Gresham's Law: A Gentle Beginning
Gresham's Law began with a mild touch. Yoo Jae-won sent a crisp warning letter under his own name to Chandler's Free Software site, currently the largest warez site in the United States. The email stated that if the site did not clean up its illegal content, legal action would follow. In Korea, sending a formal notice by registered mail would signal the start of legal proceedings, but Chandler's Free Software site had no office or operator information registered at all. The only publicly available detail was the site master's email address, so that was all he could use.
"Of course they'll ignore it." Yoo Jae-won had never expected his demand to be accepted in the first place. Naturally, follow-up measures were already prepared: a request for a preliminary injunction to shut down the site, a formal closure order, and a damages lawsuit would all be filed simultaneously in federal court. Yet this was merely the beginning, not the end.
Yoo Jae-won had no doubt that his lawyers would prevail in court. Still, he prepared independent countermeasures for good reason. "If the courts could solve everything, the world would have become a utopia long ago." Court rulings often failed to resolve problems, especially when dealing with crimes in emerging technological fields like warez that current laws had not yet fully addressed. Even if a shutdown order was issued, variants with new names and operators would appear almost immediately.
Yoo Jae-won had not casually asked Allen, the head of legal affairs, about fake files and viruses. He had inquired because he intended to execute both legal measures and powerful tactics that walked the tightrope between legality and illegality at the same time.
Yoo Jae-won began simply with a DDoS attack. DDoS involved flooding a site's server with more connection requests than it could handle, preventing other users from accessing the service. It could also paralyze security programs and create vulnerabilities. Fortunately, Chandler's Free Software used Linux as its server operating system. Linux, which appealed strongly to hackers and those who wanted full control over their setups, still held a small but steadily growing market share. Yoo Jae-won considered this fortunate. Had the server run Android Enterprise Edition, he would have faced the awkward situation of attacking his own creation. Linux eliminated that contradiction.
Moreover, Linux was still in its infancy. Because many people directly modified the kernel source, it contained numerous vulnerabilities unknown to ordinary users.
"Done." Yoo Jae-won finished configuring the DDoS attack using every computer he could mobilize. A single click of the execute button would make Chandler's Free Software inaccessible. He did not launch the attack immediately, however. Less than thirty minutes had passed since sending the email. The recipient deserved at least a few hours to draft a reply.
"It should work out perfectly if I meet Jerry and David and come back." Yoo Jae-won decided that the time required for his meeting with Jerry and David would give the operator of Chandler's Free Software sufficient opportunity. If no reply arrived by then, the attack would begin. Even if a reply came, any response that failed to meet his demands would trigger the attack.
That afternoon, Yoo Jae-won met Jerry and David again at the school café. A bodyguard drove him to campus. When he had lived near the school, he could have ridden his electric bicycle and arrived quickly, but after moving to Sausalito the distance had become too great to manage without a car.
Jerry and David appeared to have arrived early and were already waiting. The moment Yoo Jae-won entered the café, they jumped to their feet to greet him.
"Oh? What's wrong with your faces? Have you been working on improving the search engine every single day?"
Yoo Jae-won had also recognized them and hurried over, but instead of a greeting, the first words out of his mouth were a comment on their appearances. Both men had dark circles so heavy they reached their cheekbones.
"Embarrassingly, that's not it."
"We just couldn't finish deciding between option one and option two."
Jerry and David spoke with obvious embarrassment. Their simple email had stated in two sentences that they chose option two, yet they had apparently still been debating the matter.
"Huh? Does that mean you're switching to option one? I already brought the contract and the deposit."
The mention of the deposit made Jerry and David's eyes widen. Yoo Jae-won had no intention of accepting any last-minute change of heart. While Jerry and David had made progress with current internet search engine technology, their work still did not fully satisfy him. He had considered future developments and, if those also fell short, planned to release his own superior technology publicly. Therefore, the best approach for him was option two: letting Nextcom use the search engine for a set period while monitoring future trends.
"The deposit?"
The word "money" instantly changed their expressions. They were not worshippers of wealth, but money was what they needed most right now. Only a week had passed since Nextcom began running advertisements, yet traffic to Jerry and David's Internet Guide had increased tenfold. The volume of search queries was overwhelming the server they had borrowed from Stanford's computer lab. In the original timeline, this had not happened. Yoo Jae-won's aggressive push for the information superhighway and his early success with the internet had changed everything. Korea had reacted most enthusiastically because he was Korean, but America had not remained lukewarm either. Most decisively, although limited to the California region, commercial high-speed ADSL service had launched, causing a surge in the number of netizens.
