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CHAPTER TWENTY-FOUR
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/ E' o1 I7 h9 BTHE RESTORATION 9 |/ e6 ~% Z8 ?
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9 _1 F" \9 `3 T) V) ?7 iThe Loser Now Will Be Later to Win
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$ x3 J+ _! F0 k. c: q) P8 wAmelio calling up Wozniak as Jobs hangs back, 19974 I4 s% T. E6 v0 a
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Hovering Backstage: T# e" R- K( \; B- B
" A$ u& m1 M. a“It’s rare that you see an artist in his thirties or forties able to really contribute something
! B: P7 J6 k2 f& l2 f* N* `amazing,” Jobs declared as he was about to turn thirty.
2 ^& n/ U& }+ Q& v7 HThat held true for Jobs in his thirties, during the decade that began with his ouster from# w2 q% K" {3 I% J9 G
Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that
, G9 z4 W! T8 v0 kyear, and the following year Apple’s purchase of NeXT offered him reentry into the
- D. }( D) V% j A$ Icompany he had founded. In returning to Apple, Jobs would show that even people over
, N! [8 N T+ G! bforty could be great innovators. Having transformed personal computers in his twenties, he* k3 {. P9 w4 q. s1 }: D
would now help to do the same for music players, the recording industry’s business model,5 h" J4 \4 p. n$ c& M* z7 I# g
mobile phones, apps, tablet computers, books, and journalism.! \: f0 r1 k% M; m: ^, I* |: _
He had told Larry Ellison that his return strategy was to sell NeXT to Apple, get' |; ?# R0 Y6 L6 Z& O
appointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may
, w. G3 N$ D% Bhave been baffled when Jobs insisted that he was not motivated by money, but it was partly3 g2 p; \3 [4 z0 \3 H6 G
true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic8 {# \1 D8 R. t9 n2 m9 G
impulses nor the competitive urge to see how high on the Forbes list he could get. Instead! l: Z0 l* Y: H( l1 _0 t4 u
his ego needs and personal drives led him to seek fulfillment by creating a legacy that
8 _: n, S9 p7 @) U9 jwould awe people. A dual legacy, actually: building innovative products and building a
# H5 h% e* c& U `" }: j- \0 o9 dlasting company. He wanted to be in the pantheon with, indeed a notch above, people like
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Edwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to
4 n& U& n& Q! r0 Z# C- K# T$ oreturn to Apple and reclaim his kingdom./ x+ Q# x1 u' w" U/ u% [
And yet when the cup of power neared his lips, he became strangely hesitant, reluctant,
! |6 Q: O/ _8 e. n1 D. c( o7 v' U2 M2 Bperhaps coy.
, _4 L# N' \& a1 l6 e5 h: iHe returned to Apple officially in January 1997 as a part-time advisor, as he had told
5 C/ ~0 _+ t7 u5 t1 z/ V4 a" eAmelio he would. He began to assert himself in some personnel areas, especially in
( h: s% L% Z% f& x5 W* {protecting his people who had made the transition from NeXT. But in most other ways he
6 n/ g4 N1 [) X. K) ewas unusually passive. The decision not to ask him to join the board offended him, and he9 h0 L$ T1 `8 F/ F+ A3 L
felt demeaned by the suggestion that he run the company’s operating system division.3 b7 u5 O! K* n& q1 E
Amelio was thus able to create a situation in which Jobs was both inside the tent and8 f! W U9 i* D
outside the tent, which was not a prescription for tranquillity. Jobs later recalled:
' S6 j" j d- G4 d0 B7 PGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him
$ {. l" F& E7 }1 b |% cthe company. I thought I was just going to be trotted out now and then for events like
; }8 o2 y* \ l" M& k. [% x: LMacworld, mainly for show. That was fine, because I was working at Pixar. I rented an
0 s6 L' X& r* v6 j/ Joffice in downtown Palo Alto where I could work a few days a week, and I drove up to
; |3 o2 y Q! D( O7 iPixar for one or two days. It was a nice life. I could slow down, spend time with my family.
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& y0 n/ L T, r r' g5 GJobs was, in fact, trotted out for Macworld right at the beginning of January, and this+ |- u6 t" Z' b5 _; E% J0 O
reaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful
; u9 }, ~( T3 c7 S! qfought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote, _& c! [- C7 G; J# R: v5 b
address. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in
! n; E, H5 t1 W) _7 T1 ?The Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple4 v1 I. A) F7 ?) Z3 {/ V
event.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket
5 H2 m0 {; U9 h& xand a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall% p$ p4 g$ q: w
Street Journal reporter Jim Carlton noted, or in the words of the technology writer Michael2 _8 m5 h# C. D1 V, r
Malone, “looking exactly like your newly divorced uncle on his first date.”
0 y& X8 Y# f/ q* v5 w# gThe bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle) P& S$ ~0 T% v* `9 o. ?6 ~
with his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset+ ]3 B1 u' ^' m2 H; J
by the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed
7 C, i. n I* W1 X; ^& s/ u+ g) ~and endless presentation. Amelio was unfamiliar with the talking points that popped up on$ i- ~0 Y" V9 |3 W4 q9 h
his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train
7 Z1 n; N% `/ i% Y, j: Zof thought. After more than an hour, the audience was aghast. There were a few welcome# |5 f2 c7 A e% Z1 ~+ t7 B
breaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music
s- |3 R% c5 |/ K$ }program. He also pointed out Muhammad Ali in the first row; the champ was supposed to
5 @& T) p, t& ?, X- c( b4 |come onstage to promote a website about Parkinson’s disease, but Amelio never invited
0 T4 L5 G( t, x- U/ b5 C! S& |8 c( hhim up or explained why he was there." \- c, g @' u7 g/ ~2 z8 `
Amelio rambled for more than two hours before he finally called onstage the person4 s- ^8 c. g7 b5 ^
everyone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was
+ M1 j& p- K9 t( `; r! p6 o6 F" Xthe antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of3 w$ y3 r3 Z' g/ r+ q; R
Elvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave: @6 H( Y& g9 e' j) `
him a raucous ovation for more than a minute. The wilderness decade was over. Finally: y6 K+ @7 \- o) ~$ I( @
Jobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark # e$ a, T! s/ \/ k
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back,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we
' X: O2 X* o3 e% K0 H* o& ahave to come up with an OS that’s even better.”/ n/ m v3 ^/ C7 x) ?% n$ a
Jobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.
% H& c! P# W, vUnfortunately Amelio came back onstage and resumed his ramblings for another hour.
6 n. L+ V* I. a# CFinally, more than three hours after the show began, Amelio brought it to a close by calling
+ q" q4 b7 M+ g- v/ aJobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there
/ i4 s$ F0 b% e# i$ \& E9 jwas pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant# u# H; m0 G& z* ^0 ~
trio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the8 v6 M$ K% [' H$ r( L0 g
closing moment I had planned,” Amelio later complained. “His own feelings were more
5 [, @1 I3 Q- {important than good press for Apple.” It was only seven days into the new year for Apple,' i# f0 m# }9 y
and already it was clear that the center would not hold.
