Simon spent a week on the East Coast and enjoyed a weekend there before returning to San Francisco on the West Coast on January 25.
Despite failing to reach an agreement with Microsoft on pre-installing the IE browser, Egret recently began discussions with other PC manufacturers like Apple, HP, and Compaq.
Compared to the previous model where service providers installed browser software for users, pre-installing it directly on the operating system could significantly increase the revenue from the IE browser software.
Due to population constraints, the number of internet users can only grow to a certain extent. However, personal computers are consumable items that need continuous updates, and sales are expected to grow steadily over the next decade.
Furthermore, pre-installing software helps solidify the market position of the IE browser, essentially leading to a monopoly and preventing competitors from gaining any foothold.
Historically, Microsoft used this exact strategy to defeat numerous browser licensing companies, including Netscape.
Although Egret holds most of the core patents for the World Wide Web technology, which theoretically should safeguard the dominant position of the IE browser, it is still crucial to take precautions.
The main concern is antitrust issues.
If the federal government were to conduct an antitrust investigation into the IE browser—an idea that has been circulating since last year—Egret might have to license out the technology.
However, if the pre-installation model is already firmly established by then, any emerging competitors would pose a minimal threat.
Therefore, Egret places significant importance on this plan.
"Apple and IBM both rejected our collaboration proposal. Apple believes that doing so would increase the cost of their computers for users. IBM thinks that if the software is to be pre-installed on their machines, we should pay them rather than charging them. Other companies like HP, Compaq, and Dell are still in discussions with us, and we are close to reaching agreements. The only sticking point is the pre-installation pricing. I suspect these manufacturers have discussed this amongst themselves and formed a coalition," Jeff Bezos explained the general progress of the pre-installation plan during a meeting.
Simon was more focused on the market advantage the pre-installation plan could bring to the IE browser. Ensuring the software's position as the definitive internet portal was more critical than the revenue from pre-installation. He had plans to gradually make the IE browser free, turning it into a complimentary 'service' from Egret, thus reducing the potential for monopoly accusations. Therefore, even if the price was lower, it would not be a significant issue.
Of course, making it free in the short term wasn't feasible.
Egret was still highly dependent on the steady stream of revenue—hundreds of millions of dollars annually—that the IE browser brought in.
While Simon was averse to this dependency, he had to acknowledge that the revenue from the IE browser not only reduced Egret's need for extensive funding but also bolstered confidence in the internet industry's future for both Egret and the broader tech sector.
In an emerging industry, attracting more participants hinges on demonstrating tangible profits.
As Jeff Bezos briefed him, Simon reviewed a more detailed report in his hand and then looked up. "Is there any possibility of continuing negotiations with Apple?"
Jeff Bezos shook his head and replied, "I personally spoke with John Sculley three times, and he consistently rejected the idea. Apple's recent performance has been excellent, and their operating system isn't widely licensed, so they aren't worried about competitors. They don't want to bear the additional cost of pre-installed software."
After the Gulf War, the US stock market recovered, and the PC market grew rapidly. Apple has thrived in recent years in both capital and actual performance. Its market value has risen steadily, currently maintaining a high of over $7 billion, with a market share above 20%.
Unlike Microsoft's ecosystem, Apple's Macintosh system isn't licensed to other manufacturers, so there are no compatibility concerns from competitors.
John Sculley seems confident that Egret wouldn't abandon Apple's 20% market share for PCs and refuses to incur the extra software procurement costs.
Egret indeed couldn't afford to give up the Apple computer market.
Otherwise, Simon wouldn't have asked about the negotiation prospects.
However, John Sculley seems to have forgotten that while Egret couldn't abandon the Apple market, it could slow down the development of the Macintosh version of the IE browser.
In the coming years, the internet will only become more crucial for PC users.
If Apple's Macintosh platform's browser software consistently underperforms compared to Microsoft's, the accumulating negative reputation could be quite troublesome for Apple.
Additionally, there's the pre-installation strategy to consider.
Unlike Apple's confidence and IBM's arrogance, HP, Compaq, and other manufacturers see the potential benefits this strategy could bring them.
Users can get browser software from service providers when connecting to the World Wide Web, but this comes at a clear cost.
Later, if the software has issues or the computer needs replacing, reinstalling the IE browser shouldn't have to burden the service provider.
Everyone knows that labor in the USA is very expensive.
A $10 IE browser software installation might incur higher service fees if performed on-site.
IE browsers are also available for retail, including online software stores, but that approach presents various inconveniences.
If a machine comes with the IE browser pre-installed, users naturally lean towards it. It's convenient if the machine is ready to use out of the box, and if any issues arise, simply restoring the system to factory settings is much easier than dealing with computers without pre-installed browsers.
In commercial competition, these small, accumulated conveniences often make a significant difference.
Apple's refusal to cooperate ultimately harms them more than anyone else.
Simon had no intention of deliberately sabotaging them; in a long race, stopping to trip competitors only slows your own pace.
As for the future, considering Apple's rapid decline following the release of Windows 95, any comeback attempts would certainly require them to pay the price.
