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CHAPTER TWENTY-FOUR
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/ c, F, }% P1 X: |THE RESTORATION . O) U$ s7 z/ P5 N% a) ?
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2 j8 f9 f% }2 l# ~, q8 b! zThe Loser Now Will Be Later to Win
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% ?* @0 ?% z4 `, `Amelio calling up Wozniak as Jobs hangs back, 1997
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8 Y* t: ^/ }2 }* r7 _( |. u+ RHovering Backstage
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0 }; J2 r, q0 j0 N“It’s rare that you see an artist in his thirties or forties able to really contribute something
7 U" L- W1 y) B7 h" Kamazing,” Jobs declared as he was about to turn thirty.2 ^, W- n* m, b
That held true for Jobs in his thirties, during the decade that began with his ouster from
X$ U: O+ T* |Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that
1 g8 U6 y3 c/ j9 v p3 b: M( T2 myear, and the following year Apple’s purchase of NeXT offered him reentry into the
& \; z& G: z/ N2 A* ^0 R [company he had founded. In returning to Apple, Jobs would show that even people over* R/ o. `( s; ~0 M& s( r8 p
forty could be great innovators. Having transformed personal computers in his twenties, he0 i7 m7 h- c7 D% H- ^3 r3 w
would now help to do the same for music players, the recording industry’s business model,
$ S: M+ S% {1 N6 [5 i, |5 t! hmobile phones, apps, tablet computers, books, and journalism./ x5 }9 L( t! g) V5 V1 ^$ ]
He had told Larry Ellison that his return strategy was to sell NeXT to Apple, get4 l! A1 S6 a. F5 B& L
appointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may
d/ ~7 S% J$ f9 _have been baffled when Jobs insisted that he was not motivated by money, but it was partly
: d4 B" k& `- ~+ e8 g( \true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic, r; ~6 Z, b6 j: p. {% }8 l
impulses nor the competitive urge to see how high on the Forbes list he could get. Instead+ V4 m$ C1 Z& ^0 Z* j9 W( K' z
his ego needs and personal drives led him to seek fulfillment by creating a legacy that# D$ U; B" s( Y
would awe people. A dual legacy, actually: building innovative products and building a. a2 T& I A' a' Q; O/ v/ |
lasting company. He wanted to be in the pantheon with, indeed a notch above, people like 8 F# D3 _' m4 x+ K: j
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! T% b! t) o' Q2 x( s# L% r6 v9 q8 UEdwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to; w0 ]7 n$ m6 |( c0 F2 \% h
return to Apple and reclaim his kingdom.
; y3 l- j: G+ c7 c2 }# bAnd yet when the cup of power neared his lips, he became strangely hesitant, reluctant,
2 N$ w+ L6 E7 {, Dperhaps coy.
& s, C. A7 f7 v' [* |He returned to Apple officially in January 1997 as a part-time advisor, as he had told
5 N( [* v' ?7 \( |Amelio he would. He began to assert himself in some personnel areas, especially in/ G, R+ f6 D2 j/ Z2 S) R
protecting his people who had made the transition from NeXT. But in most other ways he
& {) s. ~# z7 G+ |% nwas unusually passive. The decision not to ask him to join the board offended him, and he
# h/ F; V% m0 `: r" z4 [9 p. ~& j0 afelt demeaned by the suggestion that he run the company’s operating system division.. T) z- Y0 ^/ j h/ r
Amelio was thus able to create a situation in which Jobs was both inside the tent and
2 Z( u; x% ~8 o' L4 Aoutside the tent, which was not a prescription for tranquillity. Jobs later recalled:
$ G$ Z7 g) y! z! N1 g: pGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him8 M! o6 J; z, f) V/ R& `
the company. I thought I was just going to be trotted out now and then for events like
9 [2 Q' Z5 }8 r' c! gMacworld, mainly for show. That was fine, because I was working at Pixar. I rented an6 Z( {- j; S4 ?6 f! G
office in downtown Palo Alto where I could work a few days a week, and I drove up to5 r( l" |: f3 c
Pixar for one or two days. It was a nice life. I could slow down, spend time with my family.- x6 N, \9 _4 j/ e1 |! [
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Jobs was, in fact, trotted out for Macworld right at the beginning of January, and this) {+ {3 D/ A7 q; Y
reaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful
" T0 X2 {# J! r- y( h- m) c3 [9 qfought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote
& r2 C& _0 r! I! Z% K+ }address. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in
5 a0 e7 c1 Y/ U z9 O$ kThe Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple4 C1 |: w3 X# J& m, t a: O
event.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket
% q$ X* H, ^. A2 R2 s* s6 k( g" iand a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall \! W4 o9 j! H
Street Journal reporter Jim Carlton noted, or in the words of the technology writer Michael0 Q& P! R% S0 W) H4 n* s
Malone, “looking exactly like your newly divorced uncle on his first date.”
$ T# [% X4 {7 O7 T) B( D" mThe bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle" I/ R ~6 T' A. v% Z1 b; d/ [
with his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset
, C* K5 O4 }4 s0 l3 D8 sby the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed
/ N: H+ k/ K) ~0 Eand endless presentation. Amelio was unfamiliar with the talking points that popped up on, h \. z, t! K0 x: R
his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train; F4 v# r4 V- _
of thought. After more than an hour, the audience was aghast. There were a few welcome
; s! j$ l. w7 O5 n/ m0 o6 U6 kbreaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music
5 B, v, \" l& H. i$ j' c" }program. He also pointed out Muhammad Ali in the first row; the champ was supposed to
6 p% p) G D( J4 k; r. \come onstage to promote a website about Parkinson’s disease, but Amelio never invited. R- y( n' N0 v
him up or explained why he was there.3 h0 W9 Q1 k0 O" G+ L7 V9 J! q
Amelio rambled for more than two hours before he finally called onstage the person
) s' O' A: @& m2 [7 r/ H5 G5 Xeveryone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was, Q3 _# D; X9 M U+ G+ R3 k
the antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of
2 c; K! k5 Q- A6 qElvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave9 n" l' X& C# V
him a raucous ovation for more than a minute. The wilderness decade was over. Finally0 K5 L9 ~3 G4 J- \# L% z
Jobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark + ~: D) i+ |6 i- i% g9 F# @2 K0 a
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back,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we! E7 K$ S/ {4 o& y5 a; i
have to come up with an OS that’s even better.”
# p. _8 G* a, k% p8 T. bJobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.3 Y7 o& F1 U4 J: Q3 w
Unfortunately Amelio came back onstage and resumed his ramblings for another hour.
