Re: What if...

[Rubywand <rubywand@swbell.net>]

"Greg J. Buchner" writes ...
> 
> On Tue, 29 Feb 2000, Rubywand wrote:
> 
> > (Which, by the way, helps to
> > explain Microsoft's 'generosity' in helping to bail out Apple a couple
> > years ago.)
> 
> Could you explain what MS did to bail out Apple a couple of years ago?
> From what I remember, MS bought $150 million of Apple Preferred Stock
> which is probably worth 7-8 times more these days and MS committed itself
> to putting out some decent products on the Mac again and making money off 
> of the Mac...explain how this bailed Apple out, especially considering
> at the time MS and Apple were involved in a lawsuit over MS using Apple's
> copyrights illegally.
>
> MS bailing out Apple..what a laugh...this got Apple to drop a lawsuit
> that could have netted Apple enough money to operate in the red for a
> couple of years.....
>
 ....


     As you will recall, in the months preceding the Microsoft deal, no one
was speculating about Apple's bright prospects for selling ever more Macs,
cashing in on a fat settlement of their lawsuit, and multiplying the value of
its stock. Industry analysts were discussing the firing of Apple's CEO, a
possible sellout of Apple to Sun, and assorted breakup/selloff alternatives.

     A few months before the Microsoft agreement, the talk was not about
making more Macs. It was about what to do with Apple's hardware production
facilities in a sellout arrangement.  Apple, you may remember, was (maybe)
going to survive as a software and "innovative products" developer.

     If your basic point is that Microsoft bought $150 million in Apple
stock, promised to offer better Mac support in its products, did a worldwide
happiness and cooperation promotion, ... for greedy self-serving reasons,
then, yes; that is a fairly reasonable conclusion.

     On the other hand, the explanation that Microsoft was looking for a good
stock buy and was desperate to settle Apple's lawsuit is one which does not
seem to make sense. If a good money deal was Microsoft's objective, why not
wait a few months? Both the stock and settlement would have been a lot
cheaper.


     My references to Microsoft's "generosity" relate to speculations about
the actual motivation for rescuing Apple. One explanation is that Microsoft
acted to preserve industry stability. Things were going very nicely in
Computerville. Having a dinosaur drop dead in the town square would have made
an awful mess.

     A pet variation of the above is the 'nothing to do but bring back the
II' scenario. Had Apple gotten to the stage of announcing a New Apple II,
Microsoft would have been looking at a no-win situation:

     If Apple's effort flops, the company craters-- i.e. you have your dead
dinosaur stinking up the place.

     If Apple's New Apple II is a hit, you have a dangerous anti-PC
(anti-Microsoft) virus loosed in Computerville.


     Did Microsoft bail out Apple? Yes. It was not just the $150 million
investment. What turned things around for Apple was the approving pat on the
nose from Microsoft. Heck, ~*~ G*A*T*E*S ~*~ even appeared with (to) Apple's
CEO for the Sweetness & Light announcement. The message was "Microsoft is not
going to let Apple collapse".

     So, Apple did not collapse or need to try anything 'risky', like
bringing back the Apple II. 



Rubywand