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CHAPTER TWENTY-FOUR, k) I: U# P6 i/ l6 B1 c3 I M0 N: ]
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# C$ g! v8 A" N; G/ [: X- wTHE RESTORATION
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The Loser Now Will Be Later to Win
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% w ^8 I2 p7 f2 M" r& [1 @Amelio calling up Wozniak as Jobs hangs back, 1997
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Hovering Backstage
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“It’s rare that you see an artist in his thirties or forties able to really contribute something- N% [* U8 w/ F- {
amazing,” Jobs declared as he was about to turn thirty.8 n1 T1 [0 J( F) P( O$ p9 Y
That held true for Jobs in his thirties, during the decade that began with his ouster from9 {7 x0 j) U; O+ {9 s9 r5 G
Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that
4 i( K- f8 V% m! j; G6 D! o) pyear, and the following year Apple’s purchase of NeXT offered him reentry into the# e% v0 O4 n+ U+ ^, I# t
company he had founded. In returning to Apple, Jobs would show that even people over% D2 k3 c z- f J" G# Z
forty could be great innovators. Having transformed personal computers in his twenties, he- V. n" C, h% d- b( s
would now help to do the same for music players, the recording industry’s business model,5 \9 Q. {. E+ z* _4 Z: {& A
mobile phones, apps, tablet computers, books, and journalism.
& l4 l- Y- Y; e4 D1 _ z" DHe had told Larry Ellison that his return strategy was to sell NeXT to Apple, get
d: g3 X2 A- A' D: H$ l( kappointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may5 ^: a5 z l! R
have been baffled when Jobs insisted that he was not motivated by money, but it was partly# w% \7 O/ m; k) e9 F
true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic6 y. ^" ^( y9 t w! e+ g
impulses nor the competitive urge to see how high on the Forbes list he could get. Instead: s( z0 t! E) `- v
his ego needs and personal drives led him to seek fulfillment by creating a legacy that
5 d/ L5 {* d; x/ I# pwould awe people. A dual legacy, actually: building innovative products and building a* A6 g, {5 i! R' S1 w/ G, n
lasting company. He wanted to be in the pantheon with, indeed a notch above, people like ' B+ M+ q* ~6 m, P% E
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Edwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to
8 y& i5 o6 q- p8 R, { n kreturn to Apple and reclaim his kingdom.
7 V! C4 G& H P6 ]6 G' ^8 U. JAnd yet when the cup of power neared his lips, he became strangely hesitant, reluctant,
( C. z& @# h0 M: X2 Hperhaps coy.
" N" y) j' @# Z4 o! p' `( kHe returned to Apple officially in January 1997 as a part-time advisor, as he had told
6 A% ~ N7 _* z& Y! f0 CAmelio he would. He began to assert himself in some personnel areas, especially in/ |! Z1 R% O G
protecting his people who had made the transition from NeXT. But in most other ways he
+ v6 S4 J' }( [/ a- j: H# dwas unusually passive. The decision not to ask him to join the board offended him, and he
* [: e6 [" C% Q* u) zfelt demeaned by the suggestion that he run the company’s operating system division.9 j7 a0 D0 B6 u- a, u6 D
Amelio was thus able to create a situation in which Jobs was both inside the tent and$ e8 R. i6 G$ E: w2 P3 t
outside the tent, which was not a prescription for tranquillity. Jobs later recalled:
, o" X6 D/ o) N5 W- UGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him! U }* _3 V1 A, ~1 ?
the company. I thought I was just going to be trotted out now and then for events like
" C& C* }+ ?; s, O, AMacworld, mainly for show. That was fine, because I was working at Pixar. I rented an& C. ]# w& j# l* s: O5 V
office in downtown Palo Alto where I could work a few days a week, and I drove up to
C& |# G, u/ h' g4 U6 cPixar for one or two days. It was a nice life. I could slow down, spend time with my family.
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Jobs was, in fact, trotted out for Macworld right at the beginning of January, and this+ _- `) F9 W( C2 r0 Q
reaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful
5 L$ U! s% c M1 efought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote, D/ C3 r% k& A, b7 z$ E
address. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in5 [+ I+ s$ G2 y
The Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple
, d& C' A8 R& |9 Y3 ]7 Z( Devent.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket6 V3 ~9 w {" o- ^: \9 a: [! b, q
and a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall
, G; q( L9 C. h9 f! HStreet Journal reporter Jim Carlton noted, or in the words of the technology writer Michael
9 L3 s: D3 E, A i9 B. XMalone, “looking exactly like your newly divorced uncle on his first date.”1 E: Y! ]/ G8 I* y9 H) }9 A8 m* W
The bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle
/ i6 X8 x9 a }* a. o" P E) bwith his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset
" }; N9 o. i6 ]* u) u$ q7 h' mby the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed
+ |) I# U- m w/ ^$ |( @and endless presentation. Amelio was unfamiliar with the talking points that popped up on
% Z: P! [$ H6 n" i L- k/ Nhis teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train" y& \$ M" m b, D$ |
of thought. After more than an hour, the audience was aghast. There were a few welcome
0 s8 W- S9 }, O9 ebreaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music
0 Z( u% o# Q+ h: sprogram. He also pointed out Muhammad Ali in the first row; the champ was supposed to
1 I: i( Y* _' k1 v4 vcome onstage to promote a website about Parkinson’s disease, but Amelio never invited
5 X) S+ r5 `+ O) B! k o* Y+ R: fhim up or explained why he was there.
; I8 V9 S2 m: m, W, q1 o# bAmelio rambled for more than two hours before he finally called onstage the person8 A6 a0 K( t; z( g% K
everyone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was
! ^4 O( n& u* K7 t" C2 T! T% Q4 Mthe antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of7 Q1 g; s; P4 c" I
Elvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave+ f; d0 O5 P1 X' N" N& A' r% f
him a raucous ovation for more than a minute. The wilderness decade was over. Finally5 A" {9 P9 N# w/ F& ?% [# [
Jobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark
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back,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we
* F+ A. c* H9 Y6 f& Q# Thave to come up with an OS that’s even better.”* r' z9 A* W( }5 T5 W; H0 i% j
Jobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.
7 f4 J# [7 X$ R5 S D+ L* CUnfortunately Amelio came back onstage and resumed his ramblings for another hour.