, U* m# [' C$ \4 F4 p& a$ JFinally, more than three hours after the show began, Amelio brought it to a close by calling9 o5 S( H3 l$ c u$ S& H
Jobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there/ o7 b! g; R* l5 q; b% Z: j. ~
was pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant& D% @ K. I7 S/ j. V* [1 T
trio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the5 g; F: c+ Z8 J$ \
closing moment I had planned,” Amelio later complained. “His own feelings were more
& A, Q4 E$ X& j8 h! u( F6 Limportant than good press for Apple.” It was only seven days into the new year for Apple,
8 N- h3 H# L9 K/ E8 wand already it was clear that the center would not hold.
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' b! W8 H- c$ SJobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure1 N3 J0 J5 e9 J# b- W2 L# t
the really good people who came in from NeXT didn’t get knifed in the back by the less1 x3 Y) t0 ?6 S% D
competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who
) f: L' L) R1 B3 Lhad favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially
- W Y2 E( h. wwhen she continued to want to use the kernel of Solaris in the new Apple operating system.
5 b- ]$ t; ?. XIn response to a reporter’s question about the role Jobs would play in making that decision,
! o [3 n# I9 s g9 fshe answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two5 M% P7 p. N2 Y
of his friends from NeXT took over her duties." Z, `1 A' z f; Z* S
To head software engineering, he tapped his buddy Avie Tevanian. To run the hardware6 M! R0 V3 d1 l' z3 O& a
side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a
7 Y! D% r! r: e: a' n8 u7 s/ Shardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.
7 {. ]" g$ }+ P4 H+ Z“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got% R3 H) {. u! ~3 V, }7 y
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he5 g. v3 H% V& Y* h, Y/ k
expected. He and Tevanian would exchange glances at meetings as if they had stumbled
2 Q6 }$ r: n5 n! a6 [! o# Dinto an insane asylum, with people making deluded assertions while Amelio sat at the end9 D' s9 j( g' y; K# C
of the table in a seeming stupor.
4 @8 x# k7 @! }- i; i! HJobs did not come into the office regularly, but he was on the phone to Amelio often.5 W/ h! U7 u2 u- t* @; H( {
Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted3 W. _. |/ M+ D+ i3 t4 p
were given top positions, he turned his focus onto the sprawling product line. One of his0 k8 v& E3 F l1 F: f' a1 Q4 A! e; z
pet peeves was Newton, the handheld personal digital assistant that boasted handwriting
* M/ g2 M& P# A8 J5 ?recognition capability. It was not quite as bad as the jokes and Doonesbury comic strip# Q% O. U( @! M6 K' R) Q
made it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing/ l5 _1 g& D3 |0 a+ |$ ]. i
on a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent9 T$ ?6 ~: j' z
another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet
; _. ?6 x1 x/ K% U/ |project. That alone doomed it in Jobs’s eyes.
/ y& T6 M6 u, J# [6 g [9 }“You ought to kill Newton,” he told Amelio one day by phone.
. w8 L" K L/ lIt was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill' ]" x. K" Q# _1 `
it?” he said. “Steve, do you have any idea how expensive that would be?”) @: ~" A4 V2 h2 I
“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.; K1 a5 q8 U! g/ x$ H2 x
People will cheer you if you got rid of it.” & W1 X! U0 T4 j# h$ U6 w& G. ~5 p
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5 |" m0 J) g6 k+ r# k6 x“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t
. ~. }, L1 N7 n" r; F# O5 S: \4 G/ qsupport getting rid of it.” By May, however, he announced plans to spin off the Newton5 O. {8 r1 M+ B1 I2 o, y! _
division, the beginning of its yearlong stutter-step march to the grave.; }4 f% W* u0 S
Tevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon) ^) U$ U/ x4 B* |1 ]' q3 g& K
much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not
$ }& R, x0 ^9 M3 {+ D* j' oso much a Machiavellian power play as it was Jobs being Jobs. Wanting control was
( N4 C6 g% L n2 c" ?% u/ hingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this7 P+ j8 p' T, z) P d: `
when she questioned Jobs and Amelio at the December announcement, was the first with
; R3 a( w1 [* @the story. “Mr. Jobs has become the power behind the throne,” she reported at the end of
6 `$ t% h0 F: pFebruary. “He is said to be directing decisions on which parts of Apple’s operations should
, v/ I" h! C& Y% m/ o9 ?9 B* X5 F$ Ybe cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,
' M' d9 C: E0 qhinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’' X7 Y/ ~. j# L9 L$ j: ~: Y
confidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in: |4 d1 C, M) M& i
reviving Apple, and he is intent upon replacing them to ensure the survival of ‘his1 D, d5 l1 V/ X7 N7 f: \0 H
company.’”
* J9 L$ Z7 N& \7 M% N6 PThat month Amelio had to face the annual stockholders meeting and explain why the& t8 F( q! Z7 s, T8 L
results for the final quarter of 1996 showed a 30% plummet in sales from the year before./ D+ g6 f1 P* ^- w
Shareholders lined up at the microphones to vent their anger. Amelio was clueless about
3 \6 |4 }% R& Phow poorly he handled the meeting. “The presentation was regarded as one of the best I
+ O" n. _7 @0 z8 k1 L+ hhad ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
, a9 L6 S: f* B4 H) ?the chair of the Apple board (Markkula had been demoted to vice chair), was appalled.
/ L2 f/ W! Y* _) n“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed." \! A7 i! q# U$ s- H& Y9 z k
“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t% M( g7 p+ {9 B, P
answer the questions, didn’t know what he was talking about, and didn’t inspire any/ o% c9 C8 G- P) ~: L) m3 _- a% A
confidence.”, a" U2 [( K" t3 j
Woolard picked up the phone and called Jobs, whom he’d never met. The pretext was to
C5 q9 X% T4 h1 k$ ^invite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard I3 c$ P) g) H6 _
recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone
' ?7 K6 ?8 T+ n1 tcall in that direction and asked Jobs point-blank what his impression of Amelio was.* G: J7 k: Z2 t- w
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the
4 H4 a7 M5 }; G% cright job. Jobs recalled being more blunt:( L* [3 r9 C; J; y) L. F
I thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.
" b: \4 M) W' R6 i, NHe’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell1 K! U( K+ L0 \
him, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the# N* g1 ?% ?7 K5 A
people I brought into Apple. All of this took place in my head in less than thirty seconds. I
* x& N7 O* q; y; Z2 wfinally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him
/ T( K$ s6 ?7 ohave it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be
/ [1 k% S) U$ h& m3 a' j! ~a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a
+ p/ x% o7 e* b; h- yreally stupid thing. 9 b5 a/ j# d/ L* j7 l! R
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, p: }+ x1 |. M PThat spring Larry Ellison saw Amelio at a party and introduced him to the technology
3 t6 ?+ L( R! g0 q9 t' H% }journalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a
" H9 @2 q; w) K& {( b$ [ship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.
3 y, n+ b! z# Q: `1 E, tAnd my job is to get everyone to row in the same direction.” Smith looked perplexed and, l6 Z) x V% G& _
asked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the
% U9 i0 Z7 l% ~) H4 O6 gparable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I
8 H9 Q5 \) P" l5 u! z% Z- bliterally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took! q. D e# N$ j/ t R
himself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a3 C* F4 ^9 G C# C) F* } @& U
warning sign.”0 m9 o8 c# ^6 M" q, a
Brent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was
8 d) w6 H0 e( u1 }& q9 f/ ?familiar with his thinking, and in March he came out with a story detailing the mess.