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Jobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure' ?8 P# e) Y0 p, k
the really good people who came in from NeXT didn’t get knifed in the back by the less: o) T- c0 F2 F4 m5 e9 S8 ?, d9 _
competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who2 g V% Z0 w# s7 X) ~3 X k% Z
had favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially
9 w0 {/ _! a% m2 Z$ ?2 C, P @when she continued to want to use the kernel of Solaris in the new Apple operating system.
( a7 }% d9 B% y k! Z# p/ gIn response to a reporter’s question about the role Jobs would play in making that decision,
$ {4 S; X$ I- {she answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two
1 T. ]! x% J) h3 K1 |of his friends from NeXT took over her duties.
! i8 b6 v; m# b$ Z% C! k- i0 d' x* pTo head software engineering, he tapped his buddy Avie Tevanian. To run the hardware' y1 k( }& P' ?+ ]$ K1 M8 m
side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a
5 `* p _1 ]6 ?* w$ M3 [6 V( C& S; i. zhardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.
8 b- h, U+ c/ J% O& g- W8 D“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got# z2 B% O$ @! S- M3 t- b) [# F
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he4 n' _( ]5 {1 B- }
expected. He and Tevanian would exchange glances at meetings as if they had stumbled' ?: g5 l- }& |7 G3 o" t! N0 g) u
into an insane asylum, with people making deluded assertions while Amelio sat at the end5 G8 z* y; n6 S6 w+ D1 [, W3 C
of the table in a seeming stupor.
% h8 H- N( E% K$ G& LJobs did not come into the office regularly, but he was on the phone to Amelio often.
1 U- S; L2 S0 M& }9 J8 Y5 TOnce he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted3 u4 {9 d) m0 _. C7 c
were given top positions, he turned his focus onto the sprawling product line. One of his
3 R/ \$ p6 d, j& Bpet peeves was Newton, the handheld personal digital assistant that boasted handwriting
+ }/ r1 }7 ]2 d. x6 J* Qrecognition capability. It was not quite as bad as the jokes and Doonesbury comic strip
$ {3 e0 i/ {# k, x9 }made it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing2 A9 i! D; A0 c& ]5 }$ V+ i6 R+ l
on a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent" O0 N0 u. } `: H1 v- i4 ?
another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet
' x& n+ a$ Q$ h) r- Tproject. That alone doomed it in Jobs’s eyes.5 j4 k( G7 P0 a: c
“You ought to kill Newton,” he told Amelio one day by phone. o0 E+ Y* J* Y
It was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill E, ?6 N3 L) c8 r
it?” he said. “Steve, do you have any idea how expensive that would be?”! \* A7 f* ]% s3 A& [: o
“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.5 A5 i# I9 f; A) q& F# w
People will cheer you if you got rid of it.” " Z7 D/ q; L0 k; Y0 ^
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“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t
" E5 l0 }5 x' e# O( Gsupport getting rid of it.” By May, however, he announced plans to spin off the Newton: S5 I' x) ?9 R
division, the beginning of its yearlong stutter-step march to the grave.
3 Y: r/ V. |5 n+ p ^Tevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon" g; B! v$ N- i7 f9 r0 O
much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not
4 Z- U9 ?* C4 M7 R2 y1 Yso much a Machiavellian power play as it was Jobs being Jobs. Wanting control was
% y4 n( F) a* O; Q* A0 N$ {1 Ringrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this6 Q ^) |; Y ?/ M; c& a4 b5 Q; \
when she questioned Jobs and Amelio at the December announcement, was the first with* U* T; b: }( W" m: n6 @+ f
the story. “Mr. Jobs has become the power behind the throne,” she reported at the end of, z ]4 c+ i, i. W% X# R3 d: R8 j9 u
February. “He is said to be directing decisions on which parts of Apple’s operations should
0 ~9 }. f* Y P) T) J, ~* Dbe cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,
/ l/ B9 R" ]. y) ^& a' t& Shinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’
" O1 V; `" Q) O# j% L& y6 \) R+ s+ v5 `) econfidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in; S& r/ j1 ~/ z+ b: s" q
reviving Apple, and he is intent upon replacing them to ensure the survival of ‘his% V: Q! V4 X) ], T7 W8 M7 _
company.’”
; I/ M! ^' X& C) j! I8 IThat month Amelio had to face the annual stockholders meeting and explain why the
1 j5 D3 D: P% a" s3 J9 a0 t8 @2 wresults for the final quarter of 1996 showed a 30% plummet in sales from the year before.
# H2 x8 H+ }; u# P( \# I, DShareholders lined up at the microphones to vent their anger. Amelio was clueless about( X+ D7 a0 X1 I! }$ s
how poorly he handled the meeting. “The presentation was regarded as one of the best I
% k# p' X" W4 ^) {6 Lhad ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
, A Q% c' ?: v! V8 J5 r. R) \ }the chair of the Apple board (Markkula had been demoted to vice chair), was appalled.
1 _2 R$ v _/ S% I8 g“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.5 e4 \ l2 i. \/ f x8 {* X
“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t, r+ Q9 b# ^6 q4 S6 f+ `* I) Z
answer the questions, didn’t know what he was talking about, and didn’t inspire any
( b! {/ y! X) z( Y# u; zconfidence.”
$ L# H/ \6 s8 f! i* } gWoolard picked up the phone and called Jobs, whom he’d never met. The pretext was to
$ V$ G+ e; u; M1 K; binvite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard1 f5 h; l6 b( e
recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone5 G' [9 S' ?6 O& N
call in that direction and asked Jobs point-blank what his impression of Amelio was.. @$ N8 e5 {7 `9 K% p' y
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the4 \5 F& Z- g. E! H$ |/ l& K
right job. Jobs recalled being more blunt:
& \ S" A3 G; p( v! HI thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.; M# \5 s" B1 {2 i$ R e$ M
He’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell
k% m4 h& e$ _- Chim, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the
. F/ x, w. e3 i8 b! J0 b) M1 L3 w; C$ Jpeople I brought into Apple. All of this took place in my head in less than thirty seconds. I7 [) I& e6 Q9 j! y0 w9 R
finally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him
! y+ c: [2 K/ J1 U# D5 Khave it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be1 L! }/ V7 a/ j$ U+ V- [% C' w
a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a4 \. t3 @0 }9 h c' W' w' d9 i/ F* f
really stupid thing. & P/ {1 P" T4 k" O! T
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5 \1 T, `* t4 }. W* dThat spring Larry Ellison saw Amelio at a party and introduced him to the technology$ t8 Z* O' `; y& w. t
journalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a
7 q- n1 s" C& u7 D" dship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.