" l# T0 `7 A; I$ v |( o6 k2 t/ vFinally, more than three hours after the show began, Amelio brought it to a close by calling, N+ l0 a2 b& T" ~9 s7 H# r
Jobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there
) K0 d" N+ N- O/ twas pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant. s2 O0 R5 {3 f& R; W. L9 m
trio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the
$ x* R7 w. k& V4 Q9 P, k, E) mclosing moment I had planned,” Amelio later complained. “His own feelings were more
0 z a2 M6 x" d3 Iimportant than good press for Apple.” It was only seven days into the new year for Apple,
4 j4 L1 Y! M. C& v7 H: y P+ gand already it was clear that the center would not hold.. ?5 k8 q4 ?* V% J- R! z
7 l0 Q# Y" h+ ?( x7 V" W, }6 V0 hJobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure
; F' @! g7 o5 I }0 k5 E9 {0 Sthe really good people who came in from NeXT didn’t get knifed in the back by the less x( B2 p4 D3 s
competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who' ^4 P& R# \4 f4 Q* I
had favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially
1 Z5 D9 f" b$ O! `! X5 ~$ ^; M- iwhen she continued to want to use the kernel of Solaris in the new Apple operating system.9 Y6 K: \/ P( L H, O
In response to a reporter’s question about the role Jobs would play in making that decision,4 j' k3 T& [ i( \
she answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two
7 N1 W$ }4 g& H+ ^1 v8 u- cof his friends from NeXT took over her duties.
- V, u. t9 b, T vTo head software engineering, he tapped his buddy Avie Tevanian. To run the hardware
' A5 k: m6 B: tside, he called on Jon Rubinstein, who had done the same at NeXT back when it had a
8 z. A4 |% W2 whardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.5 C% h" p; l3 {% ^7 @) \. w9 U% `
“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got& ^* J5 O" g8 ]) `1 {
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he
$ I4 U% \& A$ X' X* rexpected. He and Tevanian would exchange glances at meetings as if they had stumbled
6 [* H' e$ r- l% s Zinto an insane asylum, with people making deluded assertions while Amelio sat at the end, U1 z% A$ K5 c9 G+ }9 N
of the table in a seeming stupor.' |/ M- @5 E/ ^+ P9 |3 M
Jobs did not come into the office regularly, but he was on the phone to Amelio often.: p: M9 v1 S5 D2 }) N$ h7 }' |
Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted
5 @0 a& w L: y k- V* b# Q8 iwere given top positions, he turned his focus onto the sprawling product line. One of his
, _, f; r7 O$ j9 p( ?9 Epet peeves was Newton, the handheld personal digital assistant that boasted handwriting( d' D1 P9 T. _
recognition capability. It was not quite as bad as the jokes and Doonesbury comic strip
9 D7 U5 v9 Y( n: B+ p8 ]! {: T8 ]made it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing0 q0 d6 G9 m% C( @
on a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent
Z5 O5 K. S* panother.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet4 A# I' j5 \6 k6 F
project. That alone doomed it in Jobs’s eyes.
; `. g6 x# m# L) v“You ought to kill Newton,” he told Amelio one day by phone.
- C3 q& s* k1 X& i) @+ E6 {It was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill7 S! P; y5 ~0 ?9 Q+ p
it?” he said. “Steve, do you have any idea how expensive that would be?”
) W( X4 G& o3 d8 W+ q) C' W; Y“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.: I' ?6 G/ n' p* I+ L
People will cheer you if you got rid of it.” ! T/ z# G6 u% _$ C
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“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t
6 @0 ?( i6 k1 ]0 Msupport getting rid of it.” By May, however, he announced plans to spin off the Newton1 I6 j, p5 f5 `0 K; T6 k' B
division, the beginning of its yearlong stutter-step march to the grave.: g# S7 f& ^* R( }0 K D
Tevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon5 ^" S# u, k6 g
much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not9 n8 K6 v0 L" u2 x( z. Z, l( F
so much a Machiavellian power play as it was Jobs being Jobs. Wanting control was
# Q6 }* }3 P0 Y5 R/ A3 vingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this
0 i; @: E( v Q2 Y- E4 Q: Awhen she questioned Jobs and Amelio at the December announcement, was the first with
8 U# w* i) G( a' M5 p4 rthe story. “Mr. Jobs has become the power behind the throne,” she reported at the end of: m. W g+ H8 ~; ?3 x$ z+ V
February. “He is said to be directing decisions on which parts of Apple’s operations should9 e9 d* [6 p$ J
be cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,
( P4 m) G8 i3 }/ q/ q6 r4 shinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’4 G% W8 I5 k5 u `6 v& ^: [
confidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in
( I8 \0 C" w4 Rreviving Apple, and he is intent upon replacing them to ensure the survival of ‘his: }" Q- Z, ~" F: x$ a
company.’”
" f8 A& L) T2 ~6 @That month Amelio had to face the annual stockholders meeting and explain why the
- r% I) U/ p% Vresults for the final quarter of 1996 showed a 30% plummet in sales from the year before.
R# ]2 Z/ Z3 W! b' FShareholders lined up at the microphones to vent their anger. Amelio was clueless about3 r! T( R! O% b/ K4 s
how poorly he handled the meeting. “The presentation was regarded as one of the best I* g5 Q/ a% m% n3 X" R. F
had ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now- t" l2 b* u+ |) c$ S7 ~# z7 Q
the chair of the Apple board (Markkula had been demoted to vice chair), was appalled.8 x5 g/ n6 t2 }! S
“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.
& ^* I. S4 Y$ @& C, o“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t4 f+ t8 F5 e$ w" F
answer the questions, didn’t know what he was talking about, and didn’t inspire any' u# Y/ `8 D+ S( L+ H/ F
confidence.”
: O9 O2 A1 l6 o/ s6 RWoolard picked up the phone and called Jobs, whom he’d never met. The pretext was to# N5 U! a/ E. Z! C5 f9 w4 f
invite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard" c& ~6 K5 ]8 {
recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone4 f9 I! Z3 R" J2 M! f1 b' @4 K
call in that direction and asked Jobs point-blank what his impression of Amelio was.6 P. V" d( U5 r9 Z- j) r* x: ?2 V
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the
+ W7 x) N N% u1 a. yright job. Jobs recalled being more blunt:
3 S2 S! h& w- `: wI thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.
$ e. D6 Z3 q( G) F1 c* `" FHe’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell
& {+ i& {; u& `* u; D, }2 |him, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the
/ B3 ~$ F5 ]" I9 y( y: Epeople I brought into Apple. All of this took place in my head in less than thirty seconds. I9 z0 c: E3 |& ?( p4 F Z) w
finally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him
) C# }, N( H6 z/ o, B6 x7 l4 O: ehave it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be- r+ U g4 P5 c1 t! f( z4 @& D
a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a
' C- ^: Z+ m5 N- u$ X, Xreally stupid thing.
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+ e$ k3 _ N* f0 ^5 O0 ~$ H! x7 RThat spring Larry Ellison saw Amelio at a party and introduced him to the technology
+ N3 T x: n/ k6 x7 D3 i& Cjournalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a
* q- N1 {. i; M! ^$ F, ^% hship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.
9 A& i W! R% k4 m0 v l( CAnd my job is to get everyone to row in the same direction.” Smith looked perplexed and
$ [7 r7 H9 p5 r4 D- r% [asked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the
$ C9 o, k7 c7 ]# fparable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I$ ^& x. X/ I5 z+ P/ k$ n6 o
literally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took
* v9 b+ J4 a o9 f/ K/ f8 v* vhimself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a% o9 u! }- c3 k/ ]! B: ]- ~
warning sign.”
+ \! }: b$ I; r' i |4 BBrent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was
[+ {1 F- ^1 Z! L& Zfamiliar with his thinking, and in March he came out with a story detailing the mess.
