November 22, 2019
How Microsoft Saved Apple (And Why They Did It)

How Microsoft Saved Apple (And Why They Did It)


Apple: hands down the most successful American
company. Between the ubiquity of their devices and
the almost fanatical loyalty of their customers, it should come as no surprise that Apple recently
became the first trillion-dollar company listed on the American stock market. And yet, just twenty years ago Apple was on
the verge of bankruptcy and it wasn’t Steve Jobs that saved them, but rather their greatest
rival at the time, Microsoft. This video is brought to you by Dashlane. Never forget your passwords again by registering
with the link in the description. The Apple of 1997 was a very different company. It wasn’t selling smartphones, they weren’t
even invented yet, but what they were selling was computers. Back then Apple was a computer company and
that was even reflected in their name, but by all accounts it was a company in decline. Apple’s computers were simply too expensive
to be massively popular. They did have good margins, but their market
share was abysmal. You see, Apple refused to license its operating
system to other companies, which had no choice but to go to the only other player in town,
Microsoft. Now, keep in mind back in the 1990s the vast
majority of computers were used for commercial purposes. Their main value was the software they had,
and if your computer didn’t have the necessary programs developed for it, well then it was
effectively useless for big companies. In 1997 Microsoft had a staggering 90% market
share, and unsurprisingly almost all the software that was being developed at the time was made
for Windows. Every software developer had to make a choice:
he could spend only as much money as necessary to create programs for Windows, or throw almost
twice as much to also support Apple, which had less than 10% market share. It’s also worth noting that throughout this
period Steve Jobs wasn’t even part of the company: the Apple board of directors had
forced him out in 1985. But in 1997 the situation was truly desperate:
sales were declining rapidly and after a series of unsuccessful CEOs, the Apple board actually
brought Steve back. In February they acquired Next, the company
Steve had started after leaving Apple. But by that point Apple’s finances were
in such bad shape that Steve Jobs didn’t actually receive cash for this purchase; instead
he received Apple shares, specifically 1.5 million of them. But even that wasn’t enough. By the end of July Apple had less than 90
days worth of cash left in the bank. Apple was worth less than $3 billion and had
lost over a billion in a single year. But then, on the 6th of August 1997, Steve
Jobs made an announcement that shocked the world. I’d like to announce one of our first partnerships
today, a very very meaningful one, and that is one with Microsoft. You probably noticed that the crowd’s response
was hesitant: they just could not comprehend how Apple could possibly partner with their
biggest competitor, who was driving them out of business. As the announcement progressed, things got
worse. Next, we have taken a look at browsers out
there and Apple has decided … Apple has decided to make Internet Explorer its default
browser on the Macintosh. Since we believe in choice. The speech was sounding like a surrender statement. And lastly, Microsoft is making an investment
in Apple. Microsoft is buying $150 million worth of
Apple stock at market price. It is non-voting shares. Notice the keyword here: non-voting. Microsoft wasn’t trying to acquire Apple,
instead it was just funding it. But it wasn’t just cash that Bill Gates
was offering. The second part of this is Microsoft is committing
to release Microsoft Office on Macintosh for the next five years. The issue with software I mentioned earlier
that was basically bringing Apple down, was being solved by Bill Gates single-handedly. No one would ever purchase an Apple computer
without Microsoft Office on it and here is Bill Gates giving it away for shares at market
price, which he could have just purchased off of the market. So why did Bill Gates do it? Why save Apple on the eve of what would’ve
been their death at the hands of Microsoft? Well, as you probably guessed, Bill Gates
wasn’t doing this out of the kindness of his heart. In fact, back then Bill Gates had a rather
negative reputation. He wasn’t really into philanthropy yet;
instead, he was seen as a cutthroat businessman willing to do anything to succeed in his industry. And by all accounts Microsoft was successful;
so successful in fact, that it was attracting the attention of antitrust regulators. The Department of Justice had been preparing
its case against Microsoft since 1993, and obviously Bill didn’t want his company broken
up, so what better way to show that Microsoft isn’t a monopoly than by literally propping
up his competition. Less than a year after the Apple partnership,
the DOJ summoned Bill Gates for a painstaking three-day-long deposition. By the way, you can tell a lot about someone
based on how they act during these things. Did you ever have any discussions with any
representative of Real Networks concerning what products Real Networks should or should
not offer or distribute? No. Notice how long he takes before giving an
answer, carefully considering how his responses could be used against him. A program designed to assist in the performance
of a specific task, such as word processing, accounting or inventory management. I’d say it’s a pretty vague definition. Is it accurate as far as it goes? I’d say it’s vague but accurate. Throughout the deposition he’d attack definitions
and remain as vague as possible because he knew that by saving Apple a year earlier he
had really saved Microsoft. The DOJ, of course, eventually gave up and
in 2001 cleared Microsoft with minimal punishments. And as to what happened with the Apple shares
Microsoft had, well, Bill Gates got rid of them as soon as they had served their purpose. Once the Department of Justice had settled
with Microsoft, Bill Gates converted his preferential, non-voting Apple shares into regular stock. In total he ended up with 18.2 million shares
of Apple, which he sold in 2003. Now, keep in mind this was after the dot-com
bubble had crashed and in 2003 Apple’s stock price was still extremely low compared to
its pre-bubble heights. So just how much money did Bill Gates miss
out on? Well, Apple has been performing so well since
2003 that its stock has split twice in that time, once at a 2:1 ratio in 2005 and a second
time at a 7:1 ratio in 2014. Thus the 18.2 million shares then would be
254 million today. As of August 2018 Apple’s stock price is
roughly $210 a piece, which would make Microsoft’s former stake be worth $53.5 billion today. So yeah, Bill Gates might have missed out
on a few billion dollars, but hey at least he doesn’t have to worry about remembering
all his passwords thanks to services like Dashlane. Dashlane makes managing passwords a breeze:
it generates strong passwords, stores them safely across all of your devices and automatically
fills them in wherever you need them. Dashlane is so convenient and secure that
honestly I wouldn’t be surprised if Bill Gates himself has it installed on his computer. The beautify of Dashlane is its versatility:
it’s available on every popular desktop and mobile device and integrates flawlessly
with every browser. And it’s not just a password service: it
actively protects you by offering a VPN for every one of your devices, and it also monitors
the Dark Web to make sure your data hasn’t been leaked by hackers. The full range of Dashlane’s service will
make your digital life much easier and much safer, and to help you get a taste of their
amazing features, I’m giving you a free trial of Dashlane and 10% off their premium
service if register using the link in the description. Anyway, thanks for watching. Make sure to like, subscribe, leave a comment,
check out my Patreon, check out my Skillshare class and register for Dashlane and I think
that’s it. You’ll be hearing again from me in about
two weeks, and until then, stay smart.

