After leaving EA's headquarters in Redwood City, Simon headed to the Igret Company's headquarters in Palo Alto for a meeting about the project to split the online software store Ystore.
This matter was still related to video games.
To further refine its operations, the Igret online software sales platform Ystore planned to split into two parts. The original Ystore would continue to provide sales and download services for various paid or free applications, while the game software business would be spun off into a dedicated game sales platform.
Based on his personal habits, Simon had already named this new website: Steam.
Ystore was the first Igret project managed by Simon's female housekeeper, Alice Ferguson. Her current focus had shifted to the Amazon online store, but she still oversaw the software store business and attended this splitting meeting as well.
Simon's purpose in attending these meetings was merely to gain a more intuitive understanding of the development status of Igret's various businesses. The hour-long meeting mainly involved team discussions, and he did not express too many of his own views.
After the meeting ended and the others left, Simon looked at his female housekeeper, who instinctively took another sip of coffee. "Didn't you rest over the weekend?"
Alice Ferguson put down her coffee cup and replied, "I went to Chicago over the weekend to discuss the new batch of distribution center plans."
Simon nodded, aware of this matter as well.
Amazon's online store was building a new batch of large-scale logistics distribution centers. The total investment for all seven centers would reach $350 million, with an average of $50 million per center. Even years later, this would still be a substantial investment, and once completed, they would provide over 10,000 new jobs across North America.
These distribution centers were scheduled to be completed and begin operations by the end of this year or early next year. Amazon would then further expand the variety of products in its online store beyond books, videotapes, and movie merchandise, making it a significant layout for Igret's e-commerce business.
Noting the evident fatigue on the housekeeper's delicate face, Simon said, "You need to know that in my mind, Igret's businesses have a very clear product priority. The online store you're responsible for is absolutely critical, even if it fails completely, I would invest in it a second time. Comparatively, if necessary, I wouldn't hesitate to abandon the software store."
Simon had emphasized this point more than once.
Alice Ferguson, however, disagreed slightly, countering, "The software store has provided us with considerable revenue and profit over the past year."
"But you also need to see the development trend of online software sales," Simon immediately responded. "Currently, Igret's Ystore has unmatched advantages in technical support, payment tools, website traffic, and marketing promotion. Software and game developers can sell 10 million copies on our platform, whereas they might only sell 1 million copies on their own. In this sense, the 30% commission is quite reasonable. However, the internet is a very open platform. Not just Microsoft and America Online, but other independent internet companies are also trying to enter this industry. As network technology, marketing channels, payment tools, and brand awareness continue to develop, once developers find that selling their products independently is more profitable than paying a 30% commission to the software store, they will definitely prefer to do so. When that happens, what will you do?"
Alice frowned slightly.
This trend had already emerged, or rather, had always existed.
Oracle's database software and a series of major software products from Microsoft had never been available on Ystore because these companies already had very mature distribution channels, allowing them to achieve higher gross profits than Ystore's commission structure.
The housekeeper had considered lowering the commission ratio to attract these top software companies, but the current network transmission speed was not user-friendly for large software packages of several hundred megabytes. Users would rather spend a few hours downloading software than drive out and buy a physical CD in ten minutes.
With America Online's completion of the ADSL network upgrade, most internet users in North America experienced a significant speed increase. Network data transmission technology and online payment tools also matured further. When Ystore tried to secure these collaborations again, Microsoft had already launched its own software store and recently abandoned Ypay, partnering with American Express to launch its own online payment tool, Microsoft-Wallet.
Simon didn't wait for the housekeeper's response and continued, "You might think about using measures like limiting these websites' exposure on Igret's portal or refusing to provide Ypay payment interfaces to force them to sell their products on the Ystore platform. But doing so would only benefit our competitors. In Igret's product priorities, Ypay is also in the top tier. If a decision benefits the development of Ypay but harms Ystore, that decision should still be implemented. You might think these companies would completely escape Igret, but they wouldn't. Without the software store's commission, they would still need to use our Ypay tool and pay for it. Without Ystore's official promotion, they would need to spend heavily on online advertising to promote their websites, and Igret's portal is an unavoidable advertising platform. Similarly, online advertising has a higher priority than Ystore. Online payment and advertising businesses can easily create a strong-get-stronger Matthew effect, a characteristic Ystore lacks, which is why they have a higher priority."
Simon tapped his fingers on the conference table and said, "It seems we need to hold a serious meeting about this. Let's do it tomorrow." He then looked at the lady next to him. "Arrange it. Tomorrow morning at nine o'clock, everyone in the Bay Area must attend on time."
Allison nodded in agreement and made a note of it in her memorandum.
After giving his instructions, Simon looked at the housekeeper again and then told the lady next to him, "You don't need to go to Mountain View with me. Take Alice for some beauty treatments, whatever women do for relaxation, and then take her to my villa in Woodside."
The housekeeper was about to refuse, but hearing Simon's last sentence, she blushed and protested, "I still have work to do."
"Not anymore," Simon said, standing up. He had to head to the Igret campus construction site in Mountain View.
Alice sat stubbornly, glaring at Simon. "I still have work to do."
Simon glared back, "Behave, or I'll force you to take a vacation."
Alice held Simon's gaze for half a second, briefly looked away, then looked back, negotiating, "I won't go to your place tonight."