4 V9 F0 {$ z m5 zAnd my job is to get everyone to row in the same direction.” Smith looked perplexed and
: e' n% C7 h6 N' W) Iasked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the& U! P; @8 I3 q
parable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I3 }- X0 b$ C/ R2 |: D" |/ f1 H
literally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took; d& h# h% Z( ?0 h( T+ c
himself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a
+ i' b" Z" k H0 q9 u& N. hwarning sign.”- C% s0 F o9 G5 k/ c% V+ D
Brent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was
6 b- b2 Y# m- s+ n$ V0 K7 Ifamiliar with his thinking, and in March he came out with a story detailing the mess.; i. U2 A# P) q# T2 B& n C, Z! z
“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled2 y; G0 R3 A$ F
techno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with
7 Y" E! E5 O& ~0 g4 ?8 E: Simploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he7 A% w, [: L# y$ `7 w
wrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately9 _; p4 d9 v P5 @2 m+ l! e
he has been overseeing Pixar, maker of Toy Story and other computer-animated films—
7 T+ w8 T9 }) ~5 L- F' K2 l5 u8 C4 Tmight be scheming to take over Apple.”1 v7 u" k- [4 Y) @1 n
Once again Ellison publicly floated the idea of doing a hostile takeover and installing his6 L2 G7 M" J: s5 ~% J1 a
“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.4 t6 {& }3 h' t6 P" N! B
“I’m ready to help him the minute he says the word.” Like the third time the boy cried% y+ o( x5 h8 G
wolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told
! F+ N9 K; R9 n4 i. @Dan Gillmore of the San Jose Mercury News that he was forming an investor group to raise
& E" V1 H1 r3 a3 t' Z' o- [ B$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3+ _3 L5 Q/ D. V1 ?, P
billion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to
# ~9 Q- Q2 \8 ]( l V+ C3 w8 }1 [) Zthe frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general3 m) `& W: |$ F/ _0 T
public to vote on whether he should go ahead with it.
. ]6 b# E( j1 |3 W+ EJobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now, K' V* d$ d5 Q" Y* J: }
and then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
7 t) B8 \- q' ^however, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.
0 v7 w6 g/ {( f4 E$ {. r' SSo Amelio called Jobs, whose response was equivocal but also partly genuine. “I really
, A1 P K1 f& c1 ] Xdon’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he
* P. j f( h1 c5 z( O; T, Iadded a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs
8 b3 S. a$ D# t6 z2 t8 k3 ]could have ended the speculation by releasing a statement rejecting Ellison’s idea, but8 |3 z" _, U! |! i+ |
much to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests" N& A' q8 U9 c5 N/ C3 n3 a
and his nature.
; G3 ]& h4 a& |" s$ A5 n0 a OBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple
! O4 s* p, |2 S: U# [/ HMincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and
" u8 X- W! `: Q2 }" b% mWired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of
# r" p" j5 w) Z1 }! ~$ dthorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of, f- W2 u [7 B l& _
Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they
1 c& M/ N* W! d+ `+ s# ~: Wtook the only computer that didn’t frighten people and turned it into the technological
5 _+ J2 i j# i3 ]8 Q5 R; r% A- K6 i& tequivalent of the 1997 Red Sox bullpen?”
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/ q0 q6 s( ?/ I, x( ]9 W- s* sWhen Jobs and Amelio had signed the contract in February, Jobs began hopping around1 w k7 R% X% Y; F4 C% a9 |- W
exuberantly and declared, “You and I need to go out and have a great bottle of wine to f+ e# R7 ^# T# C- ~ Z
celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their
! e/ c' o8 ?' q; h1 Hwives. It took until June before they settled on a date, and despite the rising tensions they! t$ n/ j" L% j
were able to have a good time. The food and wine were as mismatched as the diners;: S& u0 O3 d f$ n3 Z
Amelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;
! m7 f( G. ]9 ?9 d$ sJobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72. L/ S7 ` r, G, {) ^
Amelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”
1 c$ l/ a0 s3 k! Q, ?Jobs could seduce and charm people at will, and he liked to do so. People such as Amelio
$ Y, E) o0 K$ ^+ ? y& b# mand Sculley allowed themselves to believe that because Jobs was charming them, it meant
/ g4 x- |. v/ j! T8 @( Ythat he liked and respected them. It was an impression that he sometimes fostered by, E7 R# o. k5 ?: R7 R; W
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people& K8 }2 @# V. L
he hated just as easily as he could be insulting to people he liked. Amelio didn’t see this
+ z/ P6 z# q1 O) _because, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to: {) N# l1 W: \2 r2 A5 o
describe his yearning for a good relationship with Jobs are almost the same as those used. v4 n% W4 t6 r" E( J
by Sculley. “When I was wrestling with a problem, I would walk through the issue with0 M5 ~# m! e* q( l( p' r
him,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed, |3 A1 ?- c; v6 T* |- z
himself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind
2 A# D$ {1 J& v0 G1 B) [approached problems, and had the feeling we were building a mutually trusting% |/ y; w3 f9 [$ D" g @. N
relationship.”
9 Z) o$ s6 e. C2 |0 G4 a! e5 xAmelio’s disillusionment came a few days after their dinner. During their negotiations,5 j& q' d: A7 o+ O+ q
he had insisted that Jobs hold the Apple stock he got for at least six months, and preferably% X L/ ]2 g- R C% I( O8 w
longer. That six months ended in June. When a block of 1.5 million shares was sold,
% z( n6 e' N4 G( ~4 ?4 p$ p3 x. Z D% cAmelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.
2 C' [& z% t. p& e* n2 g1 n" {“Remember, you and I had an understanding that you wouldn’t sell any without advising us/ [+ S( u3 D+ ~6 B" r
first.”
5 v( b+ a3 i/ H/ V8 r3 {) u“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his3 S0 e" ~' E& I+ b( }
shares, and he issued a statement saying so. But when the next SEC filing came out, it% I# a0 H' Z3 s" g( Z
revealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank! O& x4 s6 F5 B3 I6 G
about these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of
' ?9 \; l9 M G$ {+ \) u+ adepression” about where Apple was going and he didn’t want to admit it because he was “a3 B- [0 ^: h, K7 o j: v
little embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I- A: A$ R0 H+ L
needed to tell Gil.”
; N- f! ~4 w! HWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
0 z0 z2 @% z7 G; N' J4 m8 Psometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies% v! I2 w4 B6 g! b |
not because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to
9 H" a4 |# e' \ x, wmislead or be secretive when he felt it was warranted. But he also indulged in being* T/ x: d. W5 c- n
brutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the
! o( V' r- y: j5 H/ d1 q2 J% ^2 Gdissembling and the truth-telling were simply different aspects of his Nietzschean attitude
( S1 J2 q2 `, w! T- {8 Z P) ~8 Wthat ordinary rules didn’t apply to him.
# p4 H$ ~- a( p: O2 H# y5 X* ~$ l% m' Y: L) W+ d$ a: { ? B
Exit, Pursued by a Bear ( l+ Y( b$ o- }
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Jobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares
* k% g0 X0 l; F1 Kand been misleading about it. So Amelio finally became convinced that Jobs was gunning$ p/ n ~: B: ?4 }0 k( M4 Q
for him. “I finally absorbed the fact that I had been too willing and too eager to believe he+ J7 G( F& X; Z: `. b2 P5 S, D
was on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were$ r( Y* ?# y8 B# C4 h0 N
charging forward.”8 r$ d. o; T3 u; n7 C
Jobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.* i& h: d% x, e, P: ]( c I% I$ @
But there was a more important factor in turning the board against Amelio. Fred Anderson,: X6 f2 |" q& r! X c* b- Y
the chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board9 o2 }- A L; B" D
informed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,
: g7 b: l5 B0 |! y% O* K9 opeople were leaving, and more key players were thinking of it,” said Woolard. “He made it
6 O: b# D- Z0 @% c' ?3 s1 P2 Cclear the ship was going to hit the sand soon, and even he was thinking of leaving.” That
1 S" _3 U; l' h6 zadded to the worries Woolard already had from watching Amelio bumble the shareholders
4 m/ a$ q% O8 m7 Lmeeting.