100 thoughts on “How Microsoft Saved Apple (And Why They Did It)

  1. Hope you enjoyed the video folks! In case you (somehow) missed it, I recently published my first class on Skillshare. It's an animated intro on how the stock market work; people loved it and I'm actually working on a second class as we speak. But for now if you want to watch it (and don't have a Skillshare account) you can get a free trial here: https://skl.sh/2tvZAHg

  2. microsoft office is a bless for office workers around the globe.. apple should be thankful for that..

  3. the people in the audience are so annoying. he's fucking strategising and theyre just shouting boooooo without understanding anything. sheeps

  4. now i have a better understanding of this; microsoft was scared the government USA was going to break up the company as monopoley and they would of thats why bill gates wrote them a check so it was not completely altruistic not completely

  5. Oh wow Billy boy could have been even richer than he is now lol he probably doesn't even regret selling those Apple stocks.

  6. It was not done for altruistic reasons, or because Bill had a secret bromance with the late Steve Jobs. Or that Bill is just a nice regular guy- and is really just like us. It was done for sound business reasons. MICROSOFT needs a credible rival "competitor"(APPLE), lest it begins to have the odor of a "monopoly" , and so may become vulnerable to government investigation, oversight and (gasp!) anti-trust regulation. BIG BUSINESS HATES REGULATIONS from the "guvamint". Its a symbiotic relatationship. They both "need" each other.

  7. Leavin out many facts such as the userfriendliness of mac that was ages (10 yr)ahead of microsoft and btw. There was a dtp called ready set go that easily would accept drag and drop plus processing more than fifty pages of text and graphics and what have you…….at the same time of age microsoft office would eventually crash and remain unfound if you proceeded to a third page of text ….that’s what was lads.

  8. Apple was not on death's door in 1997. Apple couldn't continue on it path for the next couple years without some fundamental change, but it had lots of cash, over $3 billion in the bank or even more. It had way more than a 3 months supply of cash. Apple just couldn't continue its business model, nor they could have screw ups like Newton or Pippin, and expect to survive in the early 2000s. Apple did have OS X, which was in development before Jobs took over in 1997. They also had Jobs, who acted like Chainsaw Al Dunlap, and cut projects left and right, (besides cutting off any charity donations by Apple) How Jobs pushed the iMac, was brilliant, and it helped saved Apple..

  9. I honestly don't think Bill Gates cares that he didn't get any Apple stock. He already has more money than he'll ever need lol

  10. the lowest scumbag looser theif on the planet, @ should be in jail for everything from operating a technology theft ring, to murder, to bribery, to paying for murder, to framing the real owners of technology he has stolen, to securities fraud, to laundering stolen technology through public companies, to plaigerism, to treason, all the way down testing dangerous drugs on living people.

