
Steve Jobs used patents to pressure Bill Gates into 1997 investment in Apple - zacharye
http://www.bgr.com/2012/03/02/steve-jobs-used-patents-to-pressure-bill-gates-into-1997-investment-in-apple/
======
tosseraccount
This is revisionism. Now that Apple's back on top, they can afford to re-write
history. Apple's patents were worthless. They invented nothing; everything
they claimed was prior art. The real story is Microsoft bailed Apple out.
Microsoft had several motivations, none of which was settling patent disputes.
They wanted to crush netscape. They wanted to demonstrate to the DOJ that they
weren't a monopoly. They wanted to counteract the growth of Linux. Apple was
more than willing help out.

~~~
infiniteburp
Why is this voted down? It's accurate.

~~~
Anechoic
I downvoted because the post was misleading (although admittedly the bgr.com
article is as well)

> _Apple's patents were worthless. They invented nothing; everything they
> claimed was prior art._

I posted the link to the San Francisco Canyon Company wiki article earlier.
Apple had won injuctions in the courts and there's no reason to believe that
there wasn't a big payday at the end of the line.
[http://findarticles.com/p/articles/mi_m0CGN/is_1999_Jan_26/a...](http://findarticles.com/p/articles/mi_m0CGN/is_1999_Jan_26/ai_53999515/)

> _The real story is Microsoft bailed Apple out._

In Politifact terms, "half true" - the money meant nothing (see the 10-K link
I posted below) but the gesture meant that investors felt better about Apple.
Let's not forget that Mac Office was one of the most profitable products for
MS back then and MS avoided potentially paying out a lot of money for patent
infringement. There was also the patent cross-license agreement (which I think
was renewed in the early 2000's and answers the question of why Apple didn't
go after MS for the same things it went after Android vendors for).

------
noblethrasher
>> "If we kept up our lawsuits, a few years from now we could win a billion-
dollar patent suit. You know it, and I know it. But Apple’s not going to
survive that long if we’re at war. I know that. So let’s figure out how to
settle this right away"

That quote and the title of the article are pretty, um, incongruent.

~~~
shareme
The context that is missing is there was a DOJ lawsuit against MS at the time.
MS needed someone propped up as slight competitor..hence the deal as otherwise
MS could have just waited until Apple ran out of money and their patent
problem would be solved.

The quote might be wishful thinking

~~~
cma
Apple's patents would have be auctioned in bankruptcy; perhaps to Sun, IBM,
Oracle, or Microsoft themselves. Might have gone for more than the Apple
investment.

------
DennisP
This blog post from the former CEO of Sun is perhaps relevant:

In 2003, after I unveiled a prototype Linux desktop called Project Looking
Glass, Steve called my office to let me know the graphical effects were
“stepping all over Apple’s IP.” If we moved forward to commercialize it, “I’ll
just sue you.”

My response was simple. “Steve, I was just watching your last presentation,
and Keynote looks identical to Concurrence – do you own that IP?” Concurrence
was a presentation product built by Lighthouse Design, a company I’d help to
found and which Sun acquired in 1996. Lighthouse built applications for
NeXTSTEP, the Unix based operating system whose core would become the
foundation for all Mac products after Apple acquired NeXT in 1996. Steve had
used Concurrence for years, and as Apple built their own presentation tool, it
was obvious where they’d found inspiration. “And last I checked, MacOS is now
built on Unix. I think Sun has a few OS patents, too.” Steve was silent.

And that was the last I heard on the topic.

[http://jonathanischwartz.wordpress.com/2010/03/09/good-
artis...](http://jonathanischwartz.wordpress.com/2010/03/09/good-artists-copy-
great-artists-steal/)

------
Steko
Honestly who upvotes a BGR linkbait article that recycles a Forbes article,
adds nothing new but does spend half it's length recounting the unrelated but
sensational Android quote from Steve.

Think before you click! Don't do drugs. Stay in school....

------
nrotstan
Probably one of the best investments MS ever made. Certainly better than Skype
and it's attempt at Yahoo.

~~~
jgw
I'd agree with that, but I imagine not for the reasons I presume you mean.

Microsoft's small investment ($150M) in Apple was really to prop them up just
enough to avoid Apple's bankruptcy. Apple may very well have died had they not
received that cash injection, and Microsoft, facing pressure from the DoJ
regarding their monopoly, could point to this barely-hanging-on company as
viable competition.

It is interesting to ponder, in that context, that Apple likely owes its
existence to that act.