9 T0 z; s2 j: M T“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled- L( \% g# X" p) p% i! ]
techno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with
% a! Q* \; A1 m) {+ l4 nimploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he
: w* e6 s/ e: ]! T2 dwrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately
# T0 T T, X; k* Bhe has been overseeing Pixar, maker of Toy Story and other computer-animated films—
1 t4 w; z) F( umight be scheming to take over Apple.”
" b; I, Q& ^. qOnce again Ellison publicly floated the idea of doing a hostile takeover and installing his# c; S! S$ i( s
“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.5 D0 x# n$ u7 e% j
“I’m ready to help him the minute he says the word.” Like the third time the boy cried
: F5 {% Y/ P3 r$ t5 Q; J( G* iwolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told7 Q' B1 T2 T9 \. i
Dan Gillmore of the San Jose Mercury News that he was forming an investor group to raise t( _, G* ^0 S3 A9 ~. S
$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3
3 \* q5 |: W8 ?" P! w1 c2 ]billion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to
% A$ M* H. e* c$ z- I. tthe frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general& o6 `2 f5 p! j0 G, u
public to vote on whether he should go ahead with it.; e! _ \0 ?3 w9 ^
Jobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now. ^) m8 p1 ]# S/ |% @7 S
and then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,2 x# m. [' K6 Q% ^
however, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.& h2 b5 K& M2 z) `: v. j8 F9 I
So Amelio called Jobs, whose response was equivocal but also partly genuine. “I really2 W9 N/ }; e. E! q3 k
don’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he
. v+ ~" C5 k4 vadded a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs3 t$ |% ~3 G; R
could have ended the speculation by releasing a statement rejecting Ellison’s idea, but, K7 y0 b" C: p& [
much to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests# h0 P. S& O: i% p1 y, h% Y/ c, S
and his nature.
( ?8 e6 @( V6 }( r5 T, e" iBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple7 z0 o$ l3 r. \
Mincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and
: j, l" Z8 Z/ J2 i& iWired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of
8 ^" ~8 F8 L8 T& b$ a# athorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of
3 t% T$ {8 J# Y5 g, PApple mismanagement, wrote, “How can these nitwits still draw a paycheck when they1 l3 d. V# n9 g/ I! O ]8 V3 b5 D
took the only computer that didn’t frighten people and turned it into the technological& D5 J" m1 x; N% y7 M7 [1 s
equivalent of the 1997 Red Sox bullpen?”
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When Jobs and Amelio had signed the contract in February, Jobs began hopping around# \8 A, a+ M' \6 R/ |* l- ~; ?
exuberantly and declared, “You and I need to go out and have a great bottle of wine to3 ^) V1 }% c) ]; r6 ^
celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their
+ X- J8 v3 ]* N9 Y d+ T. w% {$ K& j9 swives. It took until June before they settled on a date, and despite the rising tensions they* g& j2 u) t& D, D
were able to have a good time. The food and wine were as mismatched as the diners;
# Y: E- Q. ~7 ~- u" {Amelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;
3 W! X- K/ |! }# @: YJobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72." m) ]- |1 a$ `* G/ E
Amelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”
; P! y% w+ O- z1 g# U' d5 C2 z6 j; pJobs could seduce and charm people at will, and he liked to do so. People such as Amelio+ i Q3 W5 L% S& Y
and Sculley allowed themselves to believe that because Jobs was charming them, it meant
6 F5 d& T8 G1 g" tthat he liked and respected them. It was an impression that he sometimes fostered by
! K: g9 q d E: t9 h" A2 Gdishing out insincere flattery to those hungry for it. But Jobs could be charming to people! f5 @$ M! w- w0 N9 d' `# H- e
he hated just as easily as he could be insulting to people he liked. Amelio didn’t see this
9 m0 q3 Y8 t6 Q9 G0 ibecause, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to5 S4 Y L' c1 r* _: x
describe his yearning for a good relationship with Jobs are almost the same as those used
9 r( Y4 Q1 n4 @8 d7 Pby Sculley. “When I was wrestling with a problem, I would walk through the issue with; n- _6 D6 |0 B3 Z$ O! L5 ^( \! m
him,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed
" K3 N$ L4 ^2 C0 ^; c% T/ Rhimself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind: j' B7 c4 y" E3 B
approached problems, and had the feeling we were building a mutually trusting
7 c5 i' T+ j% a! i drelationship.”2 o6 d: f$ s2 Q4 v I4 P6 U
Amelio’s disillusionment came a few days after their dinner. During their negotiations," l. c+ ?7 y! K4 ]: } e0 V+ k
he had insisted that Jobs hold the Apple stock he got for at least six months, and preferably2 v+ c* i$ ~ E" }5 Y
longer. That six months ended in June. When a block of 1.5 million shares was sold,! L0 k1 P# O. v
Amelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.
5 H2 S9 t( b, [$ y“Remember, you and I had an understanding that you wouldn’t sell any without advising us1 [0 d* x/ W& |$ J8 t% H
first.”
. \7 G, s/ x6 l. c. _4 {“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his) q+ D! E; f7 Z) I1 v3 P
shares, and he issued a statement saying so. But when the next SEC filing came out, it8 H% l7 k' E2 X- y$ O4 K
revealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank( v3 N2 ]- T- Y% q
about these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of0 J: t8 n8 ?$ s; I
depression” about where Apple was going and he didn’t want to admit it because he was “a9 u, d8 R4 [- ]: w# ?/ K) q
little embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I
) g. G0 V/ } d4 Dneeded to tell Gil.”
! \' P6 o9 l/ Q' D+ |* lWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs X, c* J o2 n& e( \+ ^% N
sometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies& d2 R+ r+ L' `$ i" K
not because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to
! W9 |8 ]( X8 i, \mislead or be secretive when he felt it was warranted. But he also indulged in being
# f) ?+ K( Q- Fbrutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the$ U3 V) ~: E. D4 i M7 i
dissembling and the truth-telling were simply different aspects of his Nietzschean attitude
# v: `, F9 g! B5 J9 ~that ordinary rules didn’t apply to him.
/ I9 w* p' V, p) a8 d2 Q9 x
& a6 {/ z: p& eExit, Pursued by a Bear $ y( k6 }5 i+ c3 V q# R5 g `* b
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' k4 t2 j# Q+ Z1 W% H+ b. NJobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares
% I: y$ y1 j, ~, u! N) I( }and been misleading about it. So Amelio finally became convinced that Jobs was gunning7 _! D: d3 A" n: d$ v
for him. “I finally absorbed the fact that I had been too willing and too eager to believe he9 y3 f) |4 U; m2 m' K' w4 n! Q
was on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were J* Q. \; U9 n
charging forward.”
% @- P& v' Q, E/ P! h. wJobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.
