Apple owes Microsoft big time ?

netlover · Apr 14, 2007

I just finishing watching the video of MacWorld 1997. At that time, Apple was very close to bankruptsy and came close to shutting down but then came in Microsoft which made a temporary deal which saved Apple.

Basically, the deal was the following:

1) Apple is to make Internet Explorer the default web browser.
2) Install Java on Macintosh with the help of Microsoft.
3) Microsoft will make Office for Mac (which we continue to see today).
4) Microsoft is to invest $ 150 Million on Apple.
5) Patent Cross License from Microsoft.

After watching this, it somehow made me realize, shouldnt Apple be kissing Microsoft butts today since Microsoft is the reason Apple is alive today, rather than making ads bashing their products (Vista) on TV or holding conferences bashing the company? Or Am I missing something here that I dont know?

I recently switched to Mac and have been loving it and to be honest, those ads and conferences were the reason I switched. But after watching this video, it somehow made me feel less pride as an Apple user

Here is the video for those of you who want to watch it. Its interesting, the crowd gave a big BOO when Steve Jobs made the announcement then Bill Gates makes an appearance later on.

http://youtube.com/watch?v=WxOp5mBY9IY

Opinions?

eric · Apr 14, 2007

do you think microsoft did that out of the kindness of their own hearts? i think it was a calculated investment - more exposure and licenses. i'd call it a wash at this point.

baggss · Apr 14, 2007

This has been debated back and forth in forums all over the web. In the end the fact is that MS got as much as they gave and gained an important bit of defense in the the ongoing US DOJ anti-trust investigation. Apple got some breathing space and room to maneuver. Both benefitted from the cross patent action and MS actually was able to get free of some embarrassing pending legal action from Apple that they didn't need at the time.

The $150 Million investment was in non-voting stock, which MS has long since liquidated (at a tidy profit thanks to Apples Stock performance).

trpnmonkey41 · Apr 14, 2007

Apple wasn't as financially secure as they are now but they were not on the verge of bankruptcy. The investment Microsoft made was part of a settlement in a lawsuit apple had against microsoft

PowerBookG4 · Apr 14, 2007

netlover said:
I just finishing watching the video of MacWorld 1997. At that time, Apple was very close to bankruptsy and came close to shutting down but then came in Microsoft which made a temporary deal which saved Apple.

Basically, the deal was the following:

1) Apple is to make Internet Explorer the default web browser.
2) Install Java on Macintosh with the help of Microsoft.
3) Microsoft will make Office for Mac (which we continue to see today).
4) Microsoft is to invest $ 150 Million on Apple.
5) Patent Cross License from Microsoft.

After watching this, it somehow made me realize, shouldnt Apple be kissing Microsoft butts today since Microsoft is the reason Apple is alive today, rather than making ads bashing their products (Vista) on TV or holding conferences bashing the company? Or Am I missing something here that I dont know?

I recently switched to Mac and have been loving it and to be honest, those ads and conferences were the reason I switched. But after watching this video, it somehow made me feel less pride as an Apple user

Here is the video for those of you who want to watch it. Its interesting, the crowd gave a big BOO when Steve Jobs made the announcement then Bill Gates makes an appearance later on.

http://youtube.com/watch?v=WxOp5mBY9IY

Opinions?

in a conversation with somebody who was paying attention back then, i learned that microsoft did not have a choice. If apple died, they would have had a monopoly they saved apple so they could continue business themselves while at the same time exposing the mac users to microsoft products.

somebody correct me if i am wrong.

baggss · Apr 14, 2007

While that is not explicitly evident, or even really true, it may have simply been an added side bonus. By working WITH Apple, MS was able to use that as defense in the DOJ investigation.

And I was someone who was paying attention back then.

netlover · Apr 14, 2007

Interesting. So whats with all this lawsuit. What did Apple sue Microsoft for?

trpnmonkey41 · Apr 14, 2007

http://en.wikipedia.org/wiki/Apple_Computer,_Inc._v._Microsoft_Corp.

MacHeadCase · Apr 14, 2007

baggss said:
While that is not explicitly evident, or even really true, it may have simply been an added side bonus. By working WITH Apple, MS was able to use that as defense in the DOJ investigation.

And I was someone who was paying attention back then.

So was I. That's one of the reasons why M$ got off with a light slap on the wrist.

Amen-Moses · Apr 14, 2007

netlover said:
Interesting. So whats with all this lawsuit. What did Apple sue Microsoft for?

Basically for stealing the entire look-and-feel of the GUI.

It wasn't just Apple and MS; IBM, SUN, Lotus and Olivetti were all counter suing each other over look-and-feel issues. At around the same time the browser wars had devolved into legal rangles as well.

Amen-Moses

fleurya · Apr 14, 2007

Amen-Moses said:
Basically for stealing the entire look-and-feel of the GUI.

It wasn't just Apple and MS; IBM, SUN, Lotus and Olivetti were all counter suing each other over look-and-feel issues. At around the same time the browser wars had devolved into legal rangles as well.

Amen-Moses

Poor Xerox, they could own the world right now . . .

I think if anything it's a wash. Microsoft made money on the deal and will continue to make money from Apple in software development, where the big money is.

The thing that gets me is what Jobs said about not competing with and comparing with Microsoft anymore, and then seeing the way they're blatantly attacking Microsoft on all fronts. Of course you can't be in competition with another product and not try to show the superiority, so I knew what he said wouldn't be completely true, but it just seems a little over the top to me.

