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Microsoft and Apple end bitter feud

August 7, 1997

BOSTON (AP) _ Darth Vader recruits Luke Skywalker. Big Brother brainwashes the free-thinking rebel.

Loyal users of Macintosh computers had no shortage of analogies on Wednesday to describe the unthinkable: Apple Computer Inc., whose easy-to-use Mac revolutionized personal computing in 1984, is cooperating with Microsoft Corp., setting aside a long-running feud with the dominant maker of PC software.

Hisses and boos erupted when Apple co-founder Steve Jobs announced the surprise alliance at the MacWorld Expo trade show here. But after the indignant protests died down, many Mac fans said the broad alliance may be a good thing for Apple after all _ helping it survive a disastrous time of plunging sales and bringing new, advanced software to Mac machines.

``It’s probably overdue,″ said Christine Naugle, who owns a small graphics design firm in Boston.

The agreement is ``inevitable and disappointing,″ said Lester Yocum, who uses Macs as a technology director for the federal government. ``But it is good to settle the camps.″

The mixed feelings stem from the unusual combination of passion for the easy-to-use Macs and pragmatism about Apple’s future.

The deal calls for Microsoft to buy a $150 million stake in Apple and also to pay Apple an undisclosed sum to end a patent-infringement dispute. It also frees the long-time enemies to borrow from each other’s software innovations.

The news initially stunned Mac loyalists, who consider Apple a crucial buffer against Microsoft chief executive Bill Gates’ domination of the computer industry.

``You’ve got to be kidding!″ one incensed audience member shouted.

But aspects of the alliance could be crucial to Apple, which has fallen mightily since the late 1980s when its Mac was widely regarded as the easiest computer to use.

Microsoft agreed to continue to release upgrades of its popular Office business software in Macintosh formats for the next five years. Office is already the single biggest Mac application.

With Microsoft continuing to write Macintosh programs, Apple is hoping that other software makers will keep creating new Macintosh products.

``I’m very interested in seeing Microsoft develop for the Mac,″ said Russ Conte, a manager of a temporary employment agency who uses the machine to create business presentations.

Apple also hired a new, more activist board, adding four new members including Jobs. ``This gives me a whole lot more faith than the deal with Microsoft,″ Conte said.

News of the alliance sent Apple’s stock up $6.56 per share on the Nasdaq Stock Market to $26.31. Microsoft, meanwhile, rose 12.5 cents to $143.44 on the Nasdaq.

Still, to many die-hard Macintosh fans, the auditorium scene where the news broke seemed too much like Apple’s famous TV ad: A Big Brother-like figure on the overhead screen droning on about the Brave New World of technology to a crowd powerless to break free.

But this wasn’t the famous Super Bowl commercial that launched the Mac computer in 1984. The man on the overhead screen was Gates, Apple’s archenemy, introduced by Jobs as Apple’s new ally.

The boos and hisses that followed were understandable.

``The people don’t look at it from a business standpoint. They look at it from an emotional point of view _ like shaking hands with the enemy,″ said Jan Tatousek, sales manager for a Czech firm that sells Macs.

Of course, Microsoft, the world’s largest independent software maker, stands to benefit from a relatively cheap investment for a company its size.

For instance, Microsoft can now adopt features from Apple’s QuickTime software for multimedia programs, which is considered superior to Microsoft’s version. Several analysts viewed that prospect as an important reason for Microsoft signing the deal. The companies insisted they don’t currently have plans to share QuickTime.

``The fault line is still yet to be determined as to how far it will go,″ said Richard Doherty, an industry consultant who is director of The Envisioneering Group, based in Seaford, N.Y.

Such potential sharing unnerved Mac users, but Apple executives said they would try to keep Mac and Windows distinct.

``I don’t believe this agreement will lead to an homogenization,″ said Guerrino DeLuca, Apple’s executive vice president of marketing. ``We’ll maintain differences where differences are important.″