    The scumbag moron @ is dammed eternally

    just think about it, in the operating division of microsoft billgates ripped off jobs and wazniak and in the entertainment division of microsoft its all my Intellectual p[roperty.

    billgates the scumbag belongs in jail, the dumbest looser on the planet is bill gates, everything about bill gates is fake and phony, i can tell you billgates I.Q is below 100, bill gates is a dumb ass.

    and thats @ @ (The real owner of the stolen technology) @

  11. yep I remember in the 90s when I was in elementary school, the computer room had majority apples and a few Microsoft and all the kids would fight to use Microsoft. then apple became cool. I myself have owned >10 apple devices over the years but currently use windows. why? Microsoft excel because of work. funny, huh?

  12. I like the videos on this channel. Anyone knows which software can produce similar effects on photos like these videos?

  13. Maybe the reason why Microsoft invested in Apple is more complicated than shown in this video. Dont try to over simplify it folks

  14. This is bullshit. The way they treated such a genius like him. Washington is corrupt and should be kissing his feet.

  15. I would love to know why he got rid of the stock so fast. He didn't need the money. I'm sure he knew the value of Apple would only rise. Could it have been some type of previous agreement between Gates and Jobs. Btw is Jobs his real name.

  16. hopefully the guy with the pie got arrested — bill never did a damn thing wrong, he was (is) a truly bright businessman

  17. Pretty smart of Bill Gates/Microsoft. Almost pushing Apple out of business, then fund them. Buying low, selling high at its best. At the meantime getting rid of possible consequences by the Antitrust-Law and also increasing their image to the public. Well played. They knew Apple won't be a real competition anyway.

  18. On government and anti-trust: Β 
    When people in government allege to oppose monopoly, they contradict themselves.

    If they truly considered monopolisation bad, they would correctly denounce and reject government because it is a monopoly.

  19. Given context, i thought that dashlane was an old company that disappear like apple could in the past without ms help

  20. Bill gate's is a fucking Monster. Not a puppet but a monster. Everything is normal whatever he creates but it's our fault we fall for his bullshit about vaccines. He is just another Cunt who is powerful than the deep state but related.

  21. BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOOV BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO BOOOOOOOOOOOOOOOO

  22. Great videos man, but it really bothers me this comercial at the end of every video. You already get extremely well paid by Youtube.

  23. Historic fiction is still fiction. Apple was not saved by Microsoft. Microsoft needed a good investment. Look how much they made… BUT what you are clueless about: Apple was on the threshhold of starting their own software company, directly competing in all markets with MS products! Gates bought a reprieve chumming with Jobs, remember? Nah, you were just a tadpole in '84 I bet!

  24. But Apple did license it’s OS. That’s why you had Apple clones at half the price.

  25. I remember when Microsoft made the Apple software for the same operations slower, on purpose. Very funny Microsoft.

  26. Really?!
    Ending your video that way is so ugly… In fact it brings down the whole thing to a password software advert… That's sad, I won't recommand it.

  27. If Microsoft held on to those Apple shares, they would not only earn a lot of dollars but also it would have been supreme humiliation for Apple.
    Even if they thrive, those shares would always remind them that Bill Gates saved them in the first place!

  28. Apple could have easily become even more profitable by originally suing Microsoft for stealing their GUI desktop environment. Before Windows, company computers were using IBM's Fixed Disk Organizer. Microsoft never did invent anything. From Dos to Windows to Word, even Excel were never inventions. Either things were copied, or companies were bought out so Microsoft would be the only game in town. That is, until the arrival of Linux, which Microsoft did everything under the sun to kill it. But Linux was like the Hydra. Cut off one head, another few grow, taking its place.

  29. Bill gates is a true player and pimp/ and he already injected Jobs with cancer so he didn’t care πŸ˜‚πŸ˜‚πŸ˜‚

  30. Microsoft didn't save Apple. That's stretching it too far and ignoring important facts. You could say they helped Apple and it would be closer to the truth. Both companies did benefit from the deal and there were certainly selfish reasons behind Microsoft's actions. It has to be said that Apple was far from broke when Microsoft stepped in. Of course the cash they had wasn't going to last forever, but even Microsoft's $150 million dollars wasn't enough save a company like Apple in the situation they were in. It could only help them a little. Apple was going downhill losing money and more money, month after month but even with Microsoft's money injection they would face bankruptcy eventually – unless they did some drastical changes to turn losses into profit. Did Microsoft do that? No. But Steve Jobs did.

    Then you claimed that Apple refused to license the operating system to other manufacturers. That was true in the beginning but in the 90s we got licensed clones, and they were a large part of the problems that Apple had.

  31. Apple needed money and Microsoft had excess and the deal went through. Law suits are common in USA and UK. That kind of leverage put both companies in the marketplace and avoid conflicts and money saving tips.

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