Welcome to the 240th insertion of DEMUR®, an analytical series highlighting the intricacies of the artistic world and the minutiae lying within. In this episode, we study the intricate relationship between the world’s largest tech rivals, explaining how Bill Gates saved Apple from bankruptcy, won two lawsuits, and obtained more free capital than the United States government.
The year was 1997, and Apple was making a b-line for bankruptcy. Having suffered $1 billion in losses over the course of a year, the start-up had just released their first commercial failure, a hand-held device known as the ‘Newton,’ and intermittently fired their CEO, Steve Jobs. As stock prices plummeted to a measly $4, Microsoft’s ‘Windows 95’ began to outcompete Apple’s ‘System 7’ drastically, creating a grim future for the small firm.
Piquing a young Bill Gates’ interest, who was both the kingpin of a $100 billion empire and the target of an antitrust lawsuit, he got on the phone with the newly appointed Steve Jobs to offer a deal. Gates was aware of the dire situation and presented Apple with a $150 million non-voting stock purchase. In addition, he also committed to continuing to develop cross-platform software like Microsoft Office for at least 5 years.
Making headlines, Microsoft would acquire 150,000 shares of stock on August 6th, 1997, stabilizing Apple’s finances. Following the sale, Jobs was quoted on the cover of Time Magazine stating, “Bill, thank you. The world’s a better place.” and virtually appeared during the Macworld, 1997 announcement. However, the move wasn’t without backlash or personal interest, as fans cheered and booed from the crowd.
But why would Gates help a direct competitor? At the time, the US Department of Justice had filed an antitrust lawsuit against Microsoft, claiming the company had engaged in “anticompetitive practices to maintain a monopoly.” Gates thought the interjection would clean their slate by showing how selfless Microsoft was while simultaneously ridding of competitive browsers like Netscape as Mac made Internet Explorer the default browser. Still, the effort ultimately failed as Microsoft was found guilty.
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