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In fact this is a complete myth. Microsoft did not "keep Apple afloat." Not only did Apple have over a billion dollars in cash on hand at the time at the time, the Microsoft "investment" in Apple was a settlement for a long-standing lawsuit. Neither a rescue nor the Department of Justice had a single thing to do with it.

Die myth, die.

Absolutely; this is one of the most ridiculous yet widespread rumors of all...MS invested only a petty amount of 100 million for some cross-licensing deals, equivalent to a (very) minority stake in Apple, nothing else. With that, they also committed to continuing development of Mac Office for 10 years or so, a token well received by the market in those difficult times for Apple.

What, in fact, kept Apple afloat was the streamlining begun by Amelio and continued by SJ, after the disasters brought by Sculley and Spindler...
 
For the record, it was $150 million in non-voting stock, and probably more cash behind the scenes, which was never reported publicly. The commitment to Office for the Mac was five years, and Apple agreed to make MSIE the "default" web browser for the MacOS. Somewhere along the line, this deal morphed into the ridiculous "Microsoft saved Apple" myth. God only knows how.

Also for the record, Apple still had all that dough on hand in 1997 even after losing money for a couple of years because Scully was actually a good manager. He'd recorded Apple's biggest profits to date. What he was not was a good technologist.
 
Wow, check this out. AAPL closes down $4 and change at $162.00. All that doom and gloom yesterday translated into nice little profits for the investment bank douches. Now come the best 2 quarters of the year. New products, product refreshes, and Apple will beat their own cautious guidance. Just make sure you sell before the next earnings conference call.:D
 
I think a lot of people missed this article regarding the surgery that Steve had which is why he is so thin. Quoted below:

And there's also the point to consider that Steve has always been a strict vegan and focused on his diet. So much so that he initially refused to have surgery after being diagnosed with pancreatic cancer, instead adopting an even stricter diet designed to counter the cancer. When that didn't work, he eventually resorted to the surgery.

My guess is that since his surgery, knowing Steve, he has been on the strictest of vegan diets in an effort to maintain his optimal health post-cancer. Combine this dieting with the natural weight loss/fluctuations of a post-operatic pancreatic cancer patient as described in that article, and Steve's recent thinness doesn't bother me so much. Calling it a "private matter" isn't something we necessarily need to read into too deeply. His health certainly may be fine and private.
 
For the record, it was $150 million in non-voting stock, and probably more cash behind the scenes, which was never reported publicly. The commitment to Office for the Mac was five years, and Apple agreed to make MSIE the "default" web browser for the MacOS. Somewhere along the line, this deal morphed into the ridiculous "Microsoft saved Apple" myth. God only knows how.

But there was still some truth in it and I think continuing legal entanglements with Microsoft would have led to Apple's demise. In 1997, Apple was bleeding cash and the ongoing litigation against Microsoft was going to make that bleeding worse. So sure, it's debatable whether or not the $150M investment "saved" Apple, but it sure didn't hurt them the way many more years of expensive litigation would have.

And as someone who was using Macs through the dark times of 1996, I can honestly say that it sure felt like Apple was about to die. I remember Macs disappearing off store shelves. The Mac sellers shut their doors or replaced the Macs with Windows boxes. I watched Macs disappear from businesses and be replaced with PCs. And Mac software and compatible peripherals suddenly got harder and harder to find. And worst of all: Macs really sucked back then. Can anyone really look at the Performas and say that was the way to build customer confidence? Hell, I was ready to jump ship after a few years of suffering with a wretched Performa 6200 and a series of monitors that kept dying and being replaced by Apple. The products were awful.
 
But there was still some truth in it and I think continuing legal entanglements with Microsoft would have led to Apple's demise. In 1997, Apple was bleeding cash and the ongoing litigation against Microsoft was going to make that bleeding worse. So sure, it's debatable whether or not the $150M investment "saved" Apple, but it sure didn't hurt them the way many more years of expensive litigation would have.

I've seen the substance of this event abused so much, you aren't going to get me to agree that there's any real truth in the "Microsoft saved Apple" myth. A whole lot of spin, but no actual truth. There's no indication whatsoever that Apple was losing any significant amount of money because of their legal issues with Microsoft. They were losing money because Mac sales were plummeting. In fact it's clear from the outcome that Apple had the upper hand in this lawsuit.