: N3 q6 g4 g) a0 s% K4 T, BBut there was a more important factor in turning the board against Amelio. Fred Anderson,6 T+ v2 i4 g' \& c* A2 G
the chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board
8 i8 P8 F6 a6 O1 K1 X finformed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,- E! _' o4 n' y
people were leaving, and more key players were thinking of it,” said Woolard. “He made it' z: m- w9 S& L" F9 |; I4 p$ Y
clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That$ {* i& E! g. I& M) S
added to the worries Woolard already had from watching Amelio bumble the shareholders
4 C* {1 `' C$ _meeting.4 K' X( `" O; [% z. x( S8 K
At an executive session of the board in June, with Amelio out of the room, Woolard
9 K8 h' o/ z2 _: f; xdescribed to current directors how he calculated their odds. “If we stay with Gil as CEO, I, n+ w2 V- z6 B: K, Y
think there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and
' x. y# K5 c- Dconvince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t/ i2 u3 Q7 [7 |+ }! a
get Steve back, and have to search for a new CEO, then we have a 40% chance of
+ A1 W! U* V2 U9 Dsurviving.” The board gave him authority to ask Jobs to return.
& Y2 P w: e% L" eWoolard and his wife flew to London, where they were planning to watch the+ F' q5 Y" x* n8 p
Wimbledon tennis matches. He saw some of the tennis during the day, but spent his
! ]* \# H; Z3 u2 J/ {evenings in his suite at the Inn on the Park calling people back in America, where it was6 W! O/ [7 b' f4 t$ t. a, R& U; K
daytime. By the end of his stay, his telephone bill was $2,000.4 ~- n9 i* l/ f. v0 k- J
First, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to
8 o- \: \+ J! `* X ycome back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own7 y, I5 L, a# W9 ?( D
ideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I' x$ J% b/ d# `2 K3 Y2 P( K
will help,” he replied.& Q3 \2 I i& {) m; K7 f
“As CEO?” Woolard asked.
# E# m! Q. ]$ f2 rJobs said no. Woolard pushed hard for him to become at least the acting CEO. Again% Q- y( y2 L9 }/ K
Jobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board" ^; o* o6 G( N1 F
member—that was something he had yearned for—but declined to be the board chairman.
! J! k+ ^3 u+ f; O# E- B* b% Z& [“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to
. F* W9 c5 X! ?Pixar employees assuring them that he was not abandoning them. “I got a call from Apple’s* x4 y) X( y. U' G3 E4 j1 b8 v
board of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I; i% n& b& ^% p
declined. They then asked me to become chairman, and I again declined. So don’t worry—3 k- _9 w( k' h0 v- \3 d
the crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”* c; k% r' |; l" x: F% Z- A+ Y
Why did Jobs not seize the reins? Why was he reluctant to grab the job that for two. g" V/ |: ?0 C; q
decades he had seemed to desire? When I asked him, he said:
0 I# V! a5 d' t1 jWe’d just taken Pixar public, and I was happy being CEO there. I never knew of; W @2 H" |. D2 U- j
anyone who served as CEO of two public companies, even temporarily, and I wasn’t even
+ D! E% U9 F- n4 M' Osure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time4 b, V. I b0 O1 h( K
with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up
7 p2 B5 [4 A" ?6 G2 V( _7 zthis nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to
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people I respected. I finally called Andy Grove at about eight one Saturday morning—too
2 K- L3 v1 `/ p3 w. n( V2 uearly. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I9 A3 V4 F& Y4 t: ~
don’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit& t- x8 X3 e3 e2 V; U
about Apple—I started it and it is a good thing to have in the world. That was when I
- I. \1 ]; A2 I G, Qdecided to go back on a temporary basis to help them hire a CEO. m4 E+ v6 b9 X8 g: Z* x0 Q5 D) L1 x
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: E7 D3 j9 y" WThe claim that he was enjoying spending more time with his family was not convincing. He
" V1 z) U6 V) ?/ dwas never destined to win a Father of the Year trophy, even when he had spare time on his6 M/ a% W2 g; f: e/ S' ^/ ?
hands. He was getting better at paying heed to his children, especially Reed, but his& b3 h O& p k4 N7 t1 z) r4 h
primary focus was on his work. He was frequently aloof from his two younger daughters,
6 y& \( C3 ?6 |) i8 ~, y2 ~7 h6 Nestranged again from Lisa, and often prickly as a husband., ^) h5 J/ y. E( U# h
So what was the real reason for his hesitancy in taking over at Apple? For all of his6 H* d3 k( R1 K, z6 B, K) D
willfulness and insatiable desire to control things, Jobs was indecisive and reticent when he
9 w& d0 T* n% \) A8 ~felt unsure about something. He craved perfection, and he was not always good at figuring4 A. ^' |9 i& P- ]' E8 c" Y
out how to settle for something less. He did not like to wrestle with complexity or make
6 x, v' d$ F8 c2 O1 D maccommodations. This was true in products, design, and furnishings for the house. It was/ P) V1 Q% A( G5 R3 c
also true when it came to personal commitments. If he knew for sure a course of action was
- p: m" C' a& u% Eright, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to
1 B( D" L- Y$ O) Athink about things that did not perfectly suit him. As happened when Amelio had asked him/ e: W; V& a2 r- c
what role he wanted to play, Jobs would go silent and ignore situations that made him
7 F6 @8 k6 x7 k% U5 Ouncomfortable.
- R. b0 d4 q. W H$ E$ z" d4 n: s ?This attitude arose partly out of his tendency to see the world in binary terms. A person
. d9 v% A( j, o) e" }9 f. o) mwas either a hero or a bozo, a product was either amazing or shit. But he could be stymied0 O# q' i) n+ w# x
by things that were more complex, shaded, or nuanced: getting married, buying the right6 f0 G* p# S4 v/ a/ U
sofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I
* {* }2 ]. v/ B5 y- ]- Z+ [5 \think Steve wanted to assess whether Apple could be saved,” Fred Anderson said.) b: b% n7 h* U* }( D
Woolard and the board decided to go ahead and fire Amelio, even though Jobs was not$ R" X4 [1 H5 g8 i; N
yet forthcoming about how active a role he would play as an advisor. Amelio was about to
) O7 r% \& D: z8 {go on a picnic with his wife, children, and grandchildren when the call came from Woolard4 j- Q5 f+ {% M6 o5 s! \
in London. “We need you to step down,” Woolard said simply. Amelio replied that it was
0 Y, M; g7 {: t4 g. knot a good time to discuss this, but Woolard felt he had to persist. “We are going to8 S _: J7 Z5 S. R
announce that we’re replacing you.”" f7 T/ T0 l" v2 L$ k
Amelio resisted. “Remember, Ed, I told the board it was going to take three years to get
3 M! Q0 ]6 s$ W5 w3 Bthis company back on its feet again,” he said. “I’m not even halfway through.”7 h5 |2 [! B9 k/ y$ ^$ ~+ u: A* P
“The board is at the place where we don’t want to discuss it further,” Woolard replied.
3 K% U# u: K2 q+ y0 E5 x* PAmelio asked who knew about the decision, and Woolard told him the truth: the rest of the
! B9 ~4 H/ |: q* xboard plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His# w6 u; B% L6 g
view is that you’re a really nice guy, but you don’t know much about the computer
/ {7 X, ?6 `8 k+ P) {industry.”
