then subconsciously choose to trust it.

For AOL, they would gain a continuous stream of new users, and their revenue would see a significant increase again.

Don’t forget, we’re at the early stages of the internet boom, and the number of netizens in America is rapidly growing.

As long as AOL’s icon appeared on every newly sold computer, they could capture the majority of the new customers.

Who wouldn’t be moved by such terms? This is related to the company’s revenue, profit, and the income of every individual involved.

And why did Microsoft have the authority to influence computer manufacturers in their choice of pre-installed software?

It was connected to the supplemental clauses Microsoft had signed with the manufacturers.

The clause partially stipulated what content would be presented on the operating system when the computer was first started by a new user.

In other words, Microsoft’s agreement terms even had the power to restrict computer manufacturers.

Yes, whether it was Dell, IBM, HP, Compaq, or any other computer manufacturer, they all signed such agreements.

That’s why Microsoft could use an icon position on the Windows desktop to trade with AOL.

Without a doubt, this temptation was almost insurmountable for any ISP operator.

That’s every manufactured computer in America; heaven knows how massive this incremental market is, with the internet gold rush just starting.

Of course, the only ISP operator that could prompt Microsoft to offer such terms was AOL.

Because it had the largest market share, others either had limited scale or lacked content services.

The reason Dean felt the situation was thorny was that he was also uncertain if AOL could resist such temptation.

Business is business, he was a shareholder in AOL, but that didn’t decide AOL’s choices.

"Steve, tell me, we’re allies, right?" Dean’s gaze was fixed on him unwaveringly.

Steve Case smiled, "Of course, we always have been."

Whew, Dean silently breathed a sigh of relief.

"But..."

Dean’s gaze sharpened, then he looked at Steve intently.

"But I have to be accountable to the shareholders, and although I staunchly supported Netscape in the internal meeting,

however, many are tempted by Microsoft’s proposal, as you know, Dean, this is about AOL’s interests.

There’s a board meeting coming up that you’ll be attending, Dean.

Even with your and my votes, we only represent two seats out of the nine directors, not enough to sway the board’s resolution.

We don’t even have convincing reasons to persuade the board to give up the collaboration with Microsoft.

Because fundamentally, our proposal runs counter to the interests of AOL."

This was a very real problem, as they say, blocking one’s livelihood is akin to killing one’s parents.

Why should AOL’s shareholders sacrifice their rightful benefits for the interests of Netscape, or, say, Dean’s interests?

Just because he is the wealthiest man in the world? Don’t joke around, this is America, where personal interests reign supreme.

Believe it or not, even if Dean strongly opposed in the board meeting, the final outcome would still be inconsequential.

He neither owned a controlling stake in AOL nor controlled the board, that was the reality.

But by the decisive moment, Dean had already calmed down.

He knew that Steve Case surely had his own methods, though it might require some bargaining chips.

Dean chuckled softly, then lifted his gaze.

"Steve, let’s hear your suggestions, maybe we can find a win-win solution."

Come on, it’s time to talk business again.

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