章 613: Chapter 614: The Information Industry Alliance
[Chapter 614: The Information Industry Alliance]
Once Eric finished speaking, silence enveloped the conference room. While the future he described was certainly inspiring, Ian Gurney and a few others couldn't shake the feeling of doubt. Sure, success of the plan would be great, but what if it failed?
After a moment, Chris suddenly seemed to think of something and said lightly, "You know, Firefly Group was just a small production company six years ago."
The silence broke as Steve Mitnick, who had appeared somewhat distracted while staring at his laptop, looked up and said, "I agree with Eric's plan. If we don't even have the confidence to catch up to Microsoft's one-third market value in five years, we might as well pack up now. I'll just head back to Dallas and help my old man sell junk bonds."
His serious words drew a few light chuckles from the others in the room.
Then, Jeff Locke, the most reserved and steady member of the original trio, raised his hand and said, "I also agree."
Ian Gurney and Tina Brown exchanged glances and nodded in turn.
"Well then, let's discuss the specifics. I initially hoped to launch the IES scripting language and YCR chat software as soon as possible, but rolling out these two projects will change the industry's evaluation of Yahoo!'s value once again. It might also pressure Microsoft to act more urgently, so for now, all promotional plans for these two projects are on hold until the negotiations with Microsoft wrap up. Does anyone have any other thoughts to share?"
Ian Gurney spoke up, "Given the benefits of the Yahoo! browser technology priority protocol for promoting Microsoft's operating system, simply restricting Microsoft from launching browser software for five years isn't going to be enough. I believe we shouldn't grant Microsoft any browser patent licenses."
"Microsoft definitely won't agree to a complete ban on any licensing," Eric thought for a moment and replied, "During your negotiations, try to make the patent licensing terms sound difficult to encourage Microsoft to focus more on that aspect. However, as long as we solidify the position of Yahoo!'s website and online mail products in the internet sector, the significance of the browser interface will diminish, so we don't need to guard the browser software patent too fiercely against Microsoft."
"Let's request another low-interest loan," Steve Mitnick suggested with a glint in his eye as he looked at Eric. "I know you're not short on cash, but the more we ask for, the more Microsoft will underestimate Yahoo! Letting the enemy look down on you should provide some benefits."
Everyone chimed in, revisiting the collaboration intentions that Eric had reached with Bill Gates the night before, determining Yahoo!'s bottom line for collaboration. By the time they finished, it was nearly noon, and Eric set off for the airport to welcome John Chambers and Steve Case, who were arriving in Boston at the same time.
...
Though the American internet industry consistently led the world, monopolistic internet service providers like AT&T, Comcast, and Time Warner lacked incentives to improve broadband speed, which resulted in the average internet speed for users in the U.S. ranking outside the top ten globally. At one point, this slow speed became a hindrance to the growth of the internet industry. In another timeline, internet giants like Google and Facebook recognized this issue and launched high-speed broadband services, sparking a catfish effect that forced these monopolistic industry titans to up their game.
In 1994, the internet industry was just emerging, with speed still being the crucial limitation. At that time, internet services charged by the hour, making it expensive, and most users experienced speeds below 256 Kbps -- dial-up connections yielded only 256 Kbps, meaning that downloading a 1MB file could take several minutes under poor conditions. The slow speeds were not due to a lack of technology; ADSL broadband technology was already available, but market-dominating service providers had no intentions of upgrading. Due to speed limitations, Yahoo! had to manually reduce content offerings to ensure a good user experience.
While the Clinton administration strongly supported the development of the information industry, the monopolistic giants would not heed any policy documents from the White House without seeing tangible benefits. The explosive growth in the internet sector at the century's end stemmed from profit motives. Eric's main objective in bringing John Chambers and Steve Case to Boston was to unite Cisco and AOL to propel the internet industry into a 'fast lane'. His current wealth and status allowed him sufficient clout to push for this initiative.
...
After picking up John Chambers and Steve Case from the airport and sharing a simple lunch, Eric took them to tour Yahoo!'s headquarters. Besides a few confidential projects and information, Ian Gurney personally showcased the majority of Yahoo!'s technological achievements in browser software and online email services over the past two years.
When they exited the Yahoo! headquarters, it was already dusk. Steve Case turned back to look at the well-lit Yahoo! office building, feeling a mix of emotions.
When IE and Yahoo! began to take off, Steve Case had hoped Eric would sell those companies to AOL. After being turned down, instead of being disheartened, he became competitive. Last year, AOL had launched its own portal site, but its user base was only a fraction compared to Yahoo!'s. Initially, Steve had thought the disadvantage was due to IE's edge, but after seeing Yahoo!'s superior technology in the network company, he realized AOL's chances of surpassing Yahoo! in the internet business were virtually nonexistent.
In contrast, John Chambers felt much more at ease. When he was appointed as Cisco's CEO, Eric, as a major shareholder, had publicly expressed his support in a shareholders' meeting, aiding his stability in the position and the smooth execution of his development strategies. Although they hadn't met often, John held a favorable opinion of Eric. Even though Eric hadn't openly stated the intent behind this invitation on the phone, John still made the trip from San Francisco amidst a busy schedule.