9 B$ w, Z5 L7 R: `$ v“Why in the world would you involve Steve in a decision like this?” Amelio replied,
# ]& u2 M0 W1 w% R6 ygetting angry. “Steve is not even a member of the board of directors, so what the hell is he
0 V* |8 N4 [9 ? J+ E8 Z$ q- {# `2 V9 f) |4 K0 X
5 q( K/ o4 O/ Z$ U3 R( y& S
" n6 o$ d4 E, s/ Z% l- {% g2 m& T1 r2 R8 Z3 [
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+ h) z2 E0 r; ^8 U, L
4 S3 R! |- b A* h2 ydoing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to
6 }1 Z% M" ?. L3 F. l Scarry on with the family picnic before telling his wife.+ Z4 W m) h+ @+ \! j* n
At times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t1 ]. f3 y) ` A0 A7 [, l9 ~
care one iota what people thought of him; he could cut people off and never care to speak
0 ^% }* A" _) fto them again. Yet sometimes he also felt a compulsion to explain himself. So that evening
4 A* e2 d2 ?, a6 \5 D: mAmelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to. Z* ], ]6 R1 p7 c
know, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want
5 _5 z- l1 \: m2 @8 N: F; u8 jyou to know that I had absolutely nothing to do with this turn of events, it was a decision. e( O: o; {, |) j5 m
the board made, but they had asked me for advice and counsel.” He told Amelio he
3 L8 m, r' X( s2 u' i- wrespected him for having “the highest integrity of anyone I’ve ever met,” and went on to
8 d0 j U; C: X) ogive some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown7 D9 E# E) ^ g2 F4 p
out of Apple, I immediately went back to work, and I regretted it.” He offered to be a
: e9 C+ R" r; W; V" }sounding board if Amelio ever wanted more advice.& |3 ~/ y+ g+ F# {, H
Amelio was stunned but managed to mumble a few words of thanks. He turned to his
2 E5 o$ B8 Z8 e! A$ k5 @wife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”
* V% r7 _& {8 O: T6 fhe told her.
3 ~9 F% e$ N+ I( z& r6 b. L1 m( z“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”
! \" x9 \5 T! ^" d“Join the crowd,” her husband replied.7 Y- N8 N2 H& |" x
Steve Wozniak, who was himself now an informal advisor to the company, was thrilled+ f9 ]7 P1 ^* H A9 B( l
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,
$ y) X. l) Z! [5 k, u“because whatever you think of Steve, he knows how to get the magic back.” Nor did7 _4 \( f k; ?/ ?, g
Jobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil) {" D1 N* J! v2 g6 r
Amelio meets Steve Jobs, game over.”
. f- G/ J4 `. } f9 ?* UThat Monday Apple’s top employees were summoned to the auditorium. Amelio came in
! R) O3 W* K9 Y3 g, n5 llooking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he% J6 @0 |+ l/ H3 r8 o
said. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear P4 Q. O. {5 x. C' f
that he would be taking his cues from Jobs. Then, exactly twelve years since he had lost K6 d; } N9 M0 u, T
power in a July 4 weekend struggle, Jobs walked back onstage at Apple.
6 y1 x! G4 Q4 K$ X& uIt immediately became clear that, whether or not he wanted to admit it publicly (or even
4 F U4 N* ?& l& ]) P& Eto himself), Jobs was going to take control and not be a mere advisor. As soon as he came
: G. v5 \: {9 x7 q& A Ponstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work+ l& g1 q# l+ i
reinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he
7 m& Q6 Y7 f% S$ d$ _8 T: ?8 Ysaid. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.8 ^5 w$ l8 \8 d# n* u
“So what’s wrong with the products?” Again there were a few attempts at an answer, until
( _! u' O( H; I/ z+ @. Y$ u1 B6 |Jobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s0 q# `7 Y" B+ x% _) E
no sex in them anymore!”
& X4 a& G( f& `; c- b8 EWoolard was able to coax Jobs to agree that his role as an advisor would be a very active# D( a% P' [7 H5 H& e
one. Jobs approved a statement saying that he had “agreed to step up my involvement with
9 V5 i$ u% f" ?" C- y+ sApple for up to 90 days, helping them until they hire a new CEO.” The clever formulation) Q+ J5 `3 i2 A& h1 `- X2 O% d
that Woolard used in his statement was that Jobs was coming back “as an advisor leading: a4 z# h% H: v3 y1 ]- u) q
the team.”
' y/ [' g& ]* a7 ]1 {/ iJobs took a small office next to the boardroom on the executive floor, conspicuously
& h' C% K ^6 xeschewing Amelio’s big corner office. He got involved in all aspects of the business: $ e, E- ]& T: C9 c' j' i
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product design, where to cut, supplier negotiations, and advertising agency review. He
5 _9 }$ P3 L' S7 r3 W3 N4 Xbelieved that he had to stop the hemorrhaging of top Apple employees, and to do so he
2 {# {" A6 ]4 ]$ \2 xwanted to reprice their stock options. Apple stock had dropped so low that the options had
( c w( G8 j3 {# Mbecome worthless. Jobs wanted to lower the exercise price, so they would be valuable6 k% J/ b4 a8 Z, H1 N& P
again. At the time, that was legally permissible, but it was not considered good corporate
9 W* Y8 i" L* Y0 t$ apractice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting! M3 J. i ~6 X: R+ i
and outlined the problem. The directors balked. They asked for time to do a legal and: T: H% W$ u+ T7 u, `9 ^
financial study of what the change would mean. “It has to be done fast,” Jobs told them." ]' p" a6 N% f# R8 K- A, k
“We’re losing good people.”
& ^- L9 z4 ?+ r' V4 Y$ |2 z' bEven his supporter Ed Woolard, who headed the compensation committee, objected. “At
. S! G' T5 p* T7 HDuPont we never did such a thing,” he said.1 P* o, T. {' q
“You brought me here to fix this thing, and people are the key,” Jobs argued. When the+ O8 I- ?( s+ J
board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He+ z6 }. L* _# y" {$ ^
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,( O8 L! i4 M c; p
I’m not coming back on Monday. Because I’ve got thousands of key decisions to make that
" P p* X7 G2 N! Qare far more difficult than this, and if you can’t throw your support behind this kind of0 M, y# j) L* k: Z! g" w, k
decision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me, N, y' r; y2 p1 |% |
you can say, ‘Steve wasn’t up for the job.’”
$ D4 V1 v- T- l l) ?. I/ E5 n9 q, |' {The next day, after consulting with the board, Woolard called Jobs back. “We’re going to7 O _1 x- D4 K( }2 s$ ~
approve this,” he said. “But some of the board members don’t like it. We feel like you’ve/ S9 y! p& m2 E
put a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,7 u; R* B9 D7 F- \5 l* s* s# a
which was the price of the stock the day Amelio was ousted.
