1997: Microsoft Saves Apple
Fifteen years ago, Steve Jobs announced at the Boston Macworld Expo that Microsoft was making a $150 million investment in Apple Computer, cash Apple desperately needed to remain afloat - along with a promise that Microsoft would continue to develop Office and Internet Explorer for Mac for at least five years, an assurance that helped Macs grow in the workplace.
In exchange for the investment, Apple would drop its suit against Microsoft alleging that Windows copied the look-and-feel of the Mac OS, and new Macs would ship with Microsoft Internet Explorer as their default browser, replacing Netscape. Apple also protected itself by selling Microsoft nonvoting shares.
What really shocked the Mac faithful was that Jobs made the announcement during his keynote address and had Bill Gates in a video feed on the huge screen behind him, which you can view on YouTube. Listen for the audible reactions, especially the boos when Jobs announces IE as the default browser and the mixed response when Gates appeared on the screen.
Microsoft has long been one of Apple's frenemies. The Apple II didn't really take off until Apple licensed Microsoft BASIC and released the Apple II+ with AppleSoft BASIC. Microsoft Word and MultiPlan, the predecessor of Excel, were essential in getting the Macintosh off the ground in 1984. And by working to make Microsoft Office files work across platforms, Microsoft made it easier for Macs to coexist in the mostly Windows workplace.
Back in 1997, IE was duking it out with Netscape Navigator. IE was at version 3.0, with 4.0 a couple months away on Windows and destined to reach Macs in January 1998. Netscape was at version 4.0 and beginning to run out of steam, although it would eventually be reborn as Firefox and become IE's primary competitor until Google got into the browsing game.
Microsoft was good on its word, and to this day continues to develop Microsoft Office for Macs. Internet Explorer didn't fare as well. IE for Mac made it to version 5.x in 2001, but after Apple released it's own browser, Safari, in 2003, making it the Mac's default, and Microsoft officially ended further development and support in 2005.
Nobody knows just how much Microsoft made from its $150 billion investment, but I'm sure it did well. Two years ago, Ars Technica reported that had Microsoft held onto those shares, they would have been worth $4.5 billion.
It's a good thing Microsoft has found its relationship with Apple and Mac users so profitable, because ever since 1997, when Microsoft and Apple compete in the same space, Microsoft loses. Zune was never able to compete with the iPod. Microsoft's two failed DRM music initiatives paled in the face of the successful iTunes Store. Ever since the iPhone arrived, Microsoft's mobile operating system has been declining in market share. And in the tablet market, it looks like Microsoft's Surface is going to be a lot more expensive than the iPad, although Microsoft is very hush-hush about pricing and technical specifications.
Thanks, Microsoft, for bailing out Apple in its darkest hour. Maybe Apple will return the favor someday.
- Microsoft to Invest $150 Million in Apple, Cnet, 8/6/1997
- Aug. 6, 1997: Apple Rescued - by Microsoft, Wired, 8/6/2009
- Apple Stock Rise Could Have Meant $4.5 Billion for Microsoft, Ars Technica, 5/27/2010
- Microsoft-Apple Collaboration, the 10 Greatest Moments: #4, Microsoft Invests $150 Million in Apple, Tech Republic, 10/29/2010
Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.
Recent articles by Dan Knight
- The Late 2012 iMac Value Equation, 2012.10.31. Thinner, lighter, faster, USB 3, improved graphics, Fusion Drive option, and no SuperDrive sum up the new iMacs.
- The 13" Retina MacBook Pro Value Equation, 2012.10.30. Take the 13" MacBook Pro, add a Retina Display, remove the SuperDrive, and drop almost a pound from its weight.
- The Late 2012 Mac mini Value Equation, 2012.10.29. The entry-level Mac mini is a nice step up, but the top-end quad-core model is a powerhouse.
- More in the Mac Musings index.
Links for the Day
- Mac of the Day: PowerBook 165c, introduced 1993.02.10. The first color PowerBook had an attractive screen, slow graphics.
- May 25 in LEM history: 99: OS X and the econoMac - iMac iMpact - 00: Is a Mac better than a PC? - 01: 1993: PowerBook vs. ThinkPad - Old files on a new Mac - 05: Mac minis in classroom a big hit - Of mice and keyboards - 06: The best 'Book for my needs - 07: More RAM vs. matched RAM - Running OS X from flash memory
- Support Low End Mac
Recent Content on Low End Mac
- World Book Encyclopedia 2012 DVD, Tommy Thomas, Reviews, 2013.03.05. "You may be asking yourself, in an age of Wikipedia and instant information, is World Book still relevant?"
- Vintage Computer Festival SouthEast, April 20-21, 2013, Simon Royal, Mac Spectrum, 2013.02.25. Old Apple gear and old PCs.
- iMessage: The Ultimate Messaging Service?, Simon Royal, Mac Spectrum, 2013.02.21. In most ways, Apple's iMessage is far superior to BlackBerry Messenger.
- More links in our archive.
- Best Mac mini Deals
- Best 13" MacBook Pro Deals
- Best Intel iMac Deals
- Best iPod touch Deals
- Best iPhone Deals
- Best iPod nano Deals
- Best iPod classic Deals
- Best Apple TV Prices
- More deals in our archive.
Low End Mac Reader Specials
Cult of Mac
Shrine of Apple
The Mac Observer
Accelerate Your Mac
The Vintage Mac Museum
Mac Driver Museum
System 6 Heaven
System 7 Today
the pickle's Low-End Mac FAQ