Chapter 398: The Housekeeper's Business Proposal

After dinner and a chat with Janet's parents about recent events, Simon and Janet didn't return to their nearby villa, opting instead to spend the night at the large estate.

In the upstairs bedroom, Simon came out of the bathroom after a shower and saw Janet already in her pajamas, hugging a pillow and standing by the bed, staring intently at him. "I'm going to sleep with Aunt tonight."

Simon paused briefly, then continued to towel his wet hair, nodding with a smile, "Alright, you've exhausted me for so long, I could use a night off."

But Janet didn't move, still staring fixedly at Simon.

As if nothing was amiss, Simon pulled the towel forward slightly to cover his eyes and continued drying off.

Janet wrinkled her nose, seeing him come close and wrap his arms around her, she instinctively leaned into him. Due to the pillow between them, she leaned forward to receive his kiss.

"Good night."

"Mmm, good night."

She agreed outwardly, but inside, she was even more troubled.

Little devil.

He really let me go stay with Aunt.

Even a little deceit would have been better.

Or he could have just made a fuss, pinned me to the bed, and I could pretend I knew nothing.

After bidding good night and releasing Janet, Simon hung up his towel. Seeing she hadn't moved, he said nothing more, simply took the pillow from her arms, tossed it onto the large bed, swept her up in his arms, and followed her onto the bed.

However, more than an hour later, Janet still slipped out of the now-sleeping man's embrace and quietly left their bedroom.

The next day was February 3, a Sunday.

Since leaving Los Angeles on January 20, the couple had been resting for two weeks.

In the cabin of a Boeing 767, after takeoff, Simon sat in the front cabin office reviewing documents that had accumulated over the time, while Janet sat opposite, chin propped in her hands, watching her husband with eyes twinkling with various small emotions.

Simon was aware that Janet had left quietly last night.

But he didn't know what Veronica had told Janet.

Now, with Janet silent, Simon didn't initiate any particular topic.

He really didn't know how to address it.

Across the desk, after observing her man for a long time, Janet finally sighed softly, deeply puzzled about what exactly had happened.

Aunt was clearly mistreated, yet she sided with him.

Just like herself.

Was it because of last time?

Janet touched her own wrist.

Little devil.

You really are a devil.

Resolving silently to herself, she decided to visit Melbourne less often in the future, at least, not to let him come alone.

With a resigned sigh, Janet casually picked up a folder from the desk and began to read.

It was a report on the increase in free trial users for America Online in January.

Janet knew about the free trial program America Online was running, but seeing the gap between the 2.3 million scheduled users and the actual 810,000 installations startled her. She raised the folder towards Simon across the desk, asking, "Why is there such a big difference?"

Simon glanced up, having already reviewed that document, and explained, "The main issue is manpower. For this trial, America Online initially prepared 5,000 official and temporary installation personnel across the East and West Coasts, which was expected to handle about a million installations per month. However, in reality, things turned out to be more difficult than expected, and many problems arose. You can see the more detailed figures; of the 810,000 installations, 390,000 were in areas operated by Bell Atlantic, mainly because they actively collaborated with us to solve issues with lines and equipment, even reallocating some of their staff."

Simon felt a sense of accomplishment.

Acquiring Bell Atlantic ahead of time had proven to be the right move.

America Online had signed a ten-year exclusive agreement with the three major regional operators last year, preventing Bell Atlantic from entering the internet service sector.

A few months later, witnessing the explosive growth in internet users, with over 2.3 million booking in just one month, the three major operators began regretting the initial agreement.

Such high demand for free trials was unprecedented for telecom operators. If all these booked users converted to regular ones, it would account for about one-tenth of the total number of the three operators' users — a figure that took decades to accumulate.

In this past month, the operators even noticed that some users transferred from other small local telecoms to their services just to avail the free trials, which was unexpected.

The American telecommunications industry is fiercely competitive; several operators can exist in a single city.

Of course, most rent the networks of giants like AT&T to offer their telephone services. Regional telecom giants like Bell Atlantic, Bell Pacific, and NYNEX have always aimed to squeeze out these

 smaller operators, which is difficult because the smaller ones often have lower operating costs.

Now, America Online, relying on their infrastructure, was unexpectedly facilitating this.

The top executives of the three operators understood that cooperating with America Online's expansion would also significantly benefit their user growth.

However, understanding the theory and implementing it were two different things.

No one wants someone else to build a mansion in their yard that's prettier than their own house, even if it's unavoidable, even if they're paid for it, even if such a mansion might attract paying tourists. It's hard for a homeowner to agree without reservations.

With Bell Atlantic now part of the Westeros system following its acquisition, Raymond Smith and other managers could make this happen.

The other two, Bell Pacific and NYNEX, were less willing.

The initial agreement stated that apart from developing network lines, if America Online wanted additional support, it had to pay extra.

Due to substantial financial investments, America Online's management was running this free trial with a do-or-die attitude and could not afford to allocate more budget to these operators.

This resulted in only 390,000 of the 810,000 installations coming from the cooperative Bell Atlantic region in the first month.

Listening to Simon's explanation, Janet continued flipping through the documents, then asked, "Isn't $100 per household too low? Can it be achieved?"