. ]4 i4 z4 S5 d9 G0 _4 fInstead of declaring victory and thanking the board, Jobs continued to seethe at having to
; V. S! w# b! t/ X) {. Hanswer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told1 {) O' Y# N; y
Woolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I% `/ S- @! U" K5 \; i- u
need all of you to resign. Or else I’m going to resign and not come back on Monday.” The) I' N A: @) N5 D3 F3 i9 @" F5 \
one person who could stay, he said, was Woolard.
/ } p% x8 l# EMost members of the board were aghast. Jobs was still refusing to commit himself to6 f& n" L6 g; z
coming back full-time or being anything more than an advisor, yet he felt he had the power* \1 l5 I; W, z- w Q! }& Y
to force them to leave. The hard truth, however, was that he did have that power over them.6 N8 |: x Q q# r p
They could not afford for him to storm off in a fury, nor was the prospect of remaining an
y' f- ~) M/ |( QApple board member very enticing by then. “After all they’d been through, most were glad
& x. S7 i/ E2 ^% y& ~to be let off,” Woolard recalled.
! s1 V* `& Z- M' K1 h0 yOnce again the board acquiesced. It made only one request: Would he permit one other' D# w. C- `9 v" t# t
director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were* W7 g, P+ c# {. H4 w) x0 d! ~% k2 {( Z
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a
% V u' j- r1 A, D" ~guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.
! d1 M* `# n+ U* p* J+ s2 {2 Q) G/ ?Woolard, on the other hand, was one of the best board members I’ve ever seen. He was a$ D: g/ _) j* g. Y- `
prince, one of the most supportive and wise people I’ve ever met.”
: Y0 E# l& t( _* e# a) K, kAmong those being asked to resign was Mike Markkula, who in 1976, as a young. O7 s8 B: o" M7 w( I
venture capitalist, had visited the Jobs garage, fallen in love with the nascent computer on
3 ?5 x* _* V) [% \8 Ithe workbench, guaranteed a $250,000 line of credit, and become the third partner and one-
) k+ q: b( p: }. {; j7 U3 L8 x/ @3 X; }# Athird owner of the new company. Over the subsequent two decades, he was the one
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constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at
: V9 h) y1 p: R* |2 v! Jtimes but also clashed with him, most notably when he sided with Sculley in the
* N" J4 c: d2 C9 j9 i6 qshowdowns of 1985. With Jobs returning, he knew that it was time for him to leave.2 u0 k% V- O3 r1 }# x: s
Jobs could be cutting and cold, especially toward people who crossed him, but he could
1 v6 v1 K$ s9 y ~2 malso be sentimental about those who had been with him from the early days. Wozniak fell
7 m9 |/ m/ V0 z( M3 Minto that favored category, of course, even though they had drifted apart; so did Andy
3 U/ Q0 N0 z0 SHertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as; t: a* [8 m, a- a& B
well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”1 D' G8 k1 w$ ^) Y: _2 G# X: ]) { J
Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs+ _6 g9 f* t7 }- G/ G6 w+ J
drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As: s0 F& x' l" h/ n3 {- D
usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a
6 o$ m8 X! R6 opicnic table. “He told me he wanted a new board because he wanted to start fresh,”. U7 _5 o! o9 R
Markkula said. “He was worried that I might take it poorly, and he was relieved when I
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They spent the rest of the time talking about where Apple should focus in the future.% T# }6 t$ {9 p8 A
Jobs’s ambition was to build a company that would endure, and he asked Markkula what
2 I& }- V) W& @7 Z* @5 G8 {the formula for that would be. Markkula replied that lasting companies know how to5 @8 F7 w- [( P- M4 z8 {- ~7 R/ x. Z8 Q
reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument1 Q _2 Z# u4 J& m J, W
company, then became a calculator company, then a computer company. “Apple has been0 O* ^' h7 @/ J' m: H4 J/ R
sidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the
2 p9 n, m, J4 X7 q: y* |company to do some other thing, like other consumer products or devices. You’ve got to be
; s0 w# F+ q, [like a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.% {) ~* L! V5 B" X2 V- B$ G
The old board met in late July to ratify the transition. Woolard, who was as genteel as
0 `+ }5 c) N6 M- KJobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and
0 P- m+ o: ]! C) a: csneakers, and he worried that Jobs might start berating the veteran board members for2 O* E _9 @2 n9 w$ b
screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the
0 ?: c) l% z: l9 Q- U, ybusiness of voting to accept the resignations, elect Jobs to the board, and empower Woolard! S8 j' p6 ?- O; H& ]- s* Y8 A# U
and Jobs to find new board members.
( \4 k: P% a3 c3 W) W; ^# U( |2 r* w/ TJobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to
4 r( u: x4 a- Vjoin, but he hated attending meetings. Jobs said it would be fine if he came to only half of
' T% [6 v9 z* O: L! Hthem. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture
5 Q3 `* K3 _8 K: ^+ i& gof him that had appeared on the cover of Business Week and had it blown up to life size and, y' b0 W: a5 w
pasted on a cardboard cutout to put in his chair.)
, c4 e. c3 L3 J9 Y9 u7 v6 ]: h+ I) ?Jobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s
/ D% h2 F; t/ M- vand been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking, K5 T" j1 h7 W& [3 U5 {
with Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was
" R7 {* H4 S3 m8 Hthe CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his
/ T: X- v0 v+ u. Z# A1 whouse,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said, U4 i- b& h! |
he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will9 U0 ?! S: O1 r: v9 G0 H4 K4 Q
do that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,
+ g1 ` W3 ^9 C8 Twas to “get A performances out of B players.” At Apple, Jobs told him, he would get to
$ H9 M9 K9 j( R3 s7 O5 @: _work with A players. + {2 z- L+ B6 P, r- ]1 \
2 T, o4 i) U3 ]" }
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r9 z' u. ^, X0 p# u" t, m% A" D
* X. `, `( O" w; z$ V1 GWoolard helped bring in Jerry York, who had been the chief financial officer at Chrysler9 ]) \5 @3 t* w; }
and then IBM. Others were considered and then rejected by Jobs, including Meg Whitman, Y$ B* P6 g9 h/ }5 s+ R$ [1 n- R
who was then the manager of Hasbro’s Playskool division and had been a strategic planner) w, w' V% Q; b
at Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor5 m/ ^" M" H T8 D+ z$ U
of California.) Over the years Jobs would bring in some strong leaders to serve on the( O3 J: F8 t) y' P/ Y8 F: n
Apple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,9 V* N. m" d* C
Mickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made
1 \; ~) s3 S6 t7 J1 d; O U4 Fsure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times8 |5 V! a' |7 X; e8 I" l4 s
awed or intimidated by Jobs, and they were eager to keep him happy.
1 u2 b% G) ~; Q# iAt one point he invited Arthur Levitt, the former SEC chairman, to become a board A! z' a' g) O' e& |4 v+ j/ V" H
member. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to: ]; u2 M+ b6 d3 M
Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
) [" e8 U7 \6 u2 u$ `role with Jobs. But then Jobs read a speech Levitt had given about corporate governance,
* x6 V! O; E: U# vwhich argued that boards should play a strong and independent role, and he telephoned to, S8 E% \) S7 `6 x9 Y2 s
withdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it7 u2 d1 I' R* P3 m8 P7 f" {
best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues+ ~8 u) h$ ~- B1 r+ G8 G/ j# Z
you raised, while appropriate for some companies, really don’t apply to Apple’s culture.”
