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  1. #1
    Plutonium Lounger Medico's Avatar
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    MS bails out Apple: History lesson

    Something most people did not know, or did not remember, back in 1997 the "Evil Empire" MS bailed out a struggling Apple with a $150 million dollar loan, which then allowed Apple to turn into the company they are today. Watch the story at Wired. (It took a while to load on my PC)
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    As I recall it wasn't loan, but an investment involving shares changing hands and access being granted to markets. A sensible business deal that had benefits for both parties.

    Clearly Apple got a cash injection which, in those days, it needed to launch its new R&D drive and to take it into the new millennium with plans for products that would come to dominate. Microsoft got a pocket full of Apple shares (I wonder if they still have them?) and an agreement from Apple to allow MS Office onto it's products for 5 years, plus some relaxation on some patent stuff I think.

    We all know what happened in the following years, but at the time it was a sensible deal for both parties that both Gates and Jobs thought was important. Probably Jobs felt it more important to Apple than Gates did to Microsoft, but Gates got a pretty good return on that investment in the short term. Office for Mac has gone from strength to strength and still sells loads of copies and is supported as a core Microsoft product. Apple R&D used the investment wisely and came up with the iPod and never looked back. I wonder then who got the better long term return?

    BTW, you do know the title reads as if Microsoft did this recently rather than 15 years ago?
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  3. #3
    Plutonium Lounger Medico's Avatar
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    I realize that. I thought the title might get more exposure than stating this happened so long ago.

    I think probably in the long term Apple benefited more. They were close to bankruptcy when this occurred. They are "slightly" better than that now. It appears they invested wisely!
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    I just looked up an article that describes the announcement of the deal. There was an amazing closing summary from Steve Jobs, which many people could do well to reflect upon:

    Quote Originally Posted by Steve Jobs @ Mac World Expo, 6th August 1997
    If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple has to do a really good job. And if others are going to help us that's great, because we need all the help we can get, and if we screw up and we don't do a good job, it's not somebody else's fault, it's our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we better treat the company that puts it out with a little bit of gratitude; we like their software. So, the era of setting this up as a competition between Apple and Microsoft is over as far as I'm concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.
    It was time to bury the hatchet then, and it should remain buried 15 years later. The world and the tech market is utterly different now and the challenges ahead affect both companies and their users. No OS or hardware platform exists in isolation - what affects one affects us all.
    Last edited by Tinto Tech; 2012-08-02 at 20:26. Reason: minor typo
    In God we trust; all others must bring data.

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  5. #5
    Plutonium Lounger Medico's Avatar
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    So true. Perhaps if these giants today reflected back on those early days, they could improve things today. Yes, competition is healthy, but aggression against that competition can have just the opposite affect. That was a time when 2 companies that are now the giants of this industry worked together for a common goal. People today could learn from that.
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    Microsoft didn't care whether Apple failed, the US anti trust regulators didn't want a one horse show and said MS must help Apple survive. Dress it up anyway you like, but it had nothing to do with good (or bad) business.

    cheers, Paul

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    Paul, I don't recall anything in the press at that time that alluded to what you are stating. Usually when this sort of thing happens, the press do a pretty good job of spinning up that alternative motive.
    Chuck

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    I don't recall that the DOJ forced MS to support Apple, but MS was already facing monopoly investigations over a number of issues, and had several times used the fact that Apple existed as a defence, pointing out that there was no monopoly in desktop OS's. It would have made their interaction with the DOJ much harder if Apple did go under, and this was reported at the time.

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