; x6 P: L7 }$ b+ n$ E" n7 `" u“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled
$ D3 I& C' M0 Z. A' Atechno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with
! O) X1 H7 [* @9 J: W( ~imploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he
# K6 g& _$ L& B; f; v3 `wrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately) n/ U ~" R( s$ V
he has been overseeing Pixar, maker of Toy Story and other computer-animated films—6 ~% t Q Y) `3 |+ w
might be scheming to take over Apple.”- y& z% m4 U1 z$ Z1 i1 Q& }+ Q; v0 s
Once again Ellison publicly floated the idea of doing a hostile takeover and installing his& {# D& b) L8 k! |7 {
“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.* G0 z* @, T! ]2 _' d- U
“I’m ready to help him the minute he says the word.” Like the third time the boy cried( H& A6 n F+ b O
wolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told
3 A; {' ~, v5 u" }/ x b# ~" s; m9 QDan Gillmore of the San Jose Mercury News that he was forming an investor group to raise5 v( m0 e" ^- A8 ?- M
$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3
' \5 A! b0 Z0 g& zbillion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to# _3 m5 N2 M$ Y( |5 z! E3 U0 C
the frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general
" b8 Y/ w y3 D7 D \public to vote on whether he should go ahead with it.% p' V$ u- N0 ~( o, n
Jobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now# j4 D3 }' a. v2 Y
and then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
f2 X& R( ?7 s5 }8 A. }& _) Ihowever, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.+ x4 S- _; C0 }% y8 B
So Amelio called Jobs, whose response was equivocal but also partly genuine. “I really/ t8 ~' f2 e+ a* L8 e
don’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he0 c+ p8 o7 M& ]- x6 i: w2 A* f
added a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs1 l- E8 O( i: f( w0 K
could have ended the speculation by releasing a statement rejecting Ellison’s idea, but& }7 I. ~3 n' w
much to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests) @' p# p9 K1 E: ]+ B9 v) m" n
and his nature.
+ v; X! `' u* VBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple
, s0 o0 x: }" I1 }; j. f* ?! ~Mincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and+ n2 w6 ?0 H2 ^: U" p/ A. P
Wired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of( `) A( I) ^" R- t- J% X7 l2 x
thorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of K* M6 X9 t5 S6 l% w, ?
Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they
$ O' y6 |% T8 J z) l& Ktook the only computer that didn’t frighten people and turned it into the technological
9 Q( u1 j. i; g0 |3 M6 ?5 u& bequivalent of the 1997 Red Sox bullpen?” ) G" g0 B3 W o& [2 C! F
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8 \, _& O* x4 AWhen Jobs and Amelio had signed the contract in February, Jobs began hopping around
4 h# ?3 G3 U @- w1 I" Yexuberantly and declared, “You and I need to go out and have a great bottle of wine to- \8 ?7 H7 l# `* j$ I% Q
celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their. s! q8 ]' g! R! ~
wives. It took until June before they settled on a date, and despite the rising tensions they
& N# ~" E) F5 E( owere able to have a good time. The food and wine were as mismatched as the diners;5 K1 V5 U6 ^7 _7 ` l1 K0 n
Amelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;8 }6 K0 }9 B- l2 L- V8 Y
Jobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72.) o1 w7 r/ S/ r# B2 x% J5 ?
Amelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”1 t+ y( Q8 B# j3 D. ?% f% f
Jobs could seduce and charm people at will, and he liked to do so. People such as Amelio7 \$ Q0 h5 i# v- c. H
and Sculley allowed themselves to believe that because Jobs was charming them, it meant
5 H4 {( g: n4 u1 C- m/ tthat he liked and respected them. It was an impression that he sometimes fostered by$ a; Y. c) {3 f$ f t8 |
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people
7 F2 |7 z E6 D7 @4 \he hated just as easily as he could be insulting to people he liked. Amelio didn’t see this
# S+ C0 b' i# Zbecause, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to1 }1 Y3 U: E( K
describe his yearning for a good relationship with Jobs are almost the same as those used
. `* |, ~$ a& [+ @8 Tby Sculley. “When I was wrestling with a problem, I would walk through the issue with
& w' l2 [4 f6 T2 v, Q% Yhim,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed
& m5 z- Q8 c0 m7 K" N* ^' ^himself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind
, J3 Q, w7 A" ~, Q" s: l. papproached problems, and had the feeling we were building a mutually trusting
$ r6 g. Q$ c5 b! \7 x( brelationship.”, p# }2 {5 e( n/ y
Amelio’s disillusionment came a few days after their dinner. During their negotiations,, O/ |) w: q: Y3 `* e# c" v3 t7 p
he had insisted that Jobs hold the Apple stock he got for at least six months, and preferably, q' E' }* O7 B! ]
longer. That six months ended in June. When a block of 1.5 million shares was sold,
: ]4 B6 x9 M6 k3 A' TAmelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.
2 L4 a+ O. W/ n“Remember, you and I had an understanding that you wouldn’t sell any without advising us* h% x) C) t2 @4 M. V
first.”! f0 ^& c5 W* S
“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his4 [. m: R3 S0 p& P2 w* Q
shares, and he issued a statement saying so. But when the next SEC filing came out, it
5 |: [/ A8 g( Irevealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank2 d k# x! G$ E* a: B# Q
about these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of
) }' ~# H1 L" ~& x8 x8 A* \depression” about where Apple was going and he didn’t want to admit it because he was “a
. A' G+ n1 P( p& Nlittle embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I
; w6 C1 S. W- Zneeded to tell Gil.”
9 ?9 ?* C2 p: B3 u# {Why did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
( @4 ~3 i; C, K& ksometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies b$ x# o& T0 N/ p! ?. T
not because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to
3 ?; r( a. k& Hmislead or be secretive when he felt it was warranted. But he also indulged in being( ]6 x, ]6 ^/ X; @1 t' s
brutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the
+ q, C9 Y/ d% `0 l6 P0 b# sdissembling and the truth-telling were simply different aspects of his Nietzschean attitude G/ h- V6 W; z( ^4 i
that ordinary rules didn’t apply to him.
) y+ r- ~' K) v: z# m' c& s+ h4 i; c# R' C% D$ H! D% w
Exit, Pursued by a Bear
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. @) x0 m, q5 ]0 q* ^8 i: e9 Y7 v$ @Jobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares
- n/ q5 J3 O$ _$ g! ~+ \+ N1 |9 Rand been misleading about it. So Amelio finally became convinced that Jobs was gunning
' U& M! l6 f" ^- o Y/ U$ `for him. “I finally absorbed the fact that I had been too willing and too eager to believe he
' |( C1 Z$ x1 R0 A* Zwas on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were& R n+ m0 K& u7 h
charging forward.”
E% v; R. V. p' P+ R) zJobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.
* h' E n8 ~# Y) h i, FBut there was a more important factor in turning the board against Amelio. Fred Anderson,3 s0 S8 N! s2 O7 ~9 d1 D% d
the chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board
, j1 F9 _9 ~$ d0 \8 z7 O6 y) Sinformed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,
' ^8 t* i9 \2 T1 H4 @& R5 D$ ^people were leaving, and more key players were thinking of it,” said Woolard. “He made it! M3 } i A2 M) p6 I
clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That
% A* |( z% V0 vadded to the worries Woolard already had from watching Amelio bumble the shareholders% G+ X2 K- X6 W/ x$ K
meeting.