1 |' R0 q# O M) f8 q: d. X8 u4 XLevitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to
+ ]* n6 W5 \" P2 F; ~act independently of the CEO.”4 N6 `/ r) k$ v( d
( }4 O8 x& K0 c# p" ?& r& uMacworld Boston, August 1997
1 h- K1 ]& V* M1 Q) {4 l' |- m! x7 a& M- p$ K
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and
2 \3 i% ?3 ?# Y: d7 \4 {the executive team,” and it soon became public that he was running all of the company’s0 N" c+ | L f: C0 q; A
product review meetings. These and other indications that Jobs was now deeply engaged at
' F) R# U, K( G- O; V; b! uApple helped push the stock up from about $13 to $20 during July. It also created a frisson
7 x6 W0 x7 ^5 H* Uof excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.. n) Y( B/ d+ U8 w8 X7 g6 v
More than five thousand showed up hours in advance to cram into the Castle convention$ G. i% Q: p2 S5 Q) P V# b7 e9 B
hall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning
( Y# Q, |7 D* T% Z. O/ qhero—and to find out whether he was really ready to lead them again.
8 @5 r# u2 a) |, ]1 H9 r4 {Huge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
% i9 \- n0 L! u: d' tscreen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being
" Z" y: K+ b. K: ? @introduced. When he finally strode onstage—wearing a black vest, collarless white shirt, M a8 j$ `; C- A- E* R
jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At
\; v6 @8 o# P. m- K- ]# d" ofirst he punctured the excitement by reminding them of where he officially worked. “I’m3 ?7 ~8 x/ \9 |1 v( s) {) @
Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide/ _ |; M I- d, c2 L, @& _
onscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,6 e9 c' r" d! v% o1 Y, A
are pulling together to help Apple get healthy again.”
$ z5 q$ u3 P! o7 V! m1 PBut as Jobs paced back and forth across the stage, changing the overhead slides with a
1 ?3 d: \3 B( P- d6 O# ], Gclicker in his hand, it was clear that he was now in charge at Apple—and was likely to
1 T- g1 N. f7 @' R9 b Hremain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s& r+ k* k3 L4 m; k4 z
sales had fallen by 30% over the previous two years. “There are a lot of great people at
' w* S" z, e- Z. g# }. t+ [Apple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve
5 U9 R$ N/ U0 C4 E
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2 d' h: k/ M. B( s& m! \ @6 E& K7 ^, R3 W
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( h8 E0 K; Z5 @1 K5 h/ J& F
3 N* p! `$ [8 ]! ?6 \$ ]2 I0 O8 F. n0 ~( f- A
found people who can’t wait to fall into line behind a good strategy, but there just hasn’t; \8 A# H& v S
been one.” The crowd again erupted in yelps, whistles, and cheers.
( f+ E' o2 K1 s1 `2 D! q: BAs he spoke, his passion poured forth with increasing intensity, and he began saying
- D: r; I; P) ^: u3 k" T4 p1 h“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think
9 s& S0 R( u+ F; n) s1 ]; Jyou still have to think differently to buy an Apple computer,” he said. “The people who buy# i$ ?; C' N# ?# j
them do think different. They are the creative spirits in this world, and they’re out to
! u3 N. \* K% S8 T0 q: Y1 C7 u9 j0 ~change the world. We make tools for those kinds of people.” When he stressed the word6 Z( q- {. b0 O" T
“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in0 x2 t \; U7 P
his final peroration, he continued to stress the word “we” as he talked about Apple’s future.
0 y4 o- l, e% P, V' N“We too are going to think differently and serve the people who have been buying our# `" B$ k) v. W2 d
products from the beginning. Because a lot of people think they’re crazy, but in that
& ~/ f1 S% @6 qcraziness we see genius.” During the prolonged standing ovation, people looked at each
1 \6 K7 R0 j7 n( n2 rother in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and+ g" V3 l, \9 a6 L( q) g/ @
the “we” of Apple were one.
8 Z$ h% v% H! x0 N$ x7 ~: u/ i1 J+ e1 t! `- \
The Microsoft Pact
2 C4 h9 c. ]1 B4 ?, _
0 _1 e4 }( Y$ U( ZThe climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,
+ N: U# I# D2 {! ~/ l: L: @one that made the cover of both Time and Newsweek. Near the end of his speech, he paused
9 I: R; E v( u* p p. \ ofor a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”
+ c1 _: z; ]$ Q: dhe said. “It needs help from other partners. Relationships that are destructive don’t help7 i; Q5 P, Y- r' G2 |; ]7 B
anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d/ I9 ?8 ]. }8 u5 E: h# W. ~% z( M& O
like to announce one of our first new partnerships today, a very meaningful one, and that is
: u2 j& y+ F: G% c; {one with Microsoft.” The Microsoft and Apple logos appeared together on the screen as
9 A# h" K+ f* @' ?& ppeople gasped.2 P5 F1 x. z) v6 W
Apple and Microsoft had been at war for a decade over a variety of copyright and patent
* m2 P; d) |$ |9 bissues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical
; P* M5 p- w2 L- y: duser interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a) I, _: O! g3 p) }# d5 z P, H
surrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it
# J' R& o; Q' M' k8 w% O9 H' Vwould make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came/ \' w! O5 }4 A" a2 a5 ]
out with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to
: r" J( j- R( b/ r3 S! qWindows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s
2 X/ Z& G" [5 \; ltrick of “clipping” overlapping windows) had made the infringement more blatant. By 1997' g/ z+ x* c- Q: ~: t
Apple had lost the case and various appeals, but remnants of the litigation and threats of
- u |: `7 T8 Y/ F5 E4 @. ~new suits lingered. In addition, President Clinton’s Justice Department was preparing a& }5 i6 @, h3 _/ p" d% a
massive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to
' E6 p4 `& J' ^7 DPalo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him/ r' E% k* C& y T: e# K& ]
over coffee. Instead simply keep them tied up in litigation. That would allow Apple the
$ H2 G4 T4 h6 J j8 y3 L) Wopportunity, Jobs explained, to “make an end run” around Microsoft and start offering( m$ r& y5 `( t; i: w7 f
competing products.
5 u/ o! H: {5 @0 F# J0 X! GUnder Amelio, the showdown had become explosive. Microsoft refused to commit to, Z5 O/ o: ]* K$ J4 p5 |
developing Word and Excel for future Macintosh operating systems, which could have' b. F3 s1 W9 b, m8 _5 \3 K. E
destroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was 7 p0 c# Z! ~1 e9 @7 {1 P. P: h+ W
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understandable that he was reluctant to commit to developing for a future Macintosh9 |+ ?7 s4 a( j/ P( o
operating system when no one, including the ever-changing leadership at Apple, seemed to9 ~9 a3 Y/ I( m: h- M# b
know what that new operating system would be. Right after Apple bought NeXT, Amelio
/ q7 P' H4 n1 C4 N( eand Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them& x- V, d$ @2 a7 U( R3 V1 K7 `9 V! E
was in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I" Z3 g- F# q) u7 B/ _
supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by2 ~6 Q" Z" r$ F" q
“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation
^; `/ |4 A% Pwould soon be clarified.