~~~
YooLi
_"It is interesting to ponder, in that context, that Apple likely owes its
existence to that act."_

Except it doesn't.

~~~
jgw
<http://www.wired.com/thisdayintech/2009/08/dayintech_0806/>
[http://community.seattletimes.nwsource.com/archive/?date=199...](http://community.seattletimes.nwsource.com/archive/?date=19970806&slug=2553374)

"The unexpected revelation by Apple co-founder Steve Jobs in a keynote speech
at MacWorld prompted gasps of disbelief and loud boos from the audience of
thousands of Mac users and software developers."

Sounds like they still haven't subsided.

------
Anechoic
Relevant: <http://en.wikipedia.org/wiki/San_Francisco_Canyon_Company>

------
snowwrestler
Is this really news to anyone? I remember the announcement of the 1997
investment. The press statements and coverage at that time said that the
investment was one aspect of an agreement to settle all IP-related claims
between the two companies.

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

------
joshaidan
What was Microsoft's ROI on their $150 million investment?

~~~
bcrescimanno
I don't know that the full numbers are well known, but this Ars article
reveals some of the details:

[http://arstechnica.com/microsoft/news/2010/05/apples-
stock-r...](http://arstechnica.com/microsoft/news/2010/05/apples-stock-rise-
could-have-meant-5-billion-for-microsoft.ars)

FTA: All told, Microsoft spent a little over $151 million to acquire 18.2
million shares of Apple stock, for roughly $8.31 per share. Microsoft
confirmed that it sold all of its AAPL holdings some time ago, and likely did
so at a healthy profit—after all, AAPL has traded significantly higher than $8
for many years. But what if Microsoft had held on to that investment just a
little longer?

~~~
ajross
They would have made a little under 1.2 [ _edit: 9.7, typod math_ ] billion
dollars if they still held the investment today. Which would increase their
cash and short term investment reserves by about 2% [ _edit: 10%_ ].

Microsoft is printing money. Cash is not what they need or care about.

~~~
bcrescimanno
[Edit: math was corrected above] I'm not following your math, 18.2 million
shares of Apple today would be worth about $9.8 billion--for a $151 million
investment. I'm sure there are nuances that I don't fully grasp; but that's a
huge discrepancy.

FWIW, I didn't mean to imply that MS _should_ have held onto that investment;
I was only answering the question about the purely financial ROI.

------
GigabyteCoin
I have a problem with people placing 15 year old conversations inside of
quotes.

Have you ever played purple monkey dishwasher?

Try playing that with yourself, for 15+ years... I doubt hardly any of that
quote from Steve Jobs is a "quote".

------
boca
<http://www.youtube.com/watch?v=PEHNrqPkefI>

The crowd wasn't happy at all when Steve Jobs announced about the partnership
with Microsoft. I guess they would have looked back, especially in the last
few years when Apple has done so well, and thought that it was indeed a good
decision on Steve's part.

Edit: The talk about the partnership starts at around 26 mins into the video.

------
joshaidan
"All I need is a commitment that Microsoft will keep developing for the
Mac..."

I guess this led to Apple's development of iWork and Safari so that they would
not have to depend on Microsoft Office and Internet Explorer.

~~~
celoyd
Partly.

All through the 90s, Apple had ClarisWorks/AppleWorks,[0] which were basically
what iWork is now – including that few serious Office users would look twice
at them. (I liked them a lot, but I’m not in the Office demographic.)

And Apple was never heavily dependent on IE, because Navigator was always
around. Safari had more to do with both IE and Navigator being awful, and with
the long game of getting a light and fast browser ready for mobile and
embedded devices.[1]

0\.
[http://en.wikipedia.org/wiki/AppleWorks#AppleWorks.2FClarisW...](http://en.wikipedia.org/wiki/AppleWorks#AppleWorks.2FClarisWorks_.28Macintosh.2FWindows_versions.2C_1991.E2.80.932004.29)

1\. Recall that c. 2003, everything was pointing towards enormously bloated
browsers. Jobs was already thinking about iP[oa]ds, and clearly anything on
the Netscape codebase’s size trend line would be a dog. Firefox – Mozilla lite
– was also a response to this, though as far as I know not with smartphones in
mind.