5 @. q6 _0 j: c% e+ e* H. zAt an executive session of the board in June, with Amelio out of the room, Woolard
/ P% g* ^4 u& C2 w. l2 zdescribed to current directors how he calculated their odds. “If we stay with Gil as CEO, I0 m) T$ L4 W3 j/ @2 E3 X: w
think there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and1 k7 U% i% Z' Q% P
convince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t' O% ], g% e- k& T! y. K% G
get Steve back, and have to search for a new CEO, then we have a 40% chance of8 ]" C7 W' W7 ^& g; x; s( Q
surviving.” The board gave him authority to ask Jobs to return.% O9 N" Q% `5 i& Z# E
Woolard and his wife flew to London, where they were planning to watch the* F% _# G9 q/ q( F& [
Wimbledon tennis matches. He saw some of the tennis during the day, but spent his
* ~- E, U3 i1 ^5 K1 H' Vevenings in his suite at the Inn on the Park calling people back in America, where it was' o! v1 g$ l# q1 K# S
daytime. By the end of his stay, his telephone bill was $2,000.3 C' e: c! @! b! R# F
First, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to8 Y5 L4 c/ D( k$ S* }1 o
come back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own
5 V! G1 l0 H" G5 ^. W2 P$ T6 ~" Wideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I, ]: V. a, J4 Y' ^, W! G% T
will help,” he replied.
4 @& {3 J/ w$ `5 J3 P8 s“As CEO?” Woolard asked.: `' f2 `# \7 T1 _; S$ D
Jobs said no. Woolard pushed hard for him to become at least the acting CEO. Again4 ]; Q/ Y0 G9 T: s6 X& e
Jobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board
( ~. y; o- A( J @1 d3 Omember—that was something he had yearned for—but declined to be the board chairman.! k% r* m+ H# @) @+ [# V1 ]- y% m
“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to4 g6 ~- c2 {) C9 `# V
Pixar employees assuring them that he was not abandoning them. “I got a call from Apple’s, {# c2 l# s. ]/ I* F
board of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I/ b- t2 S }* X* g
declined. They then asked me to become chairman, and I again declined. So don’t worry—
9 O; P% N- _# B: A8 p. _+ L9 |the crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”
( t* A) X/ W& S% C g0 hWhy did Jobs not seize the reins? Why was he reluctant to grab the job that for two8 O0 R0 t* A, U
decades he had seemed to desire? When I asked him, he said:
5 d7 j% _" Q+ s) F2 Z0 C) q, C/ ?! YWe’d just taken Pixar public, and I was happy being CEO there. I never knew of
: g' _" R, a/ r# h1 yanyone who served as CEO of two public companies, even temporarily, and I wasn’t even2 j9 g& u2 ?! A& v7 N" n
sure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time9 i# A; d4 K, N, X7 q
with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up
* t+ K+ `' ]! }, Dthis nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to + x( L; Z5 e. ]( J7 ?
) p8 [( C# `$ I: \1 \
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people I respected. I finally called Andy Grove at about eight one Saturday morning—too
1 i, b* K9 m: {early. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I
3 r: H9 k4 @5 y* e! xdon’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit. Y( w" X, Q: }
about Apple—I started it and it is a good thing to have in the world. That was when I3 O- v+ {2 B, S+ V, Y0 b. X7 a
decided to go back on a temporary basis to help them hire a CEO.% X4 F* ~2 ^5 ]
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+ a3 p' S* v+ o" }1 T5 ^- L" xThe claim that he was enjoying spending more time with his family was not convincing. He
" T9 Z) _# T, K% A: x- Twas never destined to win a Father of the Year trophy, even when he had spare time on his
6 N# j1 H( ^: |! ]$ ~3 ]; [hands. He was getting better at paying heed to his children, especially Reed, but his3 Z) j7 I/ ~9 O! P" N) D
primary focus was on his work. He was frequently aloof from his two younger daughters,
5 o( E9 `7 ^. G+ Z' @. H Hestranged again from Lisa, and often prickly as a husband.
6 T: ` f! W0 a9 Y# J& lSo what was the real reason for his hesitancy in taking over at Apple? For all of his
* h% V1 ~9 [2 B# ?2 owillfulness and insatiable desire to control things, Jobs was indecisive and reticent when he: A1 e: e7 z; P% {* ^7 `- S
felt unsure about something. He craved perfection, and he was not always good at figuring
9 O/ `8 v: V/ ?. {& U4 O* nout how to settle for something less. He did not like to wrestle with complexity or make
* c" |3 k; ~& i# b# f9 ?accommodations. This was true in products, design, and furnishings for the house. It was
6 d# Z; x- k0 }) Y) ralso true when it came to personal commitments. If he knew for sure a course of action was8 E% Y; Q# A3 X. M. s) \5 X
right, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to
9 Y7 @0 ? m* {2 Vthink about things that did not perfectly suit him. As happened when Amelio had asked him5 H( c% c! G) b% B
what role he wanted to play, Jobs would go silent and ignore situations that made him, j- Y( [; v. z4 K( ^5 l
uncomfortable.
6 F" r# N. X* H+ x, c0 S$ b& a+ ^: h/ rThis attitude arose partly out of his tendency to see the world in binary terms. A person
- X6 q' y5 P4 Awas either a hero or a bozo, a product was either amazing or shit. But he could be stymied% E _$ ~7 F' |- [
by things that were more complex, shaded, or nuanced: getting married, buying the right5 U' A* |% E \5 ]; _) C, o
sofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I
" w5 D" H2 l6 _think Steve wanted to assess whether Apple could be saved,” Fred Anderson said.- n' Q: v Z, a6 Y0 v' [
Woolard and the board decided to go ahead and fire Amelio, even though Jobs was not
6 ~. V3 W; z. r. w( t8 Cyet forthcoming about how active a role he would play as an advisor. Amelio was about to
5 u: [& | F1 [. n2 V& q( {go on a picnic with his wife, children, and grandchildren when the call came from Woolard! e' m2 d5 @# N- _6 o# t) n1 q
in London. “We need you to step down,” Woolard said simply. Amelio replied that it was% A) a4 f3 @; t7 P( H% ^* Y. H# j
not a good time to discuss this, but Woolard felt he had to persist. “We are going to, Z8 Q. d! \: Y: h* u
announce that we’re replacing you.”& u/ `% B1 P, N8 K
Amelio resisted. “Remember, Ed, I told the board it was going to take three years to get
. A' {' j* R5 p4 Uthis company back on its feet again,” he said. “I’m not even halfway through.”( A" c! j! b7 P0 q4 m1 d! ]
“The board is at the place where we don’t want to discuss it further,” Woolard replied.
: @; a+ q$ ^! k$ I3 OAmelio asked who knew about the decision, and Woolard told him the truth: the rest of the2 F+ B9 y9 V) `/ K/ W- F% H
board plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His
, M' R' r2 Z& g) t8 eview is that you’re a really nice guy, but you don’t know much about the computer: J* u3 y5 i6 N0 ]' o
industry.”
