[usconservative]

Apple was on the ropes 1989 - 1992 or so. MS was kicking their butts and there was talk of bankruptcy. Here comes Rush with his audience of 20,000,000, extolling the excellence of Apple computers (long before the ipod or iPhone).

Microsoft actually saved Apple by making a $150,000,000 investment in them back in 1997. (Source Link) and I don't think Rush had much if anything to do with it.

[HamiltonJay]

The MS lifeline and the return of Steve Jobs saved Apple...

Rush had nothing to do with it...

As corny as I thought it was a the time... Jobs return and the subsequent IMac helped turn Apple Around.....

[Swordmaker]

Microsoft actually saved Apple by making a $150,000,000 investment in them back in 1997. (Source Link) and I don't think Rush had much if anything to do with it.

Sigh. No, Wired and John C. Abell’s article merely repeated the MYTH that Microsoft bailed Apple out of a near bankruptcy in 1997.

"In a remarkable feat of negotiating legerdemain, Apple co-founder Steve Jobs got needed cash — in return for non-voting shares — and an assurance that Microsoft would support Office for the Mac for five years. Apple agreed to drop a long-running lawsuit in which they alleged Microsoft copied the look and feel of the Mac OS for Windows and to make Internet Explorer the default browser on its computers — but not the only choice."

The actual facts are hinted at by Abell’s article, but glossed over. What actually occurred was that Microsoft settled a patent and copyright lawsuit that, had it gone to trial in the next few months, would have resulted in billions of dollars in awards to Apple and for which Apple had smoking gun evidence of the intellectual property theft . . . and the suit had nothing to do with the look and feel of Windows but everything to do with the outright theft of Apple’s QuickTime code that was found inside Microsoft’s Windows Media Player software, including an Apple software engineer’s Social Security Number, mother’s name, and other identifying markers imbedded as identifiers in the code.

This lawsuit was coming to a head right at the time the Clinton Justice Department was looking to break Microsoft up into several smaller companies due to just such anti-competitive practices as intellectual property theft leading to forced acquisitions of smaller competitors. Microsoft did not need the distraction of a high profile lawsuit with such an antitrust case being brought, so they agreed to settle with Steve Jobs and Apple.

I’ve read the three interlocking agreements on Nexus-Lexus which were unsealed after ten years which settled this lawsuit and they are quite explicitly beneficial to Apple at Microsoft’s expense. They set out what each companys’ obligations were to settle the disputes were:

• Apple, for the period of five years, Apple would license to Microsoft the in-suit intellectual property, I.e., the QuickTime code, both patents and copyrights, for use in Microsoft Windows and other MS products, for an undisclosed payment of annual future licensing fee. Forensic Accounts would later determine by examining the financial statements of both companies, that these licenses totaled approximately $2 billion over the five years of the term of the agreement benefiting Apple. Any renewal would require renegotiating after the end of the term.
• Microsoft, for the five years and beyond, to the end of the life of each patent and copyright, would license all of its intellectual property to Apple at zero cost to Apple to use as it saw fit. Advantage Apple.
• Apple agreed to include Microsoft Internet Explorer along with and Netscape Navigator as a pre-installed and optional, but not the default, Internet browser on all new Macintosh computers and in all copies of future updates of their operating system for a period of five years. Advantage Microsoft, sort of.
• Microsoft agreed to re-institute, for a period of five years, the sales and development of Microsoft Office for Macintosh (which Microsoft had first threatened to discontinue and then did discontinue as part of their trial strategy to get Apple to drop the suit). Advantage Apple.
• Apple agreed to drop all patent and copyright suits currently in court or being considered against Microsoft in exchange for the above considerations plus a one time payment of $150,000,000 for previous years’ infringements.
• Steve Jobs agreed to make that one-time payment more palatable for Microsoft by making the payment a purchase of five year restricted, non-voting (I.e., Microsoft would have no say in the management of Apple), preferred stock, which Microsoft would be required to retain ownership for the five-year term of the three interlocked agreements. Advantage Microsoft because they could and did sell the stock for a profit.
• The judge in the patent and copyright infringement case, when presented with the three agreements, dismissed the suits with prejudice and on the request of both parties, sealed the agreements for a ten year period.

When Abell’s and Wired’s so-called bail-out is claimed to have occurred (it’s obvious Abell did no research), Apple had experienced three profitable quarters in the black, had over $2 billion in cash and short term cash equivalents and no debt. In addition, Apple had just acquired NeXT and Steve Jobs for approximately $400 million. In other words, they were no longer any where near bankruptcy. Apple had already turned that corner due to Jobs’ efforts.

This has probably been the fiftieth time on FR I’ve had to debunk this myth pushed by Microsoft’s PR department. . . but the factual evidence does not support their tale. A company which bails-out another normally demands voting control by putting people on the rescued company’s board-of-directors and certainly does NOT bail it out by buying five-year restricted non-voting stock where they have ZERO control.