H5 v$ m' o. n4 z: a1 ?8 lAt an executive session of the board in June, with Amelio out of the room, Woolard) p" N* z' t0 B: F
described to current directors how he calculated their odds. “If we stay with Gil as CEO, I
; G* R7 J5 u. P9 M; e5 i: z: Mthink there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and
# I, k/ O; L' r2 [: q# Zconvince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t6 R2 G b0 ~ d$ X; H; n
get Steve back, and have to search for a new CEO, then we have a 40% chance of
( ? }7 E) F" n$ j" }! Bsurviving.” The board gave him authority to ask Jobs to return.
2 T8 \: g- ^- a, z0 L1 C2 u4 cWoolard and his wife flew to London, where they were planning to watch the
9 f& g! }5 }. T+ p) O7 A( X: \; LWimbledon tennis matches. He saw some of the tennis during the day, but spent his
# Y( f3 \. f+ A0 ?9 f+ Devenings in his suite at the Inn on the Park calling people back in America, where it was
- q H" c% N2 [daytime. By the end of his stay, his telephone bill was $2,000.$ c/ G' j% C. ~+ A
First, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to
* x% g+ u7 T( k7 f; h7 wcome back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own5 Y' x7 P7 W1 y
ideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I
3 l8 B; f8 [, L7 ]will help,” he replied.
# j1 U" x8 H4 r4 C% h+ L: F! s“As CEO?” Woolard asked.
4 A/ J, v: ]2 Y( x5 ]7 b7 j9 JJobs said no. Woolard pushed hard for him to become at least the acting CEO. Again
8 u3 e6 R8 O, U- f8 oJobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board0 p6 n" f1 z3 e2 G8 g
member—that was something he had yearned for—but declined to be the board chairman.
* [& s }! T8 ~9 e“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to
2 h; G, U5 D4 [! j1 y. O0 hPixar employees assuring them that he was not abandoning them. “I got a call from Apple’s
/ u# U& T) _9 Q' K4 g8 p& rboard of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I
! r" [$ u8 K1 K1 F% d( w1 odeclined. They then asked me to become chairman, and I again declined. So don’t worry—
1 I2 ^- Z5 s, V' zthe crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”* y% c6 x' V5 s. f6 h
Why did Jobs not seize the reins? Why was he reluctant to grab the job that for two
! K* [" m& H+ _, |) r6 Odecades he had seemed to desire? When I asked him, he said:6 N7 [) l! t' a& L" h
We’d just taken Pixar public, and I was happy being CEO there. I never knew of
& W2 P) M7 Y8 d+ G8 E( _% J( Tanyone who served as CEO of two public companies, even temporarily, and I wasn’t even h4 m" \. M' a/ J5 p" K4 E7 j/ X
sure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time6 R/ O" n+ Y; d
with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up
3 \* l8 H& c; [7 r7 {- l. u2 P6 Dthis nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to # C2 F% x$ h3 h. X- x( e/ u# Q7 t
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people I respected. I finally called Andy Grove at about eight one Saturday morning—too
1 U/ m1 D7 v4 Q6 i% o4 t& F/ `early. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I+ \; s/ ~* e! w3 D
don’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit
% d; A* Z. z5 y% q% q4 M, O ]+ s% g) Tabout Apple—I started it and it is a good thing to have in the world. That was when I7 X$ ?4 {4 M; Z0 {' H% c" L
decided to go back on a temporary basis to help them hire a CEO.+ t- Y$ N$ P/ Z4 S4 o5 T# ?; K
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; S9 Z! y8 \) I$ R) B$ |: tThe claim that he was enjoying spending more time with his family was not convincing. He
$ h- [7 x$ }1 _9 e# x4 Zwas never destined to win a Father of the Year trophy, even when he had spare time on his2 j$ y. w$ O2 A* h
hands. He was getting better at paying heed to his children, especially Reed, but his( |9 V, I# I& b( \. @0 R! y3 c0 r
primary focus was on his work. He was frequently aloof from his two younger daughters,0 p s) X+ r9 M7 M0 b+ A6 o
estranged again from Lisa, and often prickly as a husband.
6 j n. h7 m- v7 E8 ?$ f& A. MSo what was the real reason for his hesitancy in taking over at Apple? For all of his
4 t _* k8 f+ I' L4 rwillfulness and insatiable desire to control things, Jobs was indecisive and reticent when he( x$ h( b% R1 l) z
felt unsure about something. He craved perfection, and he was not always good at figuring
! K3 d8 n5 ]# E: a& Y( Fout how to settle for something less. He did not like to wrestle with complexity or make$ K& `1 P- ^. }% i
accommodations. This was true in products, design, and furnishings for the house. It was
6 m6 _: f8 N8 u T& Halso true when it came to personal commitments. If he knew for sure a course of action was* ^3 Q5 \- k3 S, [! s/ i
right, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to
3 ]7 B2 j$ J& d8 r4 Dthink about things that did not perfectly suit him. As happened when Amelio had asked him0 V# m5 ~: B8 I+ }1 W, ^
what role he wanted to play, Jobs would go silent and ignore situations that made him
m# ]6 O+ T; u. T3 t8 \uncomfortable.
% }- n) y: u$ CThis attitude arose partly out of his tendency to see the world in binary terms. A person( _, s: ?/ z% C
was either a hero or a bozo, a product was either amazing or shit. But he could be stymied
! t- D! C% r( nby things that were more complex, shaded, or nuanced: getting married, buying the right
* O. d9 C5 m+ J4 ^3 r, H1 \sofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I# B4 }* T& i( P
think Steve wanted to assess whether Apple could be saved,” Fred Anderson said.; Q) P, G* l+ k: w) S
Woolard and the board decided to go ahead and fire Amelio, even though Jobs was not
6 Q F3 j5 {$ s% Z/ y7 r* B+ Iyet forthcoming about how active a role he would play as an advisor. Amelio was about to0 [! Q) j( L; P( K
go on a picnic with his wife, children, and grandchildren when the call came from Woolard
! F2 j6 F, V7 W# {: J0 B4 c- l2 [in London. “We need you to step down,” Woolard said simply. Amelio replied that it was
: f" l' K5 A+ m3 h! u4 U' \( Mnot a good time to discuss this, but Woolard felt he had to persist. “We are going to& H3 G! r6 V8 a1 K
announce that we’re replacing you.”
; F$ \ q+ I/ {Amelio resisted. “Remember, Ed, I told the board it was going to take three years to get
0 d$ l( J2 ]0 R0 r4 Wthis company back on its feet again,” he said. “I’m not even halfway through.”