...
After dinner, Chris, John Chambers, Steve Case, and Ian Gurney gathered once more in Eric's suite at the Cambridge Hotel.
"You can look over these materials first; we'll discuss them afterward," Eric distributed several documents he had prepared. Though Chris had already seen them ahead of time, he began flipping through them anew.
As Eric approached the small bar in the room to prepare coffee for everyone, he casually said, "In the '80s, the alliance between Microsoft, IBM, and Intel was a golden triangle. Microsoft developed the operating system software platform, IBM provided the best PC hardware, and Intel focused on processor chip technology. The rapid spread of PCs was closely linked to the cooperation of those three companies. Today, they have all gained a significant competitive position in their respective fields. I believe the next few years will present a crucial opportunity for the development of a new internet industry, so why don't we form a similar alliance to Microsoft, IBM, and Intel?"
After years of development, Cisco had established its leading position in network solutions, devices, and relevant software. As the leader of Cisco, John Chambers also sensed the internet industry's budding growth and rapid development over the past few years and occasionally considered ways to advance Cisco during this time. The information industry alliance plan in his hands sparked a sudden clarity in his thoughts.
Cisco, AOL, and Yahoo! respectively represented network device providers, network service providers, and network content providers. The business domains of the three companies covered the entire spectrum of the network hardware and software industry. If they could collaborate closely, this alliance would undoubtedly become an unbeatable behemoth in the new high-tech industry.
After carefully reading the seven to eight-page information industry alliance plan twice, John Chambers opened another document detailing the prospects for ADSL broadband technology. Of course, John was familiar with ADSL technology, but Cisco was divided on whether to prioritize this technology for product development. He was also curious about how Eric had gotten involved in such a highly specialized technology with a limited scope of application. Curious, he looked up just as Eric brought him a cup of coffee. After thanking him, John refrained from voicing his doubts and continued reading the document in his hands.
Eric could sense John Chambers' curiosity but had no intention of explaining himself further; he had already exhibited enough unconventional traits. A little more wouldn't make a difference.
After about ten minutes of silence in the living room, everyone except Steve Case closed their documents, with the others displaying a hint of excitement.
Eric first looked toward Steve Case and said, "Steve, what do you think of this alliance plan?"
Steve Case forced a smile. At this point, AOL already boasted millions of fixed users. Although they still couldn't compete with traditional providers like AT&T, they were the hottest among emerging competitors. Before he saw the information industry alliance plan, Steve had sensed something was amiss deep down but felt reluctant to accept it. However, he now realized that if AOL did not join this alliance plan, Eric would undoubtedly seek another partner. Even though Eric controlled 30% of AOL's shares, that paled in comparison to Eric's complete industry layout plan, making Steve's share value insignificant to Eric. Eric would certainly not hesitate to suppress AOL.
After a moment's hesitation, Steve finally asked, "Eric, have you considered other partners besides AOL?"
Eric didn't mind the underlying implications of Steve's question and replied with a smile, "AT&T and Comcast, those traditional market monopolists, no longer show any ambition. It's nearly impossible to make them proactively pursue large-scale technological upgrades, so they're not in the pool of potential partners for Yahoo!. Among the second-tier service providers, only AOL meets Yahoo!'s requirements."
Steve Case felt slightly relieved, but seeing Eric's more relaxed demeanor reminded him that AOL's rapid growth over the past two years had been heavily dependent on that $60 million investment from Firefly two years ago. Glancing at Cisco's CEO John Chambers beside him, reminding himself of the timing of Yahoo! Network's emergence, Steve reluctantly realized that Eric had likely been laying the groundwork for this plan since two years ago.
If this legendary young man had already started planning for this day two years ago, he would certainly have foreseen today's situation.
Eric and Steve Case's main disagreement lay in AOL's online business, specifically the portal site. The alliance plan clearly stated that upon joining the information industry alliance, AOL would need to withdraw from online businesses like the portal site and focus solely on being a service provider. However, with the development potential of Yahoo!'s portal, Steve found it difficult to let go of the online business.
Eric had certainly considered the possibility that Steve might refuse. However, at this time, AOL held only around 20% of the U.S. internet user share. Compared to Yahoo!'s broad promotion using IE, AOL's portal's influence reached only about 3 million users through its client software, while Yahoo! boasted over 20 million global users. Therefore, Eric believed that the chance of Steve refusing was quite low.
Still, even if Steve chose to decline, Eric had backup plans.
The YCR instant messaging software was about to launch, and Eric could easily emulate the strategy Microsoft used with MSN in the original timeline, allowing Yahoo! to directly enter the internet service provider domain. He could integrate dial-up modules into the YCR chat tool, utilizing the future market advantage of YCR to rapidly promote Yahoo!'s internet access services.
However, this would expand Yahoo!'s business scope even further. Ian Gurney and the others would not be able to earnestly carry out the 'Yahoo! Technology Alliance' and 'Yahoo! Advertising Alliance' plans, which was not the result Eric desired.
*****
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