( [, q: K( }! x. f% ]: A# \, W' v“Why in the world would you involve Steve in a decision like this?” Amelio replied,9 W/ b9 z; I0 \5 |2 q; L
getting angry. “Steve is not even a member of the board of directors, so what the hell is he
( J! m: X: d/ m, f2 s) V* ^. ~; @4 E9 d
9 L; Z: I" Z' u" |7 G' r) P3 R! `+ K, Y% a" J/ t. s* z
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1 S0 h# x6 u+ k( O! o9 K$ Q% h% }: D6 ^. V, P
I7 t( ?! a0 Y% |; C* ?0 P+ A F7 L% m9 y% L' |
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doing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to
4 D/ R3 h' i" V7 @8 j$ t6 q# |carry on with the family picnic before telling his wife.
# L. |+ ? ^* s5 L# K( q7 z3 NAt times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t
! y" ~) H7 l& W) rcare one iota what people thought of him; he could cut people off and never care to speak+ _- A2 P- x/ h- F) G9 |+ Q
to them again. Yet sometimes he also felt a compulsion to explain himself. So that evening
& X1 M# `1 m( y% c7 U# v( nAmelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to/ k' F# r5 y7 k& q( z1 P& Q
know, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want
- s6 \0 X: o% ~% }you to know that I had absolutely nothing to do with this turn of events, it was a decision% w3 Y5 h0 J0 J9 c' d h: ?$ A$ a0 C' X
the board made, but they had asked me for advice and counsel.” He told Amelio he! F( U( V, g/ k0 I w
respected him for having “the highest integrity of anyone I’ve ever met,” and went on to
0 {- h D1 x: M. c: k8 m# c2 ?give some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown
- E2 O( M0 ?8 O7 p. U9 mout of Apple, I immediately went back to work, and I regretted it.” He offered to be a1 W1 W: J; x6 s- y& m2 B
sounding board if Amelio ever wanted more advice.
9 Y; i& e+ W* BAmelio was stunned but managed to mumble a few words of thanks. He turned to his
* H" Y8 T- E; K7 u3 W% e% K, twife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”
1 h0 y" z( R# ^3 O5 khe told her.0 a$ ]9 [9 C2 t2 ?% W& v
“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”
0 s K: P: a0 a' N0 a“Join the crowd,” her husband replied.
/ G6 f$ y# g- X" N J2 BSteve Wozniak, who was himself now an informal advisor to the company, was thrilled) c! h2 b, U; r; b
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,
0 o+ D! R8 O2 A; n; N. B& @% J“because whatever you think of Steve, he knows how to get the magic back.” Nor did
8 E" M8 e! [- _/ M$ _. @- ]Jobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil
: u3 M L& D+ K' K" wAmelio meets Steve Jobs, game over.”3 W# m: L3 C) P8 v. K
That Monday Apple’s top employees were summoned to the auditorium. Amelio came in* o5 g+ }+ M! `0 H
looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he
j9 p7 Q3 ~' P( Osaid. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear
+ d S8 Z# O# `4 i" V/ S1 c8 c8 l6 H4 Qthat he would be taking his cues from Jobs. Then, exactly twelve years since he had lost
3 [2 w6 d; q6 t4 \7 ]power in a July 4 weekend struggle, Jobs walked back onstage at Apple.
; l; X2 v7 }- l# pIt immediately became clear that, whether or not he wanted to admit it publicly (or even: C; @2 c- L+ _6 a+ a% i
to himself), Jobs was going to take control and not be a mere advisor. As soon as he came
+ c9 B, [5 T' r8 ~, K; Qonstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work2 j& T0 a3 t7 N# Q1 N
reinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he
4 y/ |; A4 @, P+ v# j4 xsaid. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.. O0 j7 @5 P: G4 E7 l( r
“So what’s wrong with the products?” Again there were a few attempts at an answer, until0 N, U: T3 q) Y. a
Jobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s4 \8 K4 z8 C) Q7 f, p O0 L/ d* S
no sex in them anymore!”- ?2 W% L; H4 b$ ?, \8 O& V; @
Woolard was able to coax Jobs to agree that his role as an advisor would be a very active
& \+ V4 I7 {% e# Zone. Jobs approved a statement saying that he had “agreed to step up my involvement with* z, Q/ `- u! p( [% D& ?4 \
Apple for up to 90 days, helping them until they hire a new CEO.” The clever formulation
8 v/ Y+ K( Z* _0 Fthat Woolard used in his statement was that Jobs was coming back “as an advisor leading
- q$ \8 Q! k. Mthe team.”
5 W, ]( N7 b; l& N3 S8 d# _0 OJobs took a small office next to the boardroom on the executive floor, conspicuously: x3 D# I8 B0 h) _, X
eschewing Amelio’s big corner office. He got involved in all aspects of the business: / U+ g7 i# X: z2 b: w* E* v3 y* O" P; Y
7 o0 S, A2 l( |) A, @
V, u1 n6 k$ H
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product design, where to cut, supplier negotiations, and advertising agency review. He# r9 S/ L: K8 E1 i( Z. f! X
believed that he had to stop the hemorrhaging of top Apple employees, and to do so he
) E1 l- T3 Z- n" v+ i; r# uwanted to reprice their stock options. Apple stock had dropped so low that the options had% O' q4 I; F. _. u0 r. b
become worthless. Jobs wanted to lower the exercise price, so they would be valuable* N0 U4 H/ Z' ?+ C8 Q( \+ h
again. At the time, that was legally permissible, but it was not considered good corporate
+ {7 b- @( R" Y/ Q' ` ?practice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting
5 Y1 M& ^. U5 oand outlined the problem. The directors balked. They asked for time to do a legal and
! {; |6 j+ v, Ifinancial study of what the change would mean. “It has to be done fast,” Jobs told them.
3 T) L" y' I6 o8 `6 W `“We’re losing good people.”. ?! S5 Y# n2 c2 i# P: f
Even his supporter Ed Woolard, who headed the compensation committee, objected. “At
8 @( `" f& r* Q: T( XDuPont we never did such a thing,” he said.
) t2 ]; Q2 {' S; M& O% D4 e# D“You brought me here to fix this thing, and people are the key,” Jobs argued. When the: M7 r2 `4 _6 c8 g- l& I5 j/ Q
board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He$ `1 \" _' Q/ a- e2 b( ?# \
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,
& B- _2 k7 N |: NI’m not coming back on Monday. Because I’ve got thousands of key decisions to make that T4 h5 J6 y7 K4 U- i5 D
are far more difficult than this, and if you can’t throw your support behind this kind of7 ]3 {, r; [, H$ H' {+ v
decision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,
! |3 C2 O1 t- w4 _8 b! V4 S* cyou can say, ‘Steve wasn’t up for the job.’”( A L$ T9 f8 w I$ n( e7 a
The next day, after consulting with the board, Woolard called Jobs back. “We’re going to
* B n# z; S( l0 B( ?( |2 Uapprove this,” he said. “But some of the board members don’t like it. We feel like you’ve% j; t8 I4 t# F D) b2 O2 ]
put a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,9 C, g; d. J0 u7 T! ?, ^1 Q
which was the price of the stock the day Amelio was ousted.
) m7 ~3 e8 n% S- ]+ `3 lInstead of declaring victory and thanking the board, Jobs continued to seethe at having to
8 U, U5 a( u: t6 ^! f! kanswer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told S0 [0 ?# T n, n1 \2 J& `$ U
Woolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I7 X+ X- h, |& @ w/ n& u
need all of you to resign. Or else I’m going to resign and not come back on Monday.” The; P' q P% ]; X7 J8 Y; P* _
one person who could stay, he said, was Woolard.