In one of his first acts as CEO, Steve Jobs turned this settlement into a major publicity coup. For his trouble, Bill Gates got to appear on the big screen at MacWorld (and get booed, as we all remember), and announce that MSIE was now the "default" web browser for the Mac. I laughed at the time about how this was spun by the media as "Bill wins again," apparently because they didn't know how else to understand it. Sadly, it's still being spun that way over ten years after the fact. The reality was that Gates did not win that round at all.

A number of things saved Apple -- all of which were smart moves made by Steve Jobs. This happened to be one of the first.
 
I've seen the substance of this event abused so much, you aren't going to get me to agree that there's any real truth in the "Microsoft saved Apple" myth. A whole lot of spin, but no actual truth. There's no indication whatsoever that Apple was losing any significant amount of money because of their legal issues with Microsoft. They were losing money because Mac sales were plummeting. In fact it's clear from the outcome that Apple had the upper hand in this lawsuit.

In one of his first acts as CEO, Steve Jobs turned this settlement into a major publicity coup. For his trouble, Bill Gates got to appear on the big screen at MacWorld (and get booed, as we all remember), and announce that MSIE was now the "default" web browser for the Mac. I laughed at the time about how this was spun by the media as "Bill wins again," apparently because they didn't know how else to understand it. Sadly, it's still being spun that way over ten years after the fact. The reality was that Gates did not win that round at all.

A number of things saved Apple -- all of which were smart moves made by Steve Jobs. This happened to be one of the first.

Very well stated, and oh so true.
 
I won't pretend to know much about the exchange of $$$ from Microsoft to Apple, as that was beyond my computing days, but I did manage to find this article dating back to 1997...

Microsoft sinks $150 million into Apple

If its to be believed, Apple was bleeding market share, which would mean profits. In addition, it was cutting its R&D budget... The analyst also believed the $150 million investment "really does keep Apple going."

So while I wouldn't equate this to "Microsoft saved Apple", it does seem
$150 million helped Apple.
---
On another topic, during the time of this article, less than 40% of Americans had a home computer!!
 
If its to be believed, Apple was bleeding market share, which would mean profits. In addition, it was cutting its R&D budget... The analyst also believed the $150 million investment "really does keep Apple going."

Of course it did not hurt, but the analyst was wrong, as were most of them at the time. As I pointed out before, Apple was sitting on over $1 billion in cash at the time of the Microsoft "investment" (with no debt), so while they were indeed losing money at the time, they were nowhere close to being in critical financial shape. As I also pointed out, this event was widely misrepresented in the media. Very few journalists paid any attention to the small print of the deal, the "technology sharing agreement," which represented the settling of the patent disputes, very much in Apple's favor.

You have to understand the state of the computer business during the '90s. Microsoft was at the height of their power and influence. They got everything they wanted, by hook or by crook. Consequently, everything Microsoft did was interpreted as yet another expansion of their dominance. Bill wins again! The idea that Bill might lose a round never even occurred to most of the media, so they spun the $150 million "investment" as some sort of victory for Microsoft. It's even more laughable now then it was at the time, but that's what happened.
 
Of course it did not hurt, but the analyst was wrong, as were most of them at the time. As I pointed out before, Apple was sitting on over $1 billion in cash at the time of the Microsoft "investment" (with no debt), so while they were indeed losing money at the time, they were nowhere close to being in critical financial shape. As I also pointed out, this event was widely misrepresented in the media. Very few journalists paid any attention to the small print of the deal, the "technology sharing agreement," which represented the settling of the patent disputes, very much in Apple's favor.

You have to understand the state of the computer business during the '90s. Microsoft was at the height of their power and influence. They got everything they wanted, by hook or by crook. Consequently, everything Microsoft did was interpreted as yet another expansion of their dominance. Bill wins again! The idea that Bill might lose a round never even occurred to most of the media, so they spun the $150 million "investment" as some sort of victory for Microsoft. It's even more laughable now then it was at the time, but that's what happened.
And from what I understand, Microsoft's purchase $150 million non-voting share of the company was sold off soon after the announcement.
 
And from what I understand, Microsoft's purchase $150 million non-voting share of the company was sold off soon after the announcement.

Nobody outside of Apple or Microsoft knows for certain when the share were sold, but they were required to hold them for at least three years, and it's generally assumed that they disinvested themselves as quickly as they could. The shares added another persistent myth to the mix, that "Microsoft owns a big chunk of Apple." It never was more than 5% of the outstanding shares, and as you point out, they never could vote them.
 