6 u5 ~" @6 x2 t$ z# _ F6 J; @When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first) C3 C0 i# N/ O# f
phone calls was to Gates. Jobs recalled:
/ W9 ^8 d. N/ G) T4 I: U; B% k' \I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft) y+ s4 ~+ G( o3 g0 J& P b
spot for Apple. We got him into the application software business. The first Microsoft apps
+ p$ D* B+ _4 Fwere Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was! l8 t6 \ o2 r. v, c) [, Z
walking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we
5 W6 a& _7 e3 d/ F; h/ O1 acould win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to& w# _+ B& {" K" n& z
survive that long if we’re at war. I know that. So let’s figure out how to settle this right6 J1 M& |5 L- B$ y
away. All I need is a commitment that Microsoft will keep developing for the Mac and an
( A# K! b& P# ~% t( \investment by Microsoft in Apple so it has a stake in our success.”
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c) b7 s" @ F& Q! k" V" a2 U5 ]0 o- `& x
6 h; G) W" m3 G% Q* a1 `
When I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of
X' g2 u, P8 I; M* kpeople who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had, t5 O! _3 I# X$ h# ~% r5 Y
been negotiating with Amelio for six months, and the proposals kept getting longer and" S% J- K, w' @% s
more complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I0 r3 b- M- g# C6 h' x2 G: E
want is a simple deal. I want the commitment and I want an investment.’ And so we put
; m- f1 d8 A& ]4 o% tthat together in just four weeks.”& y2 U1 P# F F5 q9 M- m0 V
Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out: Z; v$ |# r! E" m% V( \
the framework for a deal, and then Maffei returned alone the following Sunday to work on& N0 u% f3 c3 A* A0 |
the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the& a7 W0 o! g9 M. ?# j1 X
refrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore5 b5 i, Y9 V, i( C6 p" p: Z
shorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the
4 r" E* m% C6 A- E* `$ s+ N0 Kcore issues. “These are the things we care about,” he said. “A commitment to make
8 c- e' j" p* ?1 M7 s. Q. h) ^software for the Mac and an investment.”
# m1 z* M. @/ X( ?7 N8 m3 wAlthough the negotiations went quickly, the final details were not finished until hours
. e8 K% P2 Z$ ibefore Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when
$ S" K. y) l; R) M- rhis cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he
0 o; p _% N+ q7 C( Zwalked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour.
+ ?4 Y5 g" M# u4 y* ?# Z9 k- DFinally, the remaining deal points were resolved. “Bill, thank you for your support of this& Y" J0 B* j1 N! F c% W$ ~
company,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”
1 { Z O1 R3 g1 nDuring his Macworld keynote address, Jobs walked through the details of the Microsoft
2 E( d: V2 Q* |8 Ddeal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s f: i/ m4 H5 `2 _# ]
announcement that, as part of the peace pact, “Apple has decided to make Internet Explorer
8 N! S% U+ T: L, o' \. z. B. \; w
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* o3 [$ i! a7 U d5 Z2 }- T) nits default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly
9 i3 s( E/ U' wadded, “Since we believe in choice, we’re going to be shipping other Internet browsers, as+ R3 o& v$ u# n c8 a, C' \) g
well, and the user can, of course, change their default should they choose to.” There were) d6 |6 l$ V, G E% ^
some laughs and scattered applause. The audience was beginning to come around,
Q, |! Y2 _! d) }8 mespecially when he announced that Microsoft would be investing $150 million in Apple and
% |) q& R1 N O& H8 }! \3 r! l* lgetting nonvoting shares.
' M: K" x. s$ T- c7 {But the mellower mood was shattered for a moment when Jobs made one of the few
9 ~" A' W! d0 R3 X6 lvisual and public relations gaffes of his onstage career. “I happen to have a special guest
4 r' D+ z1 [* N$ ]' [with me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on
0 h; z6 r5 z- ^- b2 @# R6 H8 ]the huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s
9 s3 K; w: R0 S9 i& F( {% m" `- _face that flirted with being a smirk. The audience gasped in horror, followed by some boos
8 s( y% h* R; q# U; k4 ^' Yand catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half
( Z( ?! [; M+ P6 H9 r# y' h# nexpected (and hoped?) that an athletic woman would suddenly come running down the4 R) e7 P4 i. H4 }
aisle and vaporize the screenshot with a well-thrown hammer.
: u9 J( A$ I+ J( G2 e* J" TBut it was all for real, and Gates, unaware of the jeering, began speaking on the satellite x8 K+ Y: B/ _; R
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my
! c. x' f6 I8 ucareer has been the work that I’ve done with Steve on the Macintosh,” he intoned in his
9 D! v; n# `; n- R9 Shigh-pitched singsong. As he went on to tout the new version of Microsoft Office that was9 W% n% H) w5 E( t$ N; K3 w$ H
being made for the Macintosh, the audience quieted down and then slowly seemed to
- H8 N! t: R7 Qaccept the new world order. Gates even was able to rouse some applause when he said that! p; E9 G/ d5 L' U
the new Mac versions of Word and Excel would be “in many ways more advanced than0 _ T) h& L7 B, h, r7 D( s! v
what we’ve done on the Windows platform.”. _ J b& \" q
Jobs realized that the image of Gates looming over him and the audience was a mistake.& l! W% R2 G" ?
“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest/ P1 k3 _+ K- @' b1 \8 y
staging event ever. It was bad because it made me look small, and Apple look small, and as
5 f+ d" _4 f; S! M0 _: K1 Lif everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the( n# N& V! v9 ?& g0 c+ [2 \
videotape of the event. “I didn’t know that my face was going to be blown up to looming
* b8 s) L- d, D) F4 ^proportions,” he said./ {! V, E f, I6 V
Jobs tried to reassure the audience with an impromptu sermon. “If we want to move9 [7 L) L$ W0 q, i8 v% K* C) ^
forward and see Apple healthy again, we have to let go of a few things here,” he told the
- w% l1 q7 h3 @audience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
2 Q8 d4 _6 ^. q |: bthink if we want Microsoft Office on the Mac, we better treat the company that puts it out! y$ |6 q7 w6 {9 u5 L
with a little bit of gratitude.”$ o+ c$ F0 M: ], K+ o
The Microsoft announcement, along with Jobs’s passionate reengagement with the
6 ` T0 X+ Z; s( Y- f) B* } vcompany, provided a much-needed jolt for Apple. By the end of the day, its stock had8 J: `6 u; y7 F/ Y3 d, ^3 F
skyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned./ v+ B' h* b7 C+ a
The one-day jump added $830 million to Apple’s stock market capitalization. The company
0 c$ H" r; q6 B7 Vwas back from the edge of the grave.
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CHAPTER TWENTY-FIVE
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