Michael Dell took over a month to deliberate—a patience that proves fruitful!
However, Henry and the others remain unperturbed. They're content to let Michael take his time; as long as he refrains from diving into the server business, Dell's current offerings are impressive. In Henry's previous life, Dell's server brand consistently held the top global market share, and competing against established brands like IBM is no small feat! Henry hoped that by coupling their interests, they could align the mammoth that is Dell with Noah's Ark for a seamless growth trajectory!
Historically, Cisco thrived in the server sector. Should these two companies collaborate, it would create an unstoppable force, potentially overshadowing IBM!
During this time, Henry frequented Isearch to facilitate their development. Under his explicit guidance, they quickly developed a web crawler program, but the crawling speed remained too slow—it took far too long to index a single webpage. Henry expressed his dissatisfaction, insisting they make further modifications!
If the crawlers can't perform adequately, what hope is there for successful searches?
One must recognize that the true intricacies of search engines lie in the analysis and processing of the vast amounts of data available on the Internet; the sheer volume requires robust algorithms! When users search for a term, they must receive the most precise results from a sea of information at lightning speed!
If the algorithm is inadequate, things take a downward turn. The crawl time is excessive, and the data returned may lack accuracy!
As the situation stands, this isn't a major issue, but the future's influx of data will be unprecedented! Search technology must be impressive, firmly rooted in efficient algorithms!
While Henry continued to refine Isearch, Dell finally reached out.
"Henry, I've come to a conclusion!"
"Oh? What did you decide?" Henry asked anxiously; he hoped to steer Dell away from the server market.
"Henry, I cannot agree to your proposal."
What? Dell is refusing?
Henry rubbed his forehead, feeling a headache develop. Was Dell set on pursuing its own server initiatives?
"Michael, don't rush your decision; consider it more…" Henry implored.
"Dell's diversification into hardware necessitates venturing into servers. Yet, sacrificing 30% of our shares is unacceptable. I would rather see Dell develop its servers from scratch!" Michael Dell asserted emphatically.
Henry paused momentarily before shaking his head in resignation. Michael took the equity stakes too seriously; it would be tough for Dell to relinquish that significant a share.
But he thought, doesn't Noah's Ark have anything to fear from corporate challenges?
With Noah's Ark at the forefront, they could overshadow competitors like IBM and Dell!
Henry felt a surge of determination!
At this juncture, he was no longer intent on luring Dell into the Noah's Ark camp. Any company can build a server, yet how could anyone doubt Noah's Ark's unmatched expertise in the server field?
After hanging up, Henry called for an emergency meeting at Noah's Ark. He briefed Bob Gallagher, Geely Hutt, and John Chambers on Dell's refusal.
"Dell has declined to exchange shares and plans to develop its own server! I don't need to say much; I have one request for Noah's Ark: always innovate and stay ahead! I refuse to let any company surpass Noah's Ark in the server sector!"
"Chairman, please rest assured! I, Bob, promise that if Noah's Ark falls behind, I will be the first to take the blame and resign!" Bob Gallagher assured him resolutely.
While no empire stands indefinitely, expressing urgency is a natural reaction. Bob Gallagher excels as a professional manager and maintains a firm operation at Noah's Ark. Henry was reluctant to lose such talent; thus, he waved dismissively.
"You don't need to resign if you fulfill your obligations in good faith! I won't hold you accountable!"
"Understood!" Bob Gallagher nodded, visibly moved by Henry's trust.
---
Not long after, Dell held a press conference to announce its entry into the server market.
"Dell will establish a server division and aggressively pursue our diversified hardware strategy! We have allocated $50 million for this endeavor, and we're determined to become a leading server provider!" Michael Dell announced passionately.
Following the revelation, Dell's stock saw an immediate increase of $1.70 that very day.
Dell is not merely making claims; their actions are substantial! Within a week, Dell acquired three server companies at astonishing speed. Henry learned of these acquisitions only after negotiations were successfully concluded. Clearly, Michael Dell had long been strategizing, discreetly contacting three server vendors, engaging them in preliminary discussions!
Post-negotiation, Dell proceeded to make formal acquisition proposals, swiftly signing agreements within moments of concluding discussions.
Henry felt blindsided by Michael Dell's shrewd maneuvering!
Henry had little to say regarding Michael Dell's approach—after all, Dell would undoubtedly face consequences sooner or later!
Upon returning to the office, Henry learned from Helen that AOL was preparing to go public. Curious, he inquired further and discovered that AOL was burning through money this year. In addition to developing their website, they also provided dial-up Internet access services—a seemingly wasteful endeavor.
Initially shortsighted, AOL simply aimed to generate traffic for their website while offering users Internet access. However, with the acceleration in the National Science Foundation Network and heightened coverage, the influx of users connecting online surged, resulting in rich profits from AOL's dial-up services. They may rent infrastructure and existing telephone lines, avoiding the heavy capital expenditures required to build their own network!
Although the AOL website was losing money, their dial-up services yielded impressive financials. As the volume of dial-up services grew, so too did traffic to AOL's website! With such fortuitous circumstances—and given that AOL had yet to IPO—Sequoia Capital must be frustrated, knowing they were just burning cash rather than turning a profit!
Despite the enticing financial reports, AOL endured immense financial pressure. Should they continue incurring losses for website development or for renting network channels? As such, funding was now paramount! An IPO would be the best solution!
With Sequoia Capital's assistance, AOL's proposal to list on NASDAQ received swift approval.
Steve Case embarked on a series of roadshows across major U.S. cities.
Upon hearing this, Henry felt a frown crease his brow.
With AOL poised to seize its moment to go public, any possibility of outmaneuvering them would undoubtedly intensify after the IPO.