* }0 n4 N& i& ]0 Q6 m* V7 X2 wMost members of the board were aghast. Jobs was still refusing to commit himself to$ g- M+ I8 t9 ]+ Z+ k0 ~
coming back full-time or being anything more than an advisor, yet he felt he had the power
6 T0 Z# b1 V! a# G; z3 rto force them to leave. The hard truth, however, was that he did have that power over them./ U2 U) V. n: h$ C, a4 }/ @4 J. s
They could not afford for him to storm off in a fury, nor was the prospect of remaining an# @5 _9 s( J* I: F Q
Apple board member very enticing by then. “After all they’d been through, most were glad
0 V7 n ?1 D. U/ ?* r C9 Rto be let off,” Woolard recalled.
) i7 {' w s oOnce again the board acquiesced. It made only one request: Would he permit one other
0 z# @3 h! f0 }" Sdirector to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were5 S: q. ?6 `+ u7 `$ J0 u8 m
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a
' ]! d" l! f. Aguy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.
; i# h0 W+ j4 X3 g4 g5 tWoolard, on the other hand, was one of the best board members I’ve ever seen. He was a
/ T$ L! X0 k9 v6 ]; ]prince, one of the most supportive and wise people I’ve ever met.”" `1 C: ` q, l7 H
Among those being asked to resign was Mike Markkula, who in 1976, as a young
* `1 C, X; n' \* s) `& lventure capitalist, had visited the Jobs garage, fallen in love with the nascent computer on
! z% h; i7 S/ x4 [& }4 {0 Jthe workbench, guaranteed a $250,000 line of credit, and become the third partner and one-6 D j& E, s; h8 {
third owner of the new company. Over the subsequent two decades, he was the one ) a9 a8 C8 e; l: l5 H
4 u5 i7 G8 t- y( ^. h/ p% G N a, Q9 r# G. A' W
8 G. P; a7 K1 a' y5 W7 K R
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% X- U8 |( o) J: c
0 t0 Y8 Y f- ` aconstant on the board, ushering in and out a variety of CEOs. He had supported Jobs at
) L: k8 O) T3 Q! Ktimes but also clashed with him, most notably when he sided with Sculley in the
! w; C t. S8 \: Oshowdowns of 1985. With Jobs returning, he knew that it was time for him to leave.
% l# Q; F( R- H- c$ p* v* x U1 kJobs could be cutting and cold, especially toward people who crossed him, but he could
( Q& y9 s. ], u X! d% Zalso be sentimental about those who had been with him from the early days. Wozniak fell7 o+ {3 \7 Z/ a1 b; ~3 ^
into that favored category, of course, even though they had drifted apart; so did Andy
4 R: I; b; I2 C0 l" YHertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as* X8 J: K0 b. c$ N- z
well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”
W' ?) Q( X$ M4 |5 Y+ [Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs' d0 ?7 x) i/ Y2 b
drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As% j/ u8 C% @4 Q. H$ C
usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a" a" C8 K6 m3 E! F* v; l
picnic table. “He told me he wanted a new board because he wanted to start fresh,”0 N3 G" M; H7 G6 s' m L8 L
Markkula said. “He was worried that I might take it poorly, and he was relieved when I$ R& u4 S# [4 N" h9 K
didn’t.”
' H; @0 U# A" xThey spent the rest of the time talking about where Apple should focus in the future.9 v) m* y+ F4 h) ]$ _4 D
Jobs’s ambition was to build a company that would endure, and he asked Markkula what
1 T3 P+ z: m7 n" }( Tthe formula for that would be. Markkula replied that lasting companies know how to4 z2 O$ k. D1 R7 i0 A1 R" Q
reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument5 ?. w; P" x2 `4 R. e5 m
company, then became a calculator company, then a computer company. “Apple has been: \2 I+ g( t$ d* A# x
sidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the* A" c& F& A! N" k
company to do some other thing, like other consumer products or devices. You’ve got to be
; E j( _- `5 A% V. \2 Alike a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.
( `6 Q. I8 z6 z3 NThe old board met in late July to ratify the transition. Woolard, who was as genteel as
( |2 l/ M; J3 G. } Y( t$ HJobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and
+ a' s6 y0 r" K% Usneakers, and he worried that Jobs might start berating the veteran board members for, V: v: Q. I o5 k3 N
screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the
3 @& Z1 ~2 W @# [8 j. @business of voting to accept the resignations, elect Jobs to the board, and empower Woolard
- g# X0 f* G" e" land Jobs to find new board members.
7 h {4 M1 F0 X; O1 lJobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to" g- g7 }0 S, g t7 n6 ]1 ~
join, but he hated attending meetings. Jobs said it would be fine if he came to only half of
% o4 j( a; \6 p0 c. \0 x' bthem. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture) c8 k$ p9 z2 q# s# x2 J
of him that had appeared on the cover of Business Week and had it blown up to life size and
: r6 b' s8 S4 q) apasted on a cardboard cutout to put in his chair.)
% d, ^% Q7 ~* q2 MJobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s
) v# g, |% b" ^: C: Q" kand been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking- k) j6 u, d& H+ I; S( u% l
with Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was: l1 x" [4 h [5 M* N
the CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his1 U2 q, ?* m# s; W7 ^
house,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said1 C$ ~5 E+ K9 F
he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will' [1 W) `, m. S! z7 n0 g
do that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,5 A' \# H* a6 e0 y
was to “get A performances out of B players.” At Apple, Jobs told him, he would get to
3 ^0 U7 l! i6 I6 v8 f0 A+ ]work with A players.
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+ y% P/ L |8 J3 y% N# z+ ^
$ ^1 [8 |* I& l" w1 b) r& _
; L: I6 d0 W, A/ aWoolard helped bring in Jerry York, who had been the chief financial officer at Chrysler% h- b; Y. C9 s- I
and then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,4 G1 E* F( x! a% V: z
who was then the manager of Hasbro’s Playskool division and had been a strategic planner. O6 Q8 U0 Z& o( m! m& y I3 r
at Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor; ^! q5 w) G" f* d% ~
of California.) Over the years Jobs would bring in some strong leaders to serve on the
* D/ f* D$ N& ]2 @) Z5 C; d/ Y: `$ OApple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,
Q! n) O3 Q! d+ i2 Q! l/ bMickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made
+ ^$ \& K! A2 _6 X% I/ S: [sure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times0 _9 r5 `( E2 o8 ^/ N
awed or intimidated by Jobs, and they were eager to keep him happy.4 i6 k( Z: @$ R* ?* }+ I$ D
At one point he invited Arthur Levitt, the former SEC chairman, to become a board$ p$ V1 i4 p( }( x* @$ c
member. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to4 D) f, J! l) r- ~1 y/ u
Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
0 y- u2 N. w8 F2 X) _7 O+ mrole with Jobs. But then Jobs read a speech Levitt had given about corporate governance,+ H( R2 `; f( [4 m4 W1 I
which argued that boards should play a strong and independent role, and he telephoned to
. Y: C$ e, m ~ h+ n6 ^, B! Hwithdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it# @. S+ |9 Y5 z& }
best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues
# S- K1 j7 M# S8 o, c$ Kyou raised, while appropriate for some companies, really don’t apply to Apple’s culture.”
3 a% A/ l6 |. e1 n- `3 q4 [Levitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to7 ~- A- U6 ~. y
act independently of the CEO.”7 M: i2 v. y4 E
+ E! ?9 Z) x& N1 m' q- R" hMacworld Boston, August 1997
+ O2 Q8 l" m9 @" X; P' _/ o' T: r" s# M) |0 q; {) N' _, l: \
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and9 ~! p$ P( |3 x9 s
the executive team,” and it soon became public that he was running all of the company’s
# }; v, S( ~" m' u5 }product review meetings. These and other indications that Jobs was now deeply engaged at% q3 Q3 U" j0 Y" G4 q
Apple helped push the stock up from about $13 to $20 during July. It also created a frisson
, U7 z* Y7 x, D" `of excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.
