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February 16, 1999


By CBR Staff Writer

By Rachel Chalmers

Will the Walt Disney company buy Pixar Inc and Apple Computer Inc and make Steve Jobs Michael Eisner’s heir apparent? A web site called AppleInsider has published extensive details on the rumor, which it says it gathered from a trusted source. Pixar’s outstanding success is due in no small part to its marketing alliance with Disney, as Jobs is the first to admit. I have never seen a partnership where both teams work together so effectively and enjoy it so much, he told shareholders in Pixar’s 1998 annual report. That partnership began as an agreement on interactive CDs and was quickly extended to cover a five-picture deal. Pixar’s most recent feature, A Bug’s Life, a tremendous critical and commercial success, is the first fruit of that deal. Disney has also partnered with Apple in the past, authoring content for the Mac platform in the lean years of 1996 and 1997 – a time when the Cupertino company’s oldest friends, notably Adobe, couldn’t shake it off quickly enough (CI No 3,106). Hardcore geeks also note that the Smalltalk implementation project, Squeak, which started out at Apple, now sports mouse ears and continues under the auspices of Walt Disney Imagineering. In summary, Disney loves Pixar, and in spite of the difference in their respective businesses has worked closely with Apple in the past. Could Jobs now use Pixar as a lever to convince Disney that what it really needs is a resurgent computer company? Let’s not forget that this is the man who sold his second startup, NeXT, back to Apple, his first – and used the opportunity to reinstate himself as interim CEO. Though NeXT’s software is not much in evidence in Apple’s new product plans, Job’s influence is everywhere. Is it so much of a stretch to imagine him repeating that coup on a grander scale? Using the same powers of persuasion that led Apple to buy NeXT, Jobs was reportedly able to convince his longtime friend, Eisner, and the rest of Disney’s board to consider a buyout of Pixar, AppleInsider claims. The source told AppleInsider that Jobs then sold Apple by presenting it as the key to developing cutting- edge technology for the masses, leveraging Apple’s experience with QuickTime and its newly re-established strength in the consumer market.

Mega-merger imminent?

AppleInsider predicted an announcement by the end of the week of a mega-merger that will leave Pixar and Apple as independent divisions within Disney, while making Jobs CEO of the combined company, effective June 7 1999. If this came to pass, Eisner would step aside from his duties as chief executive but would remain on board as chairman. Sources say the deal would be accomplished in a stock swap worth around $12bn, with no cash changing hands. Apple and Pixar shareholders would receive Disney stock. Jobs in particular may stand to gain as much as $5bn worth of Disney shares – plus an amusing new job. In support of its claims, AppleInsider offers the fact that Jobs and many members of the Apple executive team have spent most of the last two weeks at Disney HQ in Burbank, California. Against that, skeptical observers will weigh the fact the an Apple takeover is one of the most reliable pieces of gossip on the Silicon Valley rumor mill, returning every six to twelve months like migratory geese. Disney’s been named as a candidate before, most recently in March 1998 (CI No 3,364). Before that the usual suspect was Sun Microsystems Inc (CI No 2,836), though companies as unlikely as Philips Electronics NV have also been identified as buyers (CI No 2,836). This time, however, things won’t stay up in the air for long. A Disney shareholder meeting is due on February 23, and Jobs is giving the keynote at MacWorld Tokyo tonight (Wednesday February 17).

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