1 i3 `; S5 Q( k, D$ h; l% V“The board is at the place where we don’t want to discuss it further,” Woolard replied.0 s0 G; X0 r6 b
Amelio asked who knew about the decision, and Woolard told him the truth: the rest of the
4 G: f5 a! F0 F- D0 m5 Z t# Y: f Aboard plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His
$ O$ _8 z. g @9 jview is that you’re a really nice guy, but you don’t know much about the computer! o8 ?& N, \9 f9 N! U
industry.”/ K4 W5 d# G0 h/ @* z
“Why in the world would you involve Steve in a decision like this?” Amelio replied,
1 p/ d2 D7 z4 T8 `getting angry. “Steve is not even a member of the board of directors, so what the hell is he ! q0 V6 L" W4 P3 y0 i4 Y
) I2 f/ d! i/ f
7 D0 d& ?8 i% o: t- P. @9 f* y
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1 ]5 B$ G8 E, h. O" I; Z! a
/ l6 H# s$ _- h4 q7 @; H* ^4 |doing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to) J# j: v2 `' D, m/ F
carry on with the family picnic before telling his wife.2 |# c' x0 Z# {$ n' w1 [+ _9 n
At times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t
$ m. ]9 q1 c" h+ }' k$ `; Fcare one iota what people thought of him; he could cut people off and never care to speak5 ~. M1 y$ h2 D% a% A2 o3 a
to them again. Yet sometimes he also felt a compulsion to explain himself. So that evening
+ S7 A3 v: v- J0 P$ ^6 `8 JAmelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to. w$ w5 I s- B2 b- {/ ]0 A2 @& `
know, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want
( G, o( D: E/ B% d5 v- n3 T4 [you to know that I had absolutely nothing to do with this turn of events, it was a decision- `# g, F* o# ?/ ^+ y9 W- _
the board made, but they had asked me for advice and counsel.” He told Amelio he* F% f; M6 N1 J1 K7 N" G! ~
respected him for having “the highest integrity of anyone I’ve ever met,” and went on to
2 ?; ?# Z' j+ k6 E1 t6 G- Ggive some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown
7 A/ @! B9 x6 p6 L8 ~' u9 C& ?out of Apple, I immediately went back to work, and I regretted it.” He offered to be a6 y4 H0 s% A3 M/ G: \- m
sounding board if Amelio ever wanted more advice.
& G. M' P- X% b3 Y! [% W3 tAmelio was stunned but managed to mumble a few words of thanks. He turned to his
2 p p- ?& p4 T! f/ B8 \: Dwife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”
2 y& K8 g: q( @) f6 lhe told her.
5 P! E5 f7 \: M6 n1 H) U: |“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”
! C& N; E( i5 g$ F, I, C' |" x“Join the crowd,” her husband replied.* m7 I8 O+ f. K: R2 {6 {
Steve Wozniak, who was himself now an informal advisor to the company, was thrilled9 S* H8 f. S9 A
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,
! Z0 [" B t- V2 z“because whatever you think of Steve, he knows how to get the magic back.” Nor did+ j, y" L0 o* p4 j
Jobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil
K7 A. Q: d5 f, R- o. o4 kAmelio meets Steve Jobs, game over.”
4 N2 Y% o$ v g1 [That Monday Apple’s top employees were summoned to the auditorium. Amelio came in' T2 v7 _' A4 S9 I) X
looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he& r2 h$ p2 p3 [- { Z* F" j
said. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear, a8 s( E- u& A" M
that he would be taking his cues from Jobs. Then, exactly twelve years since he had lost
( z& G6 `6 \5 u* kpower in a July 4 weekend struggle, Jobs walked back onstage at Apple.
' B& [- l# q. N- M: j% S# lIt immediately became clear that, whether or not he wanted to admit it publicly (or even: Q5 J, C6 B: z9 `+ i' P
to himself), Jobs was going to take control and not be a mere advisor. As soon as he came
+ m) J H) F. R$ j% xonstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work! D% e* }- {% m5 {1 ~
reinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he
# Q0 O/ y8 ]- f" }. Usaid. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.' z- j! \1 g2 O2 t" j
“So what’s wrong with the products?” Again there were a few attempts at an answer, until( z- Z5 ^" @2 l* Q5 `' e
Jobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s
; a4 r" u, _- B+ Q1 D6 t wno sex in them anymore!”
& L( G: M+ `; h. E$ Z" XWoolard was able to coax Jobs to agree that his role as an advisor would be a very active
6 J/ y( d# t, \9 lone. Jobs approved a statement saying that he had “agreed to step up my involvement with
7 X" {( y) @" u! x) e; g& l4 QApple for up to 90 days, helping them until they hire a new CEO.” The clever formulation
. j U% J& v. t+ `' \% x& xthat Woolard used in his statement was that Jobs was coming back “as an advisor leading
" f% i0 @+ v- p7 l' C9 b3 b( Zthe team.”4 B: o' ]- C, S6 P9 B d1 N4 L
Jobs took a small office next to the boardroom on the executive floor, conspicuously/ u( i* b7 P* X9 m* J/ y% R( Q
eschewing Amelio’s big corner office. He got involved in all aspects of the business:
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) I5 m' S4 e. N6 G Vproduct design, where to cut, supplier negotiations, and advertising agency review. He' e4 o4 V# J, \& }9 H
believed that he had to stop the hemorrhaging of top Apple employees, and to do so he) v- h$ v; G6 z. `0 j/ h2 D
wanted to reprice their stock options. Apple stock had dropped so low that the options had8 I I2 X9 P- `9 } ^6 P
become worthless. Jobs wanted to lower the exercise price, so they would be valuable; p6 C# x8 x. q4 x( \' s2 W
again. At the time, that was legally permissible, but it was not considered good corporate! v/ h1 Y N1 r+ d$ z
practice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting
/ E6 E2 s8 s! u3 @1 Z+ N3 Zand outlined the problem. The directors balked. They asked for time to do a legal and. `- ^1 P5 y3 h% |" I
financial study of what the change would mean. “It has to be done fast,” Jobs told them.# G5 v7 s* _& P
“We’re losing good people.”
' t' N' U- ]* f, |- x; GEven his supporter Ed Woolard, who headed the compensation committee, objected. “At* C H& z/ ?( R7 T5 T( L- P- R0 g& `- b
DuPont we never did such a thing,” he said.
! P( s ]0 R: s I' A“You brought me here to fix this thing, and people are the key,” Jobs argued. When the0 B& k" ^, n+ i& H2 j2 N8 @
board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He* X, ~0 {4 D( N- F0 e8 P
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,. G5 Y+ m! d% d9 U: X
I’m not coming back on Monday. Because I’ve got thousands of key decisions to make that
- C* J" N+ Y6 B" L4 e; |' W; n0 Yare far more difficult than this, and if you can’t throw your support behind this kind of4 ^6 W' y- A7 T4 Y' f: f
decision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,$ d6 Z( g/ w7 {# C2 r+ |* s: q
you can say, ‘Steve wasn’t up for the job.’”0 i6 _# q8 I' h9 G' ~
The next day, after consulting with the board, Woolard called Jobs back. “We’re going to
* e/ e# z7 z2 iapprove this,” he said. “But some of the board members don’t like it. We feel like you’ve/ m6 j3 ~; U3 l9 u# @/ P% W5 @
put a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,
$ |* O! ^+ D6 W: R; T; kwhich was the price of the stock the day Amelio was ousted.