"Fine, I'll go to your place."
"…"
After Simon left, Alice finally relaxed.
Allison, who stayed behind, smiled and said, "Let's go, Alice. You really need to relax."
The housekeeper maintained her cool demeanor but did not argue with Allison. Their relationship was not particularly good, and Alice still remembered being tricked by Allison and the other women when they first met in Greenwich.
The two women left the meeting room. Simon had left a driver for them.
Despite her status, the housekeeper didn't refuse this courtesy. Allison, unfamiliar with San Francisco, called the C-lady, who arranged everything in less than five minutes.
It was nearly noon.
The two women first found a restaurant for lunch, then headed to a beauty salon near Atherton in northern Palo Alto, spending the entire afternoon on treatments.
In the evening, as they left the salon, the C-lady drove up.
Seeing Claire get out of the car, Allison looked into the car and joked, "Where's the little devil?"
"At school, busy with studies," Claire replied, hugging Allison. "Shall I call her over?"
Allison rolled her eyes.
Claire hugged Alice affectionately, complimenting, "Alice, you look even more beautiful. I'm almost smitten."
Knowing Claire was teasing her about her orientation, the housekeeper rolled her eyes too.
After greeting each other, Claire left her car and joined the other two in a single vehicle, heading to a nearby French restaurant where C-lady had reserved a table.
"Sony outright rejected us. Panasonic demanded 30% equity, which is extortion. The most infuriating was Kodak—they'd rather let their technology rot than cooperate with us. We have no choice but to rely on ourselves for the digital camcorder project."
During dinner, the three ambitious women couldn't help but discuss work.
Tinkobel was set to release the third generation iCam digital camera this Easter.
With the further spread of the internet and the rise of social networks, more users wanted to showcase themselves online, increasing the demand for digital cameras.
Despite Sony, Panasonic, and other established electronics companies launching their own digital camera products, the not-so-high-end iCam maintained a firm grip on 60% of the market share due to its brand, price, and network compatibility advantages. In 1993, its annual shipment reached 2.76 million units, a 350% increase from 610,000 units in 1992.
With such outstanding sales, Tinkobel's annual sales were estimated at $1.39 billion, with a net profit of around $120 million.
As a complementary electronic product to the internet, Tinkobel's rise was a clear indicator of the internet industry's boom.
Digital cameras enriched internet platforms with more photo content, and the internet's explosion significantly increased public demand for digital cameras, creating a symbiotic relationship.
While continuing to strengthen its digital camera investments, Tinkobel didn't stop developing other products.
Besides the secretly improving MP3 player iPlayer and the planned USB flash drive, Tinkobel also intended to launch a digital camcorder (DV) project.
Digital camcorders had a much higher entry barrier compared to digital cameras, involving patent issues.
Many established electronics companies worldwide had already started developing digital camcorders. Although most aimed at professional commercial products rather than Tinkobel's consumer goods, these established companies had a significant
advantage in patent layout and technical accumulation.
Cooperating with these companies could expedite product launch and secure patent licenses, avoiding future patent lawsuits.
However, having regretted letting Tinkobel take the lead in digital cameras, companies like Sony and Panasonic were unwilling to support Tinkobel's digital camcorder business. They either outright rejected cooperation or made unacceptable demands, forcing Tinkobel to rely on its resources.
Listening to Claire, Allison pondered and said, "I think the widespread use of home film camcorders offers a market. Tinkobel could develop a machine to convert film to digital, letting people digitize their filmed content. There's likely a big market for this."
Claire shook her head, "You've seen Hollywood's film-to-digital equipment. The full professional set costs hundreds of thousands of dollars and is very bulky. Making a home version is impossible."
Allison responded, "If not for home use, what about commercial use at photo labs? Hollywood's equipment is very specialized, hence expensive. We only need to handle home-use Super 8 films without perfect conversion quality."
Claire continued shaking her head, "If you're interested, you can try this project yourself."
The housekeeper, who had been quiet, interjected, "Given the clear industry trend towards digital, developing such a machine might have a short product lifecycle. By the time it's ready, digital camcorders could already be widespread."
Allison hesitated, wanting to argue that film and digital could coexist for a long time, like current digital and film cameras.
She ultimately remained silent.
Although digital cameras were far from replacing film cameras, digital camcorders' advantages could hasten home film camcorders' obsolescence.
Claire didn't continue the topic, instead asking about the AlphaBeta company co-founded by Allison and others. She regretted not making Allison a shareholder in her company initially, thinking it would have garnered more favor from Simon.
After dinner, the three women split into two groups.
The driver brought the car around, and Allison, linking arms with Claire, told the housekeeper, "C and I are going shopping. We're not taking you. Go home and rest early, and remember tomorrow morning's meeting."
The housekeeper hesitated, then suddenly said, "I'm going to Woodside. You need to open the door for me."
Allison was surprised and a bit disappointed, "Didn't you say you were going home? The boss might go to your place directly."
"I'm going to Woodside."
The housekeeper repeated, getting into the car.
The driver waited for Allison's instructions.
Seeing this, Allison asked Claire, "How about going to Woodside tonight and sleeping together?"
Claire glanced at the housekeeper in the car, her eyes flickering, then nodded, "Sure."
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