* [4 N8 i e/ \$ I% d% ~2 I. TMore than five thousand showed up hours in advance to cram into the Castle convention7 H/ }( H, t" u& P- X
hall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning
- `" s$ `$ z( |* V5 M! M! E! K4 jhero—and to find out whether he was really ready to lead them again.
7 ]. ^% C9 z3 }9 ` K6 m$ g. zHuge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
2 _! G) Z2 w3 Jscreen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being
+ h* q: a; m/ \: b* ?6 Vintroduced. When he finally strode onstage—wearing a black vest, collarless white shirt,
' p, C9 P6 F3 ^0 Njeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At7 r7 i, w5 \$ [% q
first he punctured the excitement by reminding them of where he officially worked. “I’m
. }9 L: E8 \9 p4 v6 Q4 B8 |9 uSteve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide9 b) y* @) m u7 Z) S0 {- `: d- w
onscreen with that title. Then he explained his role at Apple. “I, like a lot of other people," h0 J8 e5 x3 l6 N5 X8 R* }0 F9 u
are pulling together to help Apple get healthy again.”
+ m- y' ?( N1 D& u5 S* L: pBut as Jobs paced back and forth across the stage, changing the overhead slides with a& n' F; F8 k( m: a `1 D9 F5 Z6 C
clicker in his hand, it was clear that he was now in charge at Apple—and was likely to6 W3 g3 s2 z @0 P/ o! @
remain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s
; V, m' g" ]# V) n2 F" Q' c# I& X: jsales had fallen by 30% over the previous two years. “There are a lot of great people at
2 U# \. u# U' [! HApple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve
& ]( d# Z3 g7 n7 `, I& d" y2 X2 R9 V
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$ A; L; b0 h3 [. _: i
2 Z6 Q3 v, p8 U% h" w( ~8 a5 Z C/ Q1 R' y4 V/ z& u' ~; t- D
0 \4 Y. e6 Z. u% [
* x4 u+ q5 @) M
; S3 ?0 M- k4 {! l
/ x u0 N9 L, t( X/ O# w& Mfound people who can’t wait to fall into line behind a good strategy, but there just hasn’t8 K C" L& [ N1 J6 Y
been one.” The crowd again erupted in yelps, whistles, and cheers.' E+ a& M* i0 a8 K3 Y
As he spoke, his passion poured forth with increasing intensity, and he began saying' \4 o, V+ v( l' C; D C% u+ F
“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think
5 f6 o8 `1 _7 G# F0 \! |you still have to think differently to buy an Apple computer,” he said. “The people who buy
7 L! F N- p" F% Q, gthem do think different. They are the creative spirits in this world, and they’re out to
9 g* c) }5 z, w! J5 uchange the world. We make tools for those kinds of people.” When he stressed the word
3 a7 E; z5 m4 M5 m“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in
0 J, @+ k7 n. T5 f8 Z- b/ Mhis final peroration, he continued to stress the word “we” as he talked about Apple’s future.
0 O- |3 f. Z) x4 b+ O s“We too are going to think differently and serve the people who have been buying our* _6 n2 e. m2 `$ F
products from the beginning. Because a lot of people think they’re crazy, but in that
) r: E* |. t2 y4 }! ?6 ]craziness we see genius.” During the prolonged standing ovation, people looked at each# L# ?% B" k. ]4 \6 R4 s
other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and% O4 T3 r" |* |3 P8 D. I& Z( M" w
the “we” of Apple were one.9 d0 z! T5 Y* H% ~9 X
W$ R( C: l0 I9 h# q
The Microsoft Pact
p$ z4 V% M, z( D+ p# e3 B3 b' @' g3 S E( O7 _% t) k' F
The climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,8 x; l) e: Y# s
one that made the cover of both Time and Newsweek. Near the end of his speech, he paused. J% r: [# v* B" R! n5 S9 E! y
for a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”
4 M* L5 T- G. M+ U+ H1 @1 W& T3 U3 j7 qhe said. “It needs help from other partners. Relationships that are destructive don’t help
7 N3 K! A, Q# ^0 t7 V" uanybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d4 k4 ]1 I6 q/ ]$ X3 t
like to announce one of our first new partnerships today, a very meaningful one, and that is
8 i% K, x) ^- O# V0 I& Done with Microsoft.” The Microsoft and Apple logos appeared together on the screen as4 ]$ h7 b) R. x
people gasped.0 ^+ h: R$ D( M7 Z X
Apple and Microsoft had been at war for a decade over a variety of copyright and patent
5 d8 k7 z$ w. ?9 J0 Missues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical: S. u' @2 U1 j$ P% `/ p" [
user interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a
- ?6 Z% o" _! {* f% J9 {! }surrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it
/ O) K* C# Z: [8 o, jwould make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came
$ j, f1 n) C) N- ^, e$ P+ Hout with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to
; W- E! s9 m9 A( |Windows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s
5 J' M# D. |: c! o8 f" N5 b% Btrick of “clipping” overlapping windows) had made the infringement more blatant. By 1997
' M; J/ s3 p$ }$ ]& Z! cApple had lost the case and various appeals, but remnants of the litigation and threats of
* @8 K3 m7 a5 H3 y1 V4 Lnew suits lingered. In addition, President Clinton’s Justice Department was preparing a
0 u" r( t$ Z/ kmassive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to
% r1 V. h/ Y- gPalo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him. p8 l/ I# r" e
over coffee. Instead simply keep them tied up in litigation. That would allow Apple the
7 A! c3 a& d% Q, Topportunity, Jobs explained, to “make an end run” around Microsoft and start offering& S# d, Q4 V8 s+ s s3 `
competing products.