Simon explained, "The $100 includes $20 for labor, $30 for network costs, and $50 for equipment and software costs. However, these figures are based on the expectation of converting to regular users."

This free trial employed 3,000 part-time installers recruited from universities, paid on a per-installation basis at $20 each.

With a home telephone penetration rate over 90% in America, the trial was selective, limited to customers of the three major operators, requiring no new lines, just equipment installation at the user's home phone terminal.

The equipment and software mainly included modems, interface network cards inserted into the motherboard, drivers for these cards, and browser software.

This setup was quite expensive, with total costs nearing $200. If a trial user did not convert, America Online would reclaim the equipment. Even users who converted but later canceled would face the same.

Since reclaimed equipment could be reused, America Online, assuming a 25% conversion rate, projected an average budget of $50 per user.

In essence, this was somewhat of a financial gamble.

Ultimately, America Online was under significant financial pressure.

Thus, despite the staggering number of 2.3 million bookings, America Online's management had no intention of increasing the number of workers. On one hand, it was not feasible as even the temporary workers were trained; on the other hand, costs were a concern.

Plus, they needed to consider whether this surge was just temporary.

Rashly expanding the workforce could lead to trouble if user enthusiasm for the free trials cooled down.

Moving forward, America Online planned to more effectively screen and allocate the booked users to achieve the targeted 1 million installations per month. In three months' time, by the IPO, the market would likely give America Online an impressive valuation.

Also, experiencing the difficulty of securing a trial opportunity could, to a great extent, encourage trial users to convert.

After all, things too easily obtained are rarely cherished.

If after waiting over a month, one becomes a trial user, and seeing some still waiting, the inclination to give up would be significantly less.

In a way, this was also a form of reverse psychology marketing.

After a 17-hour flight reaching Los Angeles, due to the time difference, it was still the morning of February 3, a Sunday.

Resting further into the next day, Simon flew to San Francisco early Monday morning.

This trip was work-related.

The housekeeper, Alice Ferguson, after her continuous small pressures on Simon, finally presented two business proposals that intrigued Igritte, America Online, and even Bell Atlantic.

The two business proposals were for an online payment system and an online software store.

The former was akin to what later became PayPal, while the latter resembled Apple's App Store as Simon remembered.

Moreover, these two proposals were complementary.

Igritte had been exploring reliable business models. The World Wide Web software was one aspect, which under Carol Bartz's management had begun to show promise over the past year.

In the portal website sector, besides advertising, Jeff Bezos had also been considering other revenue streams.

Although under Simon's forceful coordination, the software and network departments collaborated smoothly, it was unrealistic to expect the software department to support the network department in the short term. If the portal relied on this, its sustainability would be at risk.

The housekeeper, inspired by Simon, had refined the online payment system and online software store, offering hope to Jeff Bezos and even Raymond Smith of Bell Atlantic and America Online, seeing the enormous commercial potential within.

At Igritte's headquarters near Stanford University.

In the conference room, Simon, Jeff Bezos, Carol Bartz, Steve Case

, John Chambers, and Raymond Smith sat on either side of the table, listening to the housekeeper present her business plans in front of the projector and answering various questions.

"...To build an online payment system, we need corresponding goods; thus, we must create a complete online consumption ecosystem. The online software store is a key component. The market potential for computer application software is evident just from the growth of Microsoft and Oracle in recent years..."

"...Moreover, the market is never short of excellent business software, especially some small-scale applications with strong professional nature. The main constraint on their growth is the sales channel. The increasingly large PC gaming market is the same. Many professional software designers can produce a game on par with professional gaming companies all by themselves, but commercialization is too challenging, and they can't distribute their games..."

"...However, Igritte has an unparalleled channel advantage. Using the World Wide Web platform, we can bridge mainstream Apple's Macintosh system, Microsoft's Windows, and traditional DOS operating systems. With this online advantage, we can distribute and sell application software, PC games, and other products to users of these platforms at a very low cost. The company can take a cut from these sales..."

"...Furthermore, once the online payment system is completed, using this system, we can further promote online bill payment, online retail, and other services..."

The housekeeper continued switching the PowerPoint slides, talking for twenty minutes before stopping.

The attendees patiently waited for the neatly dressed short-haired woman to take a few sips of water from the cup on the table before Raymond Smith was the first to ask, "Alice, you mentioned linking online payment system accounts with physical credit cards. Have you considered the difficulty of achieving this? Over the years, commercial banks have struggled to enter the American Express card payment system without success. Also, how can you ensure that commercial banks will open up payment interfaces to us?"

Alice Ferguson looked around the room, her gaze finally resting on Simon for a moment before replying, "The entire Westeros system, including the recently acquired Bell Atlantic and MCA, generates tens of billions in annual cash flow, and the demand for commercial loans is also substantial. I believe any commercial bank would strive to secure such a client. If such a client requests them to open an online payment interface, I don't see it as a significant challenge."

Everyone paused at her response, then smiled.

It was such a straightforward and simple answer.

Even a bit forceful.

Indeed, if it were a small, baseless company trying to create such an online payment system, just the banking aspect would be enough to doom their business plans.

But Igritte was different.

With the entire Westeros system backing it, getting banks to comply was indeed very easy.

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