Village Idiot · Apr 14, 2007

Man, those people in the video are so ungrateful. Is that just the normal public in there or are they idustry insiders? If they're "professionals" they sure weren't acting like it. You would think they would be happy that some one with some pull was willing to help save the company that they obviously obsess over so much.

But "Microsoft is the devil", so I can understand.... where's the roll eyes smily.

scooter · Apr 14, 2007

did i misread the wikipedia entry on this?

the lawsuit was decided in MS favor, not apple's. (someone correct me if i am reading this wrong) so how could this have been a slap on the wrist for MS? the judge decided the broadness of a "look and feel" lawsuit was unsupportable and the supreme court would not hear the case on appeal. in fact, most of what apple was sueing about was already licensed to MS. and let's not forget that Xerox also tried to sue Apple over the same thing!

in fact, it looks to me that MS got the far better end of this deal, with apple being forced to use it's IE as default browser, MS still developing Office for 5 years (how much did that make them?) and only paying a meager $150 million (what was MS profits those years?).

Redmond, Washington — July 17, 1997 — Microsoft Corporation today announced revenues of $11.36 billion for the fiscal year ended June 30, 1997, a 31% increase over the $8.67 billion reported last year. Net income totaled $3.45 billion, and earnings per share were $2.63, representing a 54% increase compared to $1.71 in fiscal 1996.
Revenues for the quarter ended June 30, 1997 were $3.18 billion, a 41% increase over the comparable quarter in fiscal 1996. For the quarter, net income was $1.06 billion, and earnings per share were $0.80, an increase of 86% compared to the $0.43 earned during the same quarter last year.

D3v1L80Y · Apr 14, 2007

scooter said:
in fact, it looks to me that MS got the far better end of this deal

Exactly. Which, in my opinion, is one of the larger reason as to why Apple is so "tight-lipped" when it comes to product releases and development. This is why Apple has a litany of NDA's that developers must sign and ahdere to. This is why Apple may seem so 'secretive' to those new to the game... they would rather not have history repeat itself. :black:

baggss · Apr 14, 2007

Only the $150 Million was published. The full terms of all the patent settlement, including cash payments, was never disclosed at the request of both parties. Because of that, it is hard to determine who really came out ahead. Speculation has always been that MS was willing to pay to make some these problems go away, but nothing has been proved. If one thinks about it, MS got $150 Million in NON-VOTING shares of Apple stock. IOW, they did not gain any control in the company. If this really was a bail out on MSs terms, they should have gotten full stock with all the privileges and gained some control. Also note that today, 11 years after this event, MS is STILL making office for the Mac. You don't throw away a cash cow because you don't like the farmer.

MacHeadCase · Apr 14, 2007

scooter said:
did i misread the wikipedia entry on this?

the lawsuit was decided in MS favor, not apple's. (someone correct me if i am reading this wrong) so how could this have been a slap on the wrist for MS? the judge decided the broadness of a "look and feel" lawsuit was unsupportable and the supreme court would not hear the case on appeal. in fact, most of what apple was sueing about was already licensed to MS. and let's not forget that Xerox also tried to sue Apple over the same thing!

in fact, it looks to me that MS got the far better end of this deal, with apple being forced to use it's IE as default browser, MS still developing Office for 5 years (how much did that make them?) and only paying a meager $150 million (what was MS profits those years?).

The lawsuit I was referring to was the DOJ against M$ for unfair business practices in the late 90s, not the one Apple vs M$. Apple and Netscape were both indirectly involved in that DOJ case as well since it was discovered in the documents received by the court that M$ had deliberately put code in Windows 95 to make Netscape's web browser and Apple's QuickTime crash or lock the computer in order to push users in using their own IE web browser and Windows Media player and encoding.

As far as winning against Apple in the other lawsuit, dummy John Sculley, then Apple CEO, hadn't applied for a patent on the Mac OS GUI back then.

Microsoft threatened to discontinue Microsoft Office for the Macintosh if Apple did not license parts of the Macintosh graphical user interface to use in the Windows operating system. Under pressure, Sculley agreed, a decision which later affected the Apple v. Microsoft lawsuit. Also while at Apple, Sculley coined the term personal digital assistant (PDA) referring to the Apple Newton, one of the world's first PDAs. Sculley raised the initial price of the Macintosh to $2,495 from the originally planned $1,995, using the additional money for higher profit margins and expensive advertising campaigns.

dtravis7 · Apr 14, 2007

Good find MHC. I had not even thought of reading that Wikipedia entry on Sculley.

MBasile · Apr 14, 2007

microsoft already got in trouble for being a monopoly, right? or was it in danger of becoming a monopoly? Helping out Apple would have kept them from becoming a monopoly and getting in trouble. As for Apple's TV ads, business is business

PowerBookG4 · Apr 14, 2007

baggss said:
While that is not explicitly evident, or even really true, it may have simply been an added side bonus. By working WITH Apple, MS was able to use that as defense in the DOJ investigation.

And I was someone who was paying attention back then.

I did not mean you guys were not paying attention, i just meant that I was sub 1 years old if I was even born when this was going on.

baggss · Apr 14, 2007

This happened in 96-97, so your what 10? Your profile says 18.....

Apple owes Microsoft big time ?

netlover

eric

baggss

trpnmonkey41

PowerBookG4

baggss

netlover

trpnmonkey41

MacHeadCase

Guest

Amen-Moses

fleurya

Village Idiot

scooter

D3v1L80Y

baggss

MacHeadCase

Guest

dtravis7

MBasile

PowerBookG4

baggss

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