After further discussing the pre-installation plan, the topic shifted as Carol Bartz introduced a new project.
A new computer operating system.
Linux.
"This is an open-source operating system kernel released last year by a Finnish programmer named Linus Torvalds. Since its release on the World Wide Web, many programmers around the world have voluntarily contributed to its development. We think this system is well-suited to replace the Unix system currently used in our data center, so we plan to set up a dedicated team for this project."
Carol Bartz's introduction was brief, but Simon had already reviewed the detailed project plan on his flight to San Francisco.
Egret's data center currently uses the Unix system, which has high licensing fees. Moreover, the openness of Unix does not allow Egret's technical team to modify the system's core to suit their needs fully.
Linux, with its open-source and free nature, solves this problem.
In Simon's memory, due to its free and open-source characteristics, Linux later dominated the server market, with its share exceeding 90%.
However, developing a new operating system is no easy task.
Microsoft, founded in 1975, still faces various issues with its latest Windows 3.1 system, even after nearly 20 years.
Simon appreciated that Carol Bartz and her team recognized Linux's potential shortly after its inception. Still, he knew that developing it into a fully-fledged system would be a long and arduous process.
Creating a new operating system requires a large technical team, and having fewer than a hundred or two hundred top-notch software engineers is not feasible.
Moreover, expecting a complete operating system to be developed within a year or two is unrealistic.
Finally, even after the project is completed, replacing the current Unix system remains a challenging task.
Egret's cloud computing technology is currently developed on the Unix system.
Despite the challenges, Simon understood that replacing the closed, expensive Unix system with the open and free Linux was the right path.
Knowing that this was the correct direction to take meant that no matter the investment required along the way, it was worthwhile.
After a half-hour discussion, Jeff Bezos, despite some concerns about the potential drain on Egret's funds and resources, did not oppose the plan, and it was quickly finalized.
Time had slipped into the afternoon.
After lunch, the team returned to the office and had a conference call with Steve Case, who was still in New York, to discuss the next steps for Egret and AOL.
Originally, AOL's headquarters had moved to San Francisco, but as the East Coast business outgrew the West, Steve Case spent more time at the New York headquarters. The operations team also shifted towards the East, leaving the West Coast headquarters focused more on technical development.
ADSL technology, for example, was finalized and tested on the West Coast.
After wrapping up business with Egret, Simon visited Tinkoble, a company founded by Claire Gaine, one of the C-Girls.
With the rise of the internet, the demand for iCam digital cameras has been steadily increasing.
In 1992, iCam's monthly shipments quietly reached about 50,000 units, with an annual shipment of 610,000 units, generating nearly $300 million in sales.
For a startup in electronics, achieving this while facing competition from established companies is remarkable.
Thanks to aligning with the rapidly growing internet concept, Wall Street recently valued iCam at up to $1 billion.
After another round of financing, Westeros Company's stake in Tinkoble rose to 70%, while the founders' shares were reduced from 25% to 15%.
Given the current valuation of $1 billion, this 15% share is worth $150 million.
Claire Gaine thus became another millionaire emerging from the Westeros ecosystem. Unlike the executives in the system, the status of a "C-Girl" adds a touch of intrigue: Simon Westeros' housemaid.
There's growing interest and curiosity about the 'ABCD' girls surrounding Simon Westeros.
The third-generation iCam-30 is still set for release on Easter.
Meanwhile, Tinkoble has quietly begun developing a digital music player, with the trademark "iPlayer"
already registered.
This device will be based on Egret's MP3 audio format and micro-disk storage technology.
Despite appearing nearly ten years ahead of its time, the accumulated technology makes product development manageable.
Once USB is finalized and widely adopted and AOL's ADSL network is in place, the digital music player can form a complete online music ecosystem.
After a day's work, Simon spent the night with his assistant at his Woodside mountain villa before heading back to Los Angeles the next day.
This year's Golden Globe Awards are scheduled for January 28, a Thursday.
The event is once again at the Beverly Hills Hilton Hotel.
Daenerys Entertainment has many nominations in both film and television, making it one of the night's hot topics.
The company had started preparing for a celebration party a week in advance.
Regardless of the award outcomes, the 30-plus nominations in film and television are enough for a grand celebration.
Simon had no interest in spending hours in the Hilton Hotel's ballroom. After working until 6 PM, he returned to the Cape Dume estate for dinner with Janet before heading to Daenerys Studio's event center.
Tonight's celebration is held there.
Many executives and stars not attending the awards had already arrived, and the place would be even busier after the ceremony.
Inside the event center's hall, a projection screen was broadcasting the live Golden Globe ceremony. Simon greeted Amy Pascal and others before discussing the 'Conjuring Universe' plan with Danny Morris.
"The Warrens published a biography titled 'The Demonologists' in 1980, co-authored with a writer. They signed an exclusive agreement with him, barring them from granting further rights to their stories. This is the main issue. We've approached the writer, but he's asking for $5 million, which is ridiculous. Now, other Hollywood studios are also showing interest in the book's adaptation rights."
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