4 X+ p& o" A% }- V# ~7 EInstead of declaring victory and thanking the board, Jobs continued to seethe at having to; S* D4 H$ }6 V8 D0 m) k! y
answer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told! [! [' P% o6 H* n/ s$ T6 A3 @6 s
Woolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I
7 }; ]% `$ a; G( L- `' |need all of you to resign. Or else I’m going to resign and not come back on Monday.” The
6 f9 f( d/ [5 ]+ S5 u1 p. uone person who could stay, he said, was Woolard.; s; e6 D" j$ o
Most members of the board were aghast. Jobs was still refusing to commit himself to8 w1 q6 m: n# W6 r- R, d+ R
coming back full-time or being anything more than an advisor, yet he felt he had the power# V: O. ^7 {8 Z9 U/ {9 _5 A
to force them to leave. The hard truth, however, was that he did have that power over them.
" t+ ^3 v1 H( r+ D- f* BThey could not afford for him to storm off in a fury, nor was the prospect of remaining an
/ U- R& U* ~- aApple board member very enticing by then. “After all they’d been through, most were glad* F6 m! J% h8 `: b
to be let off,” Woolard recalled.
b2 c& u1 S: ?; W- [! k( _Once again the board acquiesced. It made only one request: Would he permit one other
% ?) Z+ C C$ D5 q) N2 |$ M: W0 |director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were- Q* ?6 O7 c$ D* ?( M+ e3 d
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a
3 _8 Y6 ?, C6 ~guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.
6 B1 N; d9 \! T# j6 A& C1 n9 aWoolard, on the other hand, was one of the best board members I’ve ever seen. He was a
4 L V( A1 w5 cprince, one of the most supportive and wise people I’ve ever met.”
k% y7 H& ` CAmong those being asked to resign was Mike Markkula, who in 1976, as a young+ w$ ~0 g/ I# `; s3 w U
venture capitalist, had visited the Jobs garage, fallen in love with the nascent computer on
X, m3 z9 a( ?) }* J8 xthe workbench, guaranteed a $250,000 line of credit, and become the third partner and one-& H9 {0 ^: H. _8 Z. w9 k2 P/ w
third owner of the new company. Over the subsequent two decades, he was the one ( E* H |9 {" G1 W
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constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at
) C" b, N4 c* P/ E7 ttimes but also clashed with him, most notably when he sided with Sculley in the$ L' V: Z6 z' C Q
showdowns of 1985. With Jobs returning, he knew that it was time for him to leave.
* i% g* c2 S% t5 R; P* v+ pJobs could be cutting and cold, especially toward people who crossed him, but he could
% k. ~: }, x2 j% p( [also be sentimental about those who had been with him from the early days. Wozniak fell, ^$ L/ a1 W$ c, |
into that favored category, of course, even though they had drifted apart; so did Andy
: h) C$ W k7 o5 PHertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as, t1 V& A. P5 J6 n) ^
well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”
9 k/ n4 s+ A$ k% [6 c: FJobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs
2 |7 m/ d+ c; K) I; S5 `drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As2 q& g( Y$ i! l( E
usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a
, o d$ o) ?6 U- o3 E# xpicnic table. “He told me he wanted a new board because he wanted to start fresh,”
- k( y! g8 Z2 ?5 W# g! X' a. ~Markkula said. “He was worried that I might take it poorly, and he was relieved when I
" D# G' f6 N2 x3 T' |! w9 e( `+ Kdidn’t.”
. N/ u- q/ h& q0 lThey spent the rest of the time talking about where Apple should focus in the future.
% P. [- C3 A' [, ~! g( @Jobs’s ambition was to build a company that would endure, and he asked Markkula what1 _' C' @/ a9 J3 U; T
the formula for that would be. Markkula replied that lasting companies know how to
- o# @& \7 K, q0 I& R; L" X* M- ereinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument
2 w( X" S5 w$ u* n5 t; |company, then became a calculator company, then a computer company. “Apple has been
" P) f9 x1 \ ~# P/ Dsidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the: O" ]3 q8 x# y
company to do some other thing, like other consumer products or devices. You’ve got to be Z; s) U& ~$ d& s3 e% c% T1 Z
like a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.
3 j/ K q4 D7 k! L. p8 aThe old board met in late July to ratify the transition. Woolard, who was as genteel as) [% s1 X; o' z- U7 r7 J3 v
Jobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and0 c# K9 j8 e+ _! w# P
sneakers, and he worried that Jobs might start berating the veteran board members for6 ?2 X9 x+ D$ E9 Z
screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the
8 k# C+ S- d5 e6 Z1 u b5 l4 }business of voting to accept the resignations, elect Jobs to the board, and empower Woolard5 O0 x5 A$ y+ m8 R2 `
and Jobs to find new board members.
' J8 _2 a( c) BJobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to. \; g/ N( \1 S# O1 B1 S
join, but he hated attending meetings. Jobs said it would be fine if he came to only half of
3 r- Z- j* `* s6 r* j) kthem. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture
, ^( x' O3 D4 Zof him that had appeared on the cover of Business Week and had it blown up to life size and: {5 i, S% B0 m- X! P0 @' A
pasted on a cardboard cutout to put in his chair.)
, r' ^: }8 H3 J/ }& SJobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s w- n. t1 U$ t6 o; k
and been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking
1 u2 C; H0 x' g% p1 a4 f n7 |5 D6 uwith Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was6 w' v: ^0 p0 a0 U* U5 T' y5 S
the CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his4 S% Y7 m6 }1 p2 d0 ]* ^
house,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said q& a* c( R7 m; P0 B. l' k
he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will
! V5 @- C. }9 Sdo that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,3 p# P4 f8 c- q
was to “get A performances out of B players.” At Apple, Jobs told him, he would get to
6 t6 R# w5 a! w% m0 ework with A players.
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: K; T q5 f9 W2 |Woolard helped bring in Jerry York, who had been the chief financial officer at Chrysler
- l# p6 C9 l0 x& Y y& mand then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,
% _8 N- U. x$ q4 _) o; v$ r$ K7 K6 wwho was then the manager of Hasbro’s Playskool division and had been a strategic planner
; i1 z' b6 f" e) h) w# kat Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor
& {2 z; R, w6 v8 B( `$ B( Y6 Oof California.) Over the years Jobs would bring in some strong leaders to serve on the
7 m# J. \( _& h1 |! aApple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,
$ H* C+ P! j+ l+ _3 {# Z" y# XMickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made
; t9 w( b+ b5 V) `8 Dsure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times( y/ Z ~' r0 G; |5 S! c# u( l+ j7 W- W
awed or intimidated by Jobs, and they were eager to keep him happy.