Because running the Internet Guide service had brought other campus networks to a standstill, the school had issued an ultimatum: acquire servers and become independent as quickly as possible, or the service would be forcibly shut down. While Stanford encouraged student entrepreneurship, there were limits. From the school's perspective, the two men's site was already a success. All they needed was an investor to build out the servers. The school had even offered to help recruit investors if the pair found it difficult. That suggestion was meaningless to two people who had already landed a big fish named Yoo Jae-won, but the server problem remained real.
"Then may we see the contract?"
David stepped forward while Jerry remained frozen at the mention of the deposit.
"Of course. It's simple, but please read it carefully. You can only review it here, though. This is also corporate confidential information."
Yoo Jae-won took a copy of the contract prepared by the legal team from his briefcase and handed it to them. The contract was only three pages long. Typical insurance contracts were as thick as books with tiny print. Insurance contracts required extensive detail, but compared with most corporate agreements, ID Group's contracts were genuinely concise because they contained only the essential terms.
The contract offered to Jerry and David was no different. The most important sections covered the duration Nextcom would use their search engine and the usage fees. It also clearly addressed management of the search engine and ownership of derived data. Search queries entered by users belonged to Nextcom, while data collected by the search engine's bots belonged to Jerry and David. Metadata created when the two datasets interacted would be copied and shared equally. Hardware management of the servers running the search engine fell to Nextcom, while maintenance of the search engine itself remained Jerry and David's responsibility. Ownership of the search engine stayed with Jerry and David. The contract would automatically renew if both parties wished, and fees would be recalculated based on user response and usage volume.
Despite the vast difference in negotiating power between the established conglomerate Nextcomcast and the startup founded by Jerry and David, the contract had been drafted with remarkable fairness. The two men, however, did not immediately focus on those terms.
"So the deposit paid immediately is twenty percent of the annual usage fee, and the remaining eighty percent is paid in four quarterly installments?"
"But the usage fee section is blank?"
As expected, the usage fee was the first thing they examined.
"Yes. We can't unilaterally decide the fee. We'll determine it here, fill in the blank, and stamp the contract to finalize it. I brought my checkbook, so once the contract is signed, I'll hand over the payment right here."
Jerry and David nodded simultaneously at Yoo Jae-won's explanation. A thick tension rose between them. After nearly a year of working together on the Internet Guide, they were about to have its value assessed in this very moment. Interestingly, the debate they had been having before Yoo Jae-won's arrival—whether accepting equity investment under option one might be better—had completely vanished from their minds without either of them noticing.
"There's no need to be nervous. Since I'm the one buying your work, I'll make the first offer. If you like it, sign. If not, we can negotiate the amount."
Yoo Jae-won took the lead with practiced ease. Jerry and David simply nodded. When they had stopped him outside the professor's lab, they had thought they could handle him easily. They had assumed that launching into technical discussion would secure the investment without difficulty. Everyone had plausible plans, but then and now, the two men found themselves swept along by Yoo Jae-won's pace and never managed to present the scenario they had prepared. They simply waited, hearts pounding, to hear how much he would offer.
A brief silence fell. It could have been uncomfortable, yet Yoo Jae-won seemed to enjoy it, even taking a sip of coffee. His demeanor was completely natural.
"How about three million dollars a year?"
When the tension reached its peak, Yoo Jae-won stated the figure naturally. Jerry and David drew in sharp breaths. Their reaction was ambiguous. Yoo Jae-won could not tell whether they thought the amount was too low or too high. From his perspective, it was an extremely low price. Left alone, Jerry and David's Internet Guide would have evolved into the portal site Yahoo. The current internet portal landscape consisted of the original Nextcom and its followers. No competitor with the capital or technology to challenge Nextcom had yet appeared, but that would change once Yahoo launched. If he could confine that Yahoo to Nextcom's search engine, three million dollars was a bargain. Factoring in the additional profits Nextcom would earn from an upgraded search engine, the deal was highly favorable to Yoo Jae-won.
"Hmm, I suppose that's not the amount you had in mind?"
"Ah, well—"
"Then four million dollars."
Before Jerry could speak, Yoo Jae-won raised the offer by another million.
"This is the best Nextcom can do."
In ordinary negotiations, one usually started below expectations and gradually increased the price. Yoo Jae-won felt sorry using that tactic on these two, however. His appearance had made their future uncertain, and he wanted to give them something substantial. Nothing expressed sincerity more clearly than money. Besides, his personal fortune could easily absorb an additional million dollars.
"Wow, four million!"
"We'll take it! That's perfect!"
