Frank poured cold water on the situation, pushing a financial report across the desk to Takuya Nakayama, his brow furrowed.
"While GG revenue is rising and ICQ's premium mbership service covers so of the costs, server and bandwidth expenses are a bottomless pit. The more users we gain, the more data we have to store. And lately, the growth curve has started to flatten."
His hair had visibly thinned over the past six months.
As CEO, he had to keep an eye on the growth curve, watch those troublemaking competitors, and monitor the soaring monthly bills.
Especially since the end of last year, when Mosaic released version 1.0, announcing support for Apple Macintosh and Microsoft Windows. This made the Internet accessible to ordinary people, allowing them to browse pages with ease.
User attention was being fragnted.
Frank's imdiate reaction was: "We need to get on board. We need to move the entire BBS to the web."
This would allow users to log in and post without downloading the cumberso client, all through the Mosaic browser.
If Takuya Nakayama hadn't intervened, Silicon Valley Online might have truly gone "naked"—aning it would have launched without proper security asures.
"Rember that proposal about Mosaic?" Takuya Nakayama asked, setting down his report and turning his gaze to Frank.
Frank smiled wryly and rubbed his temples. "How could I forget? At the ti, I thought you were being too cautious. But after we discussed and evaluated it, we realized the security of the protocol was indeed lacking."
"Users are our most valuable asset, Frank. If Sequoia Capital ever discovered our user passwords floating around the internet, Donald would be the first one to co over and strangle you," Takuya Nakayama said, his tone lacking any real amusent. "Security is always the bottom line."
In the end, they adopted a compromise—a "showcase strategy." They created a mirror server for the Silicon Valley Online BBS and put the mirrored content on their website.
Users could read the latest technical posts, follow the debates among experts, and even see introductions to star projects like "TaWiz." But if you wanted to reply? To send a private ssage? Sorry, please click that prominent "Download Client" button.
This approach not only avoided security risks but also successfully drew web traffic back to the client application.
Those tourists who had only intended to browse casually were so captivated by the content that they couldn't resist and dutifully boosted the download numbers.
"But that's not the most headache-inducing thing," Frank sighed, pulling out a new chart from the pile of files. "It's this feature you insisted on adding—image uploads."
Two weeks ago, the BBS had undergone a major upgrade, enabling image insertion in posts. This was a ga-changer in the all-text, green-character world of BBS platforms.
The impact was imdiate.
Previously, in the "Hardware Enthusiasts" section, users could only dryly describe how cool their new cases were. Now, they could simply post photos, creating a hundred tis the visual impact.
The "Pets" section was instantly overrun with low-resolution photos of cats and dogs.
GG vendors went wild. Even a single product image with a pitiful resolution was far superior to their previous text-based descriptions.
User activity surged dramatically.
"Isn't that a good thing?" Tom Kalinske leaned in to take a look. "The 'Show Off Your Workstation' event alone has over ten thousand participants."
"It's great, so great it's about to stop my heart," Frank said, pointing to the red curve in the bottom right corner of the chart that was soaring alongside user activity. It represented bandwidth costs. "Image data is hundreds of tis larger than text! Thousands of tis! Last week, our bandwidth costs tripled! Tripled!"
He snatched up a calculator, punched in so numbers with a frantic clatter, and showed Takuya Nakayama the staggering figure. "At this rate of burning cash, unless we raise our GG fees tenfold, next quarter's earnings will be a disaster. Wall Street doesn't care how sticky your users are; they only care if your earnings per share are positive."
Frank was genuinely anxious.
Though the board hadn't issued any harsh warnings or set imdiate profit targets, his pride as a professional manager couldn't stand it. To him, even a billion-dollar valuation was just a la giant if it wasn't profitable.
"That's the Internet, Frank," Takuya Nakayama said, looking at the painful bill with a smile.
He stood up and walked to the window, gazing out at the bustling streets of Silicon Valley.
"If you're already counting the money now, it ans we're not thinking big enough. Bandwidth costs are high, but they're the necessary entry fee." He turned and pointed to the calculator in Frank's hand. "Don't just stare at the expenses. Think about it: once users are used to posting and viewing images here, and eventually videos, will they still tolerate competitors who only allow plain text?
"We're using this money to dig our moat deeper—so deep that anyone who glances at it will despair."
Frank froze, staring at the report in his hand. He remained silent for a few seconds.
"Damn it, you always find the perfect justification for spending money." Frank tossed the report back onto the table, let out a long sigh, and the worry lines on his face faded, replaced by a gambler's ferocity. "Alright, if we're digging, let's dig deeper. I'll talk to PSInet and see if we can sign a long-term contract to lower the bandwidth price per unit."
"That's the spirit," Tom said, patting Frank's shoulder with a smirk. "Don't always try to save money for the shareholders. Sequoia won't panic until they see us going bankrupt. As long as we're burning cash to expand, they'll just think they picked the right horse."
Takuya Nakayama smiled and nodded, knowing he had passed Frank's test.
In this wild era, only those who dared to burn their last cent were qualified to define the future.
"However," Takuya shifted his tone, "simply burning money isn't a sustainable strategy. I have a new idea about how to convert this traffic into real cash flow, which might alleviate so of your anxiety."
Frank and Tom both looked up simultaneously, their eyes lighting up like sharks slling blood.
Instead of imdiately revealing the solution that would instantly ease their cash flow concerns, Takuya asked a seemingly unrelated question:
"Frank, roughly how many websites are there in the U.S. right now?"
Frank blinked. That was a good question.
As CEO, he didn't have exact figures at his fingertips, but he had a general idea.
After a mont's thought, he gave a conservative estimate: "It's hard to get an exact count, as new servers connect to the internet every day. But based on MIT's estimates, it's likely over a million. And that number is still growing rapidly."
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