" z. ^1 o0 V# FUnder Amelio, the showdown had become explosive. Microsoft refused to commit to6 m" k$ c% Y- I# k) u
developing Word and Excel for future Macintosh operating systems, which could have
, k$ o8 j: h3 F: @. {destroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was
% q% ?. E9 j0 i( R0 p; o3 h' q% i# Y- R" a- T
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1 \) |6 d7 I) X2 {% U
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; u7 d/ ~% B! E' ~
. \( }5 \8 p! _0 z+ s% T# i* G5 G L
. L# x% y: V. f! u2 _! Dunderstandable that he was reluctant to commit to developing for a future Macintosh! Z/ Z. r \. ]3 D+ C' Q
operating system when no one, including the ever-changing leadership at Apple, seemed to
) A# O! r4 w. g7 s! e0 w, Kknow what that new operating system would be. Right after Apple bought NeXT, Amelio
. @9 p4 T: t+ s3 J! P. Dand Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them$ D; N' G# E' F+ X! m, j9 j
was in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I H% a* N7 {, D) ~( T" q
supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by
/ v8 ^/ o" v- F; Y“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation
3 `+ f% J% A' F7 J9 zwould soon be clarified.+ C \+ ~/ j. ~# p
When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first/ C/ G( d q+ b, n
phone calls was to Gates. Jobs recalled:2 `: a! P0 `. t
I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft6 M: J% Q* E1 R% E+ ^" f7 \5 y% B, N
spot for Apple. We got him into the application software business. The first Microsoft apps, L( f% v; O( _, J- W/ ^/ q
were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was: e1 S _6 h, }: M# c( l1 q* X
walking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we
& h3 j" P4 X; e) ~could win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to
4 L- C; e H& B: ]survive that long if we’re at war. I know that. So let’s figure out how to settle this right l. r- i& v r9 H- Z
away. All I need is a commitment that Microsoft will keep developing for the Mac and an
[/ R7 r# [9 b% x! M- E# minvestment by Microsoft in Apple so it has a stake in our success.”8 c3 l- X8 P1 M5 r
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+ r) U: _4 K6 A
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. W s8 `+ n' c: {8 f q( ^When I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of a& l1 [) T7 o5 J0 Y; N# `& N
people who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had
+ d- i" b1 I+ ^$ C$ @been negotiating with Amelio for six months, and the proposals kept getting longer and
; {. j% b! k% S7 M1 a' zmore complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I
% e9 P3 x/ _% w6 t) }' qwant is a simple deal. I want the commitment and I want an investment.’ And so we put6 C8 P$ l7 t5 P" h% f L
that together in just four weeks.”' W8 b1 W* Y# U
Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out0 J3 K8 F, p: R! ]
the framework for a deal, and then Maffei returned alone the following Sunday to work on7 @+ G2 [6 L3 m3 x$ j; e" J$ a( x
the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the0 \; e, q, i7 c6 Z3 _8 M
refrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore# b2 T$ i+ X* o/ [( j6 W
shorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the
+ Q( P' n8 U4 v& u- @/ [ T7 ~core issues. “These are the things we care about,” he said. “A commitment to make5 ^* X6 ?+ _; ^8 [: V) {
software for the Mac and an investment.”1 H2 \( o c3 V) t& {/ Q
Although the negotiations went quickly, the final details were not finished until hours' R) l; e- b1 u$ `- x1 \: N
before Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when+ s1 s9 A5 }7 a
his cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he
L1 C6 Z7 o+ Twalked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour./ D6 S# h/ |) z7 b. p' \9 D, |
Finally, the remaining deal points were resolved. “Bill, thank you for your support of this
5 `, e$ l6 i- o5 A# Dcompany,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”
- h1 Z0 ~& Z1 X5 ZDuring his Macworld keynote address, Jobs walked through the details of the Microsoft$ k1 e' S0 G( R' S
deal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s
6 ~0 w/ C% c! |7 p) Dannouncement that, as part of the peace pact, “Apple has decided to make Internet Explorer 0 O7 w ]( W+ e- C4 f( t6 X
( y, B5 m2 u$ d
9 ~8 K. y7 o/ n& D1 n) k& K9 |# A7 H& n- W: j7 M3 y
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8 G4 w5 g- W: R$ [! d2 T
K% C) b7 K7 y& ]- Fits default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly z) e: i s/ Q, b9 Q% L6 x. C
added, “Since we believe in choice, we’re going to be shipping other Internet browsers, as% j+ x5 Z+ A7 j4 }) [# h* t
well, and the user can, of course, change their default should they choose to.” There were) \ O) H% v- f( v/ S9 z
some laughs and scattered applause. The audience was beginning to come around,
: x7 [; W. k0 Yespecially when he announced that Microsoft would be investing $150 million in Apple and
+ H1 h" j4 g3 vgetting nonvoting shares.3 d2 Y4 S6 L4 @$ X
But the mellower mood was shattered for a moment when Jobs made one of the few& R: X Z- y! T& T( Q3 W
visual and public relations gaffes of his onstage career. “I happen to have a special guest
! y- F: L& t% \$ a3 Y2 wwith me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on
' c9 l; _8 D, O5 N, Othe huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s
0 j: W0 G: t3 g7 eface that flirted with being a smirk. The audience gasped in horror, followed by some boos7 o' [6 m; W% d" m
and catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half
4 j, f/ m( o! T0 k8 b2 y$ `* nexpected (and hoped?) that an athletic woman would suddenly come running down the3 f {2 y; L( w' ]
aisle and vaporize the screenshot with a well-thrown hammer.
6 ?1 n6 g" u ~# @* aBut it was all for real, and Gates, unaware of the jeering, began speaking on the satellite2 o; v! U0 U- V* x1 s5 X; E+ b
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my+ Q9 Y0 w% n2 p. h- y7 p- q
career has been the work that I’ve done with Steve on the Macintosh,” he intoned in his0 s; T0 ]; x6 k: ?9 k0 g/ ^% i: x( z
high-pitched singsong. As he went on to tout the new version of Microsoft Office that was8 e# x; s, I$ I( j5 w+ y
being made for the Macintosh, the audience quieted down and then slowly seemed to1 Q0 C! e7 p/ n+ f8 B8 j5 t+ T
accept the new world order. Gates even was able to rouse some applause when he said that0 N$ ^& s' F3 w `) d% s5 ~6 i
the new Mac versions of Word and Excel would be “in many ways more advanced than7 J! c2 l4 l1 t9 s: ^2 l
what we’ve done on the Windows platform.”
0 \5 [1 J4 I8 h$ e: k5 X/ [Jobs realized that the image of Gates looming over him and the audience was a mistake.7 z" i8 k6 i* _1 o$ g
“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest
5 L' W6 A, T0 {staging event ever. It was bad because it made me look small, and Apple look small, and as
6 X7 ?6 Z0 t3 \6 ? Iif everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the
. O% Y8 I1 ^' p' [: {videotape of the event. “I didn’t know that my face was going to be blown up to looming
7 t P7 B& q9 Z$ I3 `8 vproportions,” he said.
' V5 t. t* _2 A5 GJobs tried to reassure the audience with an impromptu sermon. “If we want to move
2 q+ U+ Q' u+ R+ i# O7 Q" B* o4 Q- F' tforward and see Apple healthy again, we have to let go of a few things here,” he told the; d/ B$ s% K: Q' j, B& l& F( g
audience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
9 `: T' A( f* E7 j+ W6 Athink if we want Microsoft Office on the Mac, we better treat the company that puts it out+ u. {( _2 }/ o' D' J
with a little bit of gratitude.”1 P. E6 O* U' O, x
The Microsoft announcement, along with Jobs’s passionate reengagement with the
: ^0 H9 Q1 r9 G2 Xcompany, provided a much-needed jolt for Apple. By the end of the day, its stock had
1 {. n# d* M1 p$ `1 oskyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned.! u% u4 b, ?* e% w; b7 }/ y& I
The one-day jump added $830 million to Apple’s stock market capitalization. The company
4 H4 F A3 @9 C( f1 h1 Gwas back from the edge of the grave.( _/ ^1 A! N2 }, D$ C
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, y$ w& G' k, A9 nCHAPTER TWENTY-FIVE 2 h/ `4 V, X% |0 l# R+ W) b( Q1 m
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