The two shouted their acceptance almost simultaneously, as if afraid the offer would disappear if they hesitated even a second. In truth, even three million dollars far exceeded their expectations. The endless discussions between Jerry and David over the past week had centered on whether they dared to ask for one million dollars in fees. Neither had truly believed they would receive the full amount. Jerry had wanted to start at one million and negotiate downward, while David feared that such an aggressive figure would break the deal entirely. With no agreement between them, the idea of selling equity had surfaced instead.
Then three million had appeared out of nowhere. Their thought processes momentarily froze. Before they could recover, another million was added. Both men came from ordinary families, so sums in the millions still felt abstract. Reality seemed to slip away, yet the thought that they must not miss this opportunity remained strong. Both accepted at once.
With everyone in agreement, the contract was finalized in moments. The usage fee of four million dollars was written in, and signatures filled every copy. Yoo Jae-won produced two additional identical documents and repeated the process. Normally two copies sufficed, but he had prepared an extra for notarization.
"Then let me give you the deposit."
At Yoo Jae-won's words, Kim Dae-seok, who had been standing behind him, handed over the checkbook. Although Yoo Jae-won usually used only credit cards, writing a check proved simple. He filled in eight hundred thousand dollars—twenty percent of the annual fee—wrote Jerry and David's names as payees, added his signature, and it was done.
"This checkbook is from HSBC. You can cash it immediately at any HSBC branch."
Jerry and David accepted the contract and the check with dazed expressions. They still seemed unable to grasp what had happened.
"Please prepare everything as quickly as possible and send the search engine source code and database to Nextcom. On the day we receive them, Nextcom's search engine will switch to your creation, and that day will mark the start of the one-year contract."
"Pardon? Ah, yes!"
"By the way, have you decided on a name for the search engine? Proper marketing requires a solid name. 'Jerry and David's Internet Guide' isn't bad, but it carries a rather amateurish feel."
"Ah, does it?"
The two men, who had been turning the check over in their hands, looked troubled at the observation. They had considered giving the temporary name a proper replacement, but had not yet devoted serious thought to it. Improving the search engine, solving the server issue, and recently dealing with Yoo Jae-won's investment proposal had pushed naming to the bottom of their priorities.
"If you haven't settled on anything, may I make a suggestion? How about Yahoo?"
Yoo Jae-won was direct. Since they now had a formal contract with Nextcom, they needed a proper name, and that name naturally had to be Yahoo. His intervention had altered the original flow, however, and he suspected the name Yahoo might never appear. So he offered it himself.
"Hmm, it's a word from Gulliver's Travels, right? Feels a bit odd."
"No, it has presence. We can even use Chairman Yoo's name during PR."
"Oh? That's true."
Jerry and David accepted the suggestion immediately, their self-interest plainly visible. Yoo Jae-won, who had worried they might refuse, felt relieved.
"No other matters, then?"
Afterward, Yoo Jae-won rose from his seat. While post-contract celebrations were common in America, neither Jerry nor David were the type to enjoy such gatherings, and both had urgent work waiting. Yoo Jae-won also had remaining tasks, so he concluded the meeting with a firm handshake. It had been a successful negotiation.
Upon returning home from school, Yoo Jae-won went straight to his computer. He had left it running before going out, so no boot-up was necessary. Turning on the monitor was enough.
"As expected."
His previously empty inbox now contained more than ten new messages after spam removal. There was still no reply to the email he had sent to Chandler's Free Software. The delivery record showed the message had been read several hours earlier, yet no response had arrived.
"This side never deviates from expectations."
Grumbling, Yoo Jae-won began the attack. He executed the DDoS program he had worked so hard to create. Computers in data centers, the ID Group network, and various organizations he could influence responded instantly to his command. Thousands of machines simultaneously connected to Chandler's Free Software site, causing traffic to explode. The ID web browser he had opened for monitoring began to lag, then displayed a message about delayed connections due to high traffic.
As time passed, the messages changed. A timeout appeared, followed by an internal server error. The server had gone down.
Beyond attacking Chandler's Free Software, Yoo Jae-won also struck other warez sites. Because those sites allowed anyone to upload files freely, he used a different method: flooding them with massive numbers of fake files. This quickly exhausted server storage capacity and made file sharing difficult through sheer volume.
"I've used the whip enough. Time to offer the carrot."
Yoo Jae-won had no intention of relying solely on punishment. He had long prepared an irresistible incentive: a massive sale. He spun off the section of Nextcom that sold paid software into a separate site and launched an unprecedented promotional event to celebrate the launch. Several older titles were even offered for free. Keyboard Warrior and Wolfenstein, still enjoyed by a fair number of users, were released without charge. Doom 1 received a seventy-five percent discount, while the latest version, Doom 2, went on sale at fifty percent off. Games from studios under ID Entertainment received similar treatment. It was an overwhelming volume offensive.