4 R2 c5 S$ x* t5 [! K/ LAt one point he invited Arthur Levitt, the former SEC chairman, to become a board
3 D! p& r, Q/ Kmember. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to% G: r7 e7 L( D: W1 r3 U
Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
+ @. E/ F# U: O/ g3 irole with Jobs. But then Jobs read a speech Levitt had given about corporate governance,. W) ?! `* E$ [, h9 X) H! y
which argued that boards should play a strong and independent role, and he telephoned to
% V# p8 z9 i2 R+ k6 Ewithdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it
0 y' M v5 y% M% Q5 y0 @best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues
( L/ A% P' L1 H/ nyou raised, while appropriate for some companies, really don’t apply to Apple’s culture.”
7 ]3 {, {1 @% pLevitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to
2 q' w, s! n6 a1 z7 Y0 Bact independently of the CEO.”: h2 {+ E+ F) I6 h
/ _$ N* s3 G7 MMacworld Boston, August 19974 T+ }3 M: I4 e' v( c/ y- l `! d% C
# o I/ j' F$ {) B# U* _The staff memo announcing the repricing of Apple’s stock options was signed “Steve and
/ d) `. m- w* C+ Vthe executive team,” and it soon became public that he was running all of the company’s# e+ k0 `, g. U5 a; s
product review meetings. These and other indications that Jobs was now deeply engaged at
% y. R+ Z& N( |. y0 HApple helped push the stock up from about $13 to $20 during July. It also created a frisson3 V% q. w1 U% J
of excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.' f; x0 Y$ o. i- d, O3 o; c
More than five thousand showed up hours in advance to cram into the Castle convention
0 q# ~* I3 M# H4 c% khall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning- j# _6 `7 q) t( K
hero—and to find out whether he was really ready to lead them again.
7 n8 @& E3 ?6 s, H( m+ ^Huge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
; u- ^6 }7 F' k. {screen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being
* I2 g [' c4 m# b( W$ I9 n o- Wintroduced. When he finally strode onstage—wearing a black vest, collarless white shirt,# n) W4 |! @/ @ A! q
jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At# c0 q5 r7 y8 W" i
first he punctured the excitement by reminding them of where he officially worked. “I’m% ]# R# {* v$ `6 H1 X, w
Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide
- J0 T6 ?; K# }9 w% g2 z6 Zonscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,
* F( O6 J) I- N$ u2 C3 |are pulling together to help Apple get healthy again.”- X f4 l. s1 F6 i. I3 a( Q
But as Jobs paced back and forth across the stage, changing the overhead slides with a
& ~* \& f$ E) [# x; v! sclicker in his hand, it was clear that he was now in charge at Apple—and was likely to
& D3 O8 f( J) A9 ~, j0 _remain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s: k: L0 Q) d5 U' T+ u' ?( c
sales had fallen by 30% over the previous two years. “There are a lot of great people at
6 Q2 [3 \) G) Y' kApple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve
0 f( t: A9 r0 f+ S( ` b1 T0 Q- Z& M2 `, Z/ }9 r6 j; t
' |; p% k- N& U' L- k8 x" D) f' c$ J4 r, E
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1 e+ h+ S; b! M, m4 M5 sfound people who can’t wait to fall into line behind a good strategy, but there just hasn’t
u8 H3 v, h k( B2 rbeen one.” The crowd again erupted in yelps, whistles, and cheers.
9 y( d: t$ {, S: t5 v$ G% GAs he spoke, his passion poured forth with increasing intensity, and he began saying$ |; \. C; \8 O, D+ z/ R
“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think" t; Z8 p. j1 J" r! \: g
you still have to think differently to buy an Apple computer,” he said. “The people who buy/ _+ x- i- Q) H+ H
them do think different. They are the creative spirits in this world, and they’re out to8 D: C9 y: s* t& r) W- c
change the world. We make tools for those kinds of people.” When he stressed the word
/ s0 O1 X8 x( w0 o# c W“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in
5 Z4 m, Q1 c1 l) p$ ^his final peroration, he continued to stress the word “we” as he talked about Apple’s future.
+ [/ b9 }; ^) Y8 K3 O5 |8 u“We too are going to think differently and serve the people who have been buying our: P. O: T$ k5 M6 `
products from the beginning. Because a lot of people think they’re crazy, but in that
0 ^ n. O0 M/ b0 ^2 K# ~1 v; Y" Pcraziness we see genius.” During the prolonged standing ovation, people looked at each
3 O# J9 B( t* V& I3 {other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and
Y% h1 M% l3 B e3 gthe “we” of Apple were one.8 G; U$ V. H+ g- y9 F$ N
; E9 a* B3 {, c- l
The Microsoft Pact
* A- m: D( S1 }) }5 j2 L3 a! y+ \5 p% C2 i1 N+ |/ C
The climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,( Y/ \9 Z. w- ?& q1 F8 y
one that made the cover of both Time and Newsweek. Near the end of his speech, he paused% I$ v0 h, _5 f- F) o
for a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”. o" q" Q- T) \: U; x5 H; v: ?
he said. “It needs help from other partners. Relationships that are destructive don’t help% v% Z3 D# v5 E( F2 j
anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d; x- @' s. {2 c+ {! A/ j
like to announce one of our first new partnerships today, a very meaningful one, and that is
; b3 j5 v4 O% o0 Done with Microsoft.” The Microsoft and Apple logos appeared together on the screen as7 c% q8 I2 ], m( R
people gasped.. |$ a& a' k7 o0 c- j& C
Apple and Microsoft had been at war for a decade over a variety of copyright and patent
" Z! N" w7 Y! b4 {. J4 cissues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical
# v6 w9 a0 w! E0 q% Y$ F; |5 f0 Ruser interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a
6 c. B* @) o" c8 q, wsurrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it+ L+ t0 `, E$ G$ D* i, W
would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came
, t; G0 ]! j0 nout with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to
; X, _' j; k( }5 i2 ?Windows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s8 u1 E# M. Y% v+ ?% q2 X5 ~& }( }
trick of “clipping” overlapping windows) had made the infringement more blatant. By 1997
6 z/ r) a0 V3 AApple had lost the case and various appeals, but remnants of the litigation and threats of' A( |& @( v' w1 {7 v7 T: A5 d
new suits lingered. In addition, President Clinton’s Justice Department was preparing a
' Y) f7 l( J% \0 Xmassive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to
0 z, W% b$ B# M7 z; ` RPalo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him
& B; D7 `& k' P* k$ oover coffee. Instead simply keep them tied up in litigation. That would allow Apple the
7 f0 j' ~2 U: G8 _/ Mopportunity, Jobs explained, to “make an end run” around Microsoft and start offering r; F5 u* |4 Z
competing products.
: B8 {# N" f& Y5 k9 L4 Q4 TUnder Amelio, the showdown had become explosive. Microsoft refused to commit to
0 P4 J4 e9 u3 Y: r+ ^developing Word and Excel for future Macintosh operating systems, which could have6 T( b0 p" ]5 K. |5 ~
destroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was 4 w" z7 P) f% W, Z+ ?