Of course it did not hurt, but the analyst was wrong, as were most of them at the time. As I pointed out before, Apple was sitting on over $1 billion in cash at the time of the Microsoft "investment" (with no debt), so while they were indeed losing money at the time, they were nowhere close to being in critical financial shape. As I also pointed out, this event was widely misrepresented in the media. Very few journalists paid any attention to the small print of the deal, the "technology sharing agreement," which represented the settling of the patent disputes, very much in Apple's favor.
I'm asking purely out of curiosity, but do you have any source that Apple was sitting on $1 billion cash? That seems like quite a bit of money (considering Microsoft only had $9 billion at the time) for a company that was in supposedly such bad shape.
 
I'm asking purely out of curiosity, but do you have any source that Apple was sitting on $1 billion cash? That seems like quite a bit of money (considering Microsoft only had $9 billion at the time) for a company that was in supposedly such bad shape.

http://news.cnet.com/2100-1001-202143.html

More than $1 billion. The rumors of Apple's demise were exaggerated. Apple was in bad shape at the time, but not because they were in debt, but because they were losing money, and market share for their products. But they'd built up quite a nice cash reserve during the Scully years and could quite readily have weathered the storm without Microsoft's money.
 
http://news.cnet.com/2100-1001-202143.html

More than $1 billion. The rumors of Apple's demise were exaggerated. Apple was in bad shape at the time, but not because they were in debt, but because they were losing money, and market share for their products. But they'd built up quite a nice cash reserve during the Scully years and could quite readily have weathered the storm without Microsoft's money.

Thanks. But reading the article, I come off with the vibe that the rumors weren't exaggerated... While the money wasn't the thing to keep Apple alive, it seems Mac Office support was...

"If they withdrew Office support, that would have been the straw to break Apple's back."
 
The deal with Office was arguably Apple's biggest win in all of this. Office made Macs viable for much of their user based as they needed compatibility with their jobs. Back in those days, people didn't own multiple computers like they do today and there was no running DOS or Windows on a Mac back then. (Apple's DOS compatible model excepted). Without Office, many would have gone to DOS and later, Windows.
 
Thanks. But reading the article, I come off with the vibe that the rumors weren't exaggerated... While the money wasn't the thing to keep Apple alive, it seems Mac Office support was...

It's debatable. The spin at the time was that Microsoft was throwing Apple a lifesaver. The reality was, continuing Office development was a good business decision for Microsoft. They weren't doing it just to help Apple, and I'm reasonably certain they'd have done the same thing in any event.

Apple was in trouble in 1997, no question, but they were not teetering on the brink of bankruptcy, which is the popular misconception. The other popular misconception is that it was the good graces of Bill Gates that pulled Apple's nuts out of the fire, when nothing could be further from the truth. It was Steve Jobs who engineered this great publicity stunt, and it was Jobs who executed on more and better products.

The deal with Office was arguably Apple's biggest win in all of this. Office made Macs viable for much of their user based as they needed compatibility with their jobs. Back in those days, people didn't own multiple computers like they do today and there was no running DOS or Windows on a Mac back then. (Apple's DOS compatible model excepted). Without Office, many would have gone to DOS and later, Windows.

As above, I think this was more spin than reality. Having Bill Gates appear on the big screen at MacWorld to announce that Microsoft wasn't going to pull the plug on Office for the Mac (as if this had been the previously announced plan?) was a great publicity stunt, but I don't confuse this with any sort of reality.
 
An interesting article from today. Note the fallacy, " when Microsoft threw the then-struggling Mac maker a $150 million lifeline."

Link

"What now, Steve?"

That's the question a lot of Microsoft shareholders (and very likely employees) are asking after Steve Ballmer last night announced yet another new plan for Microsoft's struggling online division.

Three years after merging the Widows and online divisions, Microsoft is now going to split them up and Kevin Johnson, currently president of the Platforms and Services Division, is leaving the company to become CEO of Juniper Networks.

The backdrop of Microsoft's moves is the dual threat it is facing from cloud computing on the one hand and Apple on the other. Ballmer addressed both issues in a memo to Microsoft's staff:

"The success of Windows is our number one job," Ballmer wrote. And while that might seem obvious, Microsoft's crown jewel faces threats from both Linux-based software and Google's push into the enterprise space.

Meanwhile, Ballmer also acknowledged that "Apple is thriving," showing how far the industry has come since 1997, when Microsoft threw the then-struggling Mac maker a $150 million lifeline.

In reaction to Apple's current success, Microsoft is "changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises," Ballmer wrote.

The bottom line is no technology leader has gone through such a "paradigm shift" as is occurring now and emerged as a leader on the other side, as Microsoft is trying to accomplish.
 
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