Did you know that Bill Gates once saved Apple from bankruptcy?
In 1997, Bill Gates invested US$150 million so Apple could survive and grow its business. But why did Bill Gates do it?
In 1997, Steve Jobs, who returned to lead Apple, had to accept the harsh reality the company’s financial reserves in the bank were less than 90 days. Meanwhile, the company needed large funds to continue running, developing products, and marketing. With the company on the verge of bankruptcy, Steve Jobs invited Bill Gates tobepartnership. Surprisingly, Bill Gates agreedit.
We all know that Apple and Microsoft are competitors. If Bill Gates had decided not to accept Steve Jobs' offer, then Microsoft would have become a huge company that controls the computer operating system market in the world. In fact, we will never see the success of Apple as it is today, which has achieved the achievement of being the most valuable company in the world.
Why would Bill Gates do that?
What Bill Gates did was not purely out of philanthropy for his rival Steve Jobs. Instead, Bill Gates did it for business purposes.
There are 3 reasons underlying Bill Gates' decision to save Apple.
First, according to InfoWorld magazine, Microsoft is the most successful software company that achieved sales of US$55 million in 1983.
This achievement indicates Microsoft controls the market far more than Apple as the main competitor in PC operating systems with a graphical user interface (GUI). If Apple continues to slump into bankruptcy, then Microsoft’s position will control the market absolutely.
This means in the worst-case scenario Microsoft will be investigated by the Federal Trade Commission (FTC) again and the company could be divided into several ownership parts in order to reestablish competition in the market.
Previously in 1990, Microsoft was investigated by the FTC for alleged monopolization in the PC operating system market. You need to know that America has strict regulations regarding monopolistic practices regulated in the Sherman Antritrust Act of 1890 and overseen by the independent agency Federal Trade Commission.
From this experience, Bill Gates is more careful in making every step of his business decisions.
The second reason is Bill Gates investment created a new deal with Steve Jobs, which was the support of Microsoft's Internet Explorer browser that could be used on Apple's Macintosh for 5 years.
This deal certainly strengthens Microsoft's position in the browser war between Internet Explorer and Netspace's Navigator in 1995-2001.
As a result in 2001, Internet Explorer reached the peak of its success, controlling about 96% of the market.
The third reason was Bill Gates' strong belief that the return of Steve Jobs could change Apple's financial problems. Therefore, Bill Gates accepted Steve Jobs' offer of cooperation by investing US$150 million.
In exchange, Apple gave Bill Gates non-voting shares and dropped its lawsuit against Microsoft claiming it had copied their operating system.
This deal clearly benefits Bill Gates as Apple's shareholding continues to increase dramatically.