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understandable that he was reluctant to commit to developing for a future Macintosh4 i1 s2 T( I" I U1 V
operating system when no one, including the ever-changing leadership at Apple, seemed to5 \( u" ?3 Y# ?4 l @# _# B
know what that new operating system would be. Right after Apple bought NeXT, Amelio% o, E( a* j. h
and Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them/ a$ }0 r8 s) Z X
was in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I
7 |- N4 m) |) H* K; p! ~/ F# }supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by. Y# A3 v- m" M D/ V
“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation/ q: n5 e. H. q3 B, ] D
would soon be clarified.1 B" R: z: O5 z3 Q5 |4 ^2 d0 Q
When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first' T9 J, J- X5 i3 q) n
phone calls was to Gates. Jobs recalled:
9 N; Z0 C# ^$ o6 a9 ^I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft& R6 F' D, T- I4 _
spot for Apple. We got him into the application software business. The first Microsoft apps( h# y; C( V3 H- B
were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was, P7 i3 {( C1 h; I0 M
walking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we
0 Q7 A* v# J; `8 n# icould win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to3 [) c3 H; x! b" f3 v0 X
survive that long if we’re at war. I know that. So let’s figure out how to settle this right
+ Y/ K1 T' }8 f1 {% m4 |7 [away. All I need is a commitment that Microsoft will keep developing for the Mac and an
' r4 s5 R& B# ^1 I# O2 \. B: Y3 g2 o+ minvestment by Microsoft in Apple so it has a stake in our success.”
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4 [1 N/ p: }* o0 K9 GWhen I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of
3 q3 [: W( e7 Q) o8 E/ ~* Gpeople who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had# p, r, B3 z% S; n0 B
been negotiating with Amelio for six months, and the proposals kept getting longer and' \& v, f& D* i7 t M* H! I
more complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I
* X% F/ `9 K$ b, M2 Pwant is a simple deal. I want the commitment and I want an investment.’ And so we put
* V. H, N& O) n7 C0 [that together in just four weeks.”
' z2 R, @! M' O" Q2 ~Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out% Z% B/ [% M, y' m- s
the framework for a deal, and then Maffei returned alone the following Sunday to work on
1 A) T5 Y) u" v3 c7 |the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the
6 W4 q; \7 N1 v/ srefrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore
! z' s5 ~# J, b! q" I( B/ ?shorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the' M* S% I8 h9 C2 Q; a, L
core issues. “These are the things we care about,” he said. “A commitment to make. e9 z U0 ^/ m
software for the Mac and an investment.”, m H4 R- s8 Z* M
Although the negotiations went quickly, the final details were not finished until hours5 n& r, w& A/ E/ ]$ P
before Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when
1 p* l6 B' C- i5 F c9 I9 u5 mhis cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he" }) W! {( Y6 ]) |. R
walked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour.
1 J9 Y- K7 D3 q$ D6 m- lFinally, the remaining deal points were resolved. “Bill, thank you for your support of this
8 f8 S! M/ G% C4 {& t- ^company,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”
3 \, I* S7 U4 D) A/ [3 _During his Macworld keynote address, Jobs walked through the details of the Microsoft
* N( i# |( ^$ ?$ k( w, ]- w Zdeal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s* \: b$ I0 D9 e" ?
announcement that, as part of the peace pact, “Apple has decided to make Internet Explorer
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1 W7 h+ I( _" I" M7 V2 hits default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly v6 x2 q7 O& Q ]% j8 m
added, “Since we believe in choice, we’re going to be shipping other Internet browsers, as
' J5 h( k* X7 C& S* mwell, and the user can, of course, change their default should they choose to.” There were9 N& {/ \: {* ?, b2 T; i
some laughs and scattered applause. The audience was beginning to come around,
1 G! ^$ z2 Z$ s4 R; xespecially when he announced that Microsoft would be investing $150 million in Apple and
9 U% i% l' R, ]$ S- Dgetting nonvoting shares.
/ U! Q( V7 ?* c QBut the mellower mood was shattered for a moment when Jobs made one of the few
4 E+ z$ v2 N9 _ T: ?+ `visual and public relations gaffes of his onstage career. “I happen to have a special guest
/ {, Y2 ?! b7 c1 bwith me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on$ }' s9 y8 K0 I6 W
the huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s/ A$ K& f9 ]6 j) Q& U
face that flirted with being a smirk. The audience gasped in horror, followed by some boos& |7 o* P* ]4 m
and catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half. F. _5 x/ K1 w& B
expected (and hoped?) that an athletic woman would suddenly come running down the6 d# h0 t$ U9 ] O0 S& v
aisle and vaporize the screenshot with a well-thrown hammer.
5 H( y4 @, V) lBut it was all for real, and Gates, unaware of the jeering, began speaking on the satellite6 @% n' M* v6 R! v$ @$ F
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my
& t. C, A4 [& R9 t0 icareer has been the work that I’ve done with Steve on the Macintosh,” he intoned in his
! c1 g& _# d$ e+ Lhigh-pitched singsong. As he went on to tout the new version of Microsoft Office that was
- v, }2 k8 \& z& s8 Z( G4 _, [( ybeing made for the Macintosh, the audience quieted down and then slowly seemed to
7 S: K8 ~; U1 Q) daccept the new world order. Gates even was able to rouse some applause when he said that6 Q: V+ h8 ~1 m
the new Mac versions of Word and Excel would be “in many ways more advanced than7 f9 K! y3 E. n/ V3 B2 T
what we’ve done on the Windows platform.” Z- G, p" ]) I3 l" X8 q/ |9 ?* W
Jobs realized that the image of Gates looming over him and the audience was a mistake.
4 \: R' s; u# G8 F6 H“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest
, G4 B2 o4 B: }" j: N P$ Y; Zstaging event ever. It was bad because it made me look small, and Apple look small, and as& ~/ V3 u# p& X: i9 W) c
if everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the
^- E4 `; C- ]$ i5 @2 Bvideotape of the event. “I didn’t know that my face was going to be blown up to looming
4 _# H0 q1 J3 |8 B+ R) v% J. d6 }proportions,” he said.
& d& x. D7 [/ W6 ~) Z/ u2 E6 H& GJobs tried to reassure the audience with an impromptu sermon. “If we want to move
7 j/ [8 e9 c$ ~8 X% vforward and see Apple healthy again, we have to let go of a few things here,” he told the
; }1 @8 R4 U* b6 d+ N) baudience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
4 u) W8 i7 L% r+ l! t9 zthink if we want Microsoft Office on the Mac, we better treat the company that puts it out
. C- r7 g5 }8 _) lwith a little bit of gratitude.”. B( c& K3 ~: n, o
The Microsoft announcement, along with Jobs’s passionate reengagement with the/ P' q$ A# f1 I G, f
company, provided a much-needed jolt for Apple. By the end of the day, its stock had
2 N( e8 A$ z% N; ]. N0 R9 u' L. Zskyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned.8 \& ^5 O$ w# }" [0 q2 A ~
The one-day jump added $830 million to Apple’s stock market capitalization. The company% [( O! q' F4 ^0 a
was back from the edge of the grave.
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CHAPTER TWENTY-FIVE 4 S* B. B, D1 o7 V
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