The Mac man who owns a part of Mickey Mouse
Saturday January 28 2006
Look up Steve Jobs, founder of Apple Computers, in The Guinness Book of World Records and you might be surprised. He is listed not because of his many achievements in a 30-year career as a technology visionary of the West Coast, but because of his salary. At Apple, producer of the ubiquitous Mac computer and iPod, he earns one dollar per year.
Spare your tears of sympathy, however. Mr Jobs, who dresses in a casually hip uniform of all-black almost every time you see him, derives decent enough wealth from the shares he holds in Apple, which celebrates its 30th anniversary in April.
Jobs, 50, takes cash if it earns a profit, which, thanks to the iPod, it has had no difficulty doing of late.
You may have forgotten, however, that Jobs has interests beyond Apple. Pixar is the name of the computer-generated animation film studio that he bought from George Lucas in 1986.
In the past decade it has been a mighty money-spinner too, delivering six of the most successful box-office hits of modern times, including Toy Story, Finding Nemo, Monsters Inc and, in 2004, The Incredibles. But here comes the best part. This week Pixar was sold to the Walt Disney Company for $7.4bn. With just more than half Pixar's shares held in his name, Mr Jobs was this week $3.7bn richer.
Not bad for someone who dropped out of college bored with his classes and decided instead to crash evening lectures on emerging computer technology at a local firm called Hewlett-Packard. You know the rest of the legend - Jobs and pal Stephen Wozniak commandeered his family's Silicon Valley garage and began making computers. And so Apple was born.
Famously, Jobs was ousted from the company in 1985 when the job of CEO went to a former Pepsi-Cola boss, John Sculley, but was lured back 10 years later when the Cupertino-based company was on its knees. Then there is the turnaround that Jobs has engineered at the company in the years since.
If Jobs has always portrayed himself as an outsider in the club of Silicon Valley chief executives, that is because that is what Apple has always been. Even today, its computer platforms are a mere speck on the universe of computerdom beneath the Windows platform of Microsoft.
Yet Jobs managed to bring Apple back from the brink - as a first step introducing the popular iMac series of computers.Without question, however, it has been the iPod and its successors, the Mini- and Nano-iPods, that have turned Apple into a juggernaut of profit-creation.
More than the little machines themselves, it has been the genius of Jobs in understanding the power available to consumers to download content - music primarily, but increasingly video also - from the internet.
The centrepiece of the strategy has been Apple's iTunes software that makes the downloading possible.
While many established record companies were fighting the concept of feeding music to consumers from the Web, Jobs was busy pushing and exploiting it. He has humiliated such titans as Sony BMG and Warner Music, who for too long obsessed about dropping CD sales. Sony, inventor of the WalkMan, made the double mistake of not coming out with its own iPod style player until it was much too late. In the Christmas financial quarter just reported, a profit-bloated Apple sold 14 million iPods worldwide, worth more than $5bn. Meanwhile iTunes has reached 14 per cent of all regular users of the internet.
The deal makes Mr Jobs Disney's largest shareholder with about a 7 per cent stake. There are even mutterings in Mickey Mouse Land that when the chairman of the company, the former US senator and Northern Ireland peace mediator George Mitchell, steps down next year, it will be Jobs that takes over.
Pixar and Disney are far from strangers. Since before the release of its first mega-hit a decade ago, Toy Story, Pixar has been partially in bed with the Mouse. Under the deal between them, Disney provided half the financing for Pixar's projects and agreed to promote and distribute them. It was a partnership that worked well. Disney got to exploit the film's characters with merchandise and theme park attractions - the Buzz Lightyear rides are still among its most popular - and take a share of the profits.
Over the 10 years, Pixar has been a computer-generated hit factory, its six films taking in gross revenues worldwide of $3.2bn. In fact, it has put Disney's legendary animation studios in the shade. The last animated hit Disney can count was Tarzan back in 1999. This week's deal has been born of two years of squabbling.
After the relationship between Jobs and the former Disney CEO Michael Eisner began suddenly to unravel, Pixar broke off talks last summer about renewing the deal between the two companies which is due to expire with the release of its next feature, Cars this June.
Eisner left Disney last autumn, however, and the new Disney chief, Robert Iger, apparently made repairing ties with Pixar his first priority.
A first hint of things to come surfaced earlier this month at an Apple convention when Iger appeared on stage with Jobs to announce a deal whereby television programming from another of Disney's companies - the ABC network, would be made available as downloadable content on Apple iPods. Clearly, the two men had something going again.
To some, the deal is an admission by Disney that despite its venerable history of animation, it has been shown up not just by Pixar but also by Dreamworks SKG, creator of the Shrek franchise. "Disney is perhaps revealing a slight lack of confidence to want to mimic Pixar's success internally," noted Anant Sundaram, a professor at Dartmouth College's Tuck School of Business. "If that assessment is true, then it is a somewhat unfortunate admission from a once-great company that fundamentally created, and defined this space." In addition, Jobs has made several public criticisms of Disney in recent years calling some of its sequels of past films just "embarrassing".
A few fans of Pixar worry that the creative flair its animators have exhibited could become smothered once they become part of Disney.
But whatever potholes may lurk, this is likely to be a sweet day for all those diehard fans of Jobs and of his Apple creations. Jobs is an odd cheese. But now the cheese owns a part of Mickey Mouse. Not bad at all.
