DISNEY, SEEKING NEW MAGIC, BUYS PIXAR / JOBS’ NEXT ROLE: Whatever part he chooses, he’s unlikely to cast himself as silent partner: San Francisco Chronicle, January 2006

john lasseter

In the wake of Disney’s blockbuster acquisition of Pixar, Steve Jobs brings his quest for perfection to an even grander stage.

He is the largest individual shareholder in the storied Walt Disney Co. And he remains the head of Apple Computer, the revolutionary computing company he founded and later reinvented as a digital music powerhouse. Not bad for a man who was considered washed up 20 years ago and was battling cancer a mere 18 months ago.

As always with the mercurial and enigmatic Jobs, the question is: What’s next?

Does he take an active role in Disney, bringing his Silicon Valley sensibility to an iconic Hollywood studio struggling to find its way in the digital world? Does he use his new clout at Disney to boost his true passion, Apple Computer, by funneling movies and television shows to the video iPod? Or does he just sit back and stay quiet, declaring victory after reaping an enormous profit from his original $10 million investment in Pixar?

Those who have followed Jobs’ rise, fall and comeback at Apple don’t know for sure, but the last option — keeping his mouth shut — hardly seems likely given his track record.

“I think Steve will be a big voice in many respects. And that’s a good thing,” Disney chief executive Bob Iger said in a joint interview with Jobs on

CNBC.

Josh Quittner, editor of Business 2.0, a business and technology magazine published in San Francisco, has written about Jobs extensively over the years, gaining favor for some Time magazine cover stories but also incurring Jobs’ famous wrath for attempts to uncover Apple’s super-secret plans.

“I don’t think he would ever be a silent anything,” Quittner said. “That’s just not who he is. He is here to enact his vision. You either go with it or get out of the way.”

In some ways, the question for Disney is which Steve Jobs do they get: the Steve Jobs who at Apple is “obsessing about every curve on the plastic container of the iPod,” in the words of Alan Deutschman of San Francisco, author of “The Second Coming of Steve Jobs,” or the Steve Jobs who spent minimal time at Pixar, content to let creative force John Lasseter and businessman Ed Catmull run the company.

“At Pixar, early on, when they were making ‘Toy Story,’ he tried to get involved in the day-to-day making of the movie,” Deutschman said. “The Pixar people succeeded in keeping him at arm’s length, and throughout Pixar’s history, he’s played the role of owner and chairman, rather than day-to-day micro-manager.”

Jobs’ role at Pixar has been largely “to promote the company to Wall Street, negotiate with Disney, and promote the movies when they come out,” Deutschman said. “Those are extremely important jobs, and he’s been brilliant at them.”

Jobs, who turns 51 next month, has had an amazing life by any definition. His path to the billionaire’s club — Forbes estimates his net worth at $3 billion — had humble beginnings. He was born to a single mother, was adopted by a working-class couple when he was 1 week old, was a college dropout, and survived a bout with cancer in 2004.

He famously started Apple with Steve Wozniak in his family’s Mountain View garage in 1976, and his world-changing ambitions and love of “insanely great” products led to Apple’s pioneering personal computers. But by 1985, Apple was soundly thrashed in the marketplace by computers running Microsoft Corp. software, and Jobs was ousted from his beloved company.

He went on to found Next Computer, which never was a commercial success but which Apple acquired, setting the stage for Jobs’ return and Apple’s storied comeback. He led the design of the candy-colored iMacs and then the foray into music with the now ubiquitous iPods.

Along the way he bought Pixar from George Lucas for a mere $10 million and, although it foundered in obscurity for a decade, it went on to revolutionize animated movies, cranking out one hit after another in a partnership with Disney.

Investors and analysts occasionally questioned how Jobs could be chief executive of two major publicly traded companies, Apple and Pixar.

“I’ve always thought 80 percent of his time was spent on Apple and 20 percent with Pixar,” said Gene Munster, an analyst at Piper Jaffray & Co. “If I was going to bet how this plays out in a year from now, he will have more time to work with Apple since he doesn’t have to deal with trying to work out a distribution deal with Disney.”

Yet another Jobs-watcher, Jeffrey S. Young, co-author of “iCon: Steve Jobs, the Greatest Second Act in the History of Business” (a book that led Jobs to ban sales of all books from publisher John Wiley & Sons from Apple stores), believes Jobs can’t help but give in to the distractions posed by his new role at Disney.

“I think this is bad news for Apple,” Young said. He pointed out that Apple shares fell $1.63 Tuesday. “How can you not take your eye off the ball and wander around La-La Land chasing Mickey Mouse?”

Young also wonders whether Jobs’ relationship with Disney could anger other potential partners. Disney and its ABC television network have already provided Apple’s video iPod with episodes of hit shows such as “Lost” and “Desperate Housewives.” Young suggests competing networks would not want to enrich a rival by giving them their hit shows.

And Young also took a page from history to question whether Disney chief Iger could be safe with Jobs looking over his shoulder.

Jobs learned a hard lesson at Apple in 1985 when his friend John Sculley engineered his ouster from the company that he had founded. But when Apple struggled in the 1990s, Chief Executive Officer Gil Amelio brought him in as an adviser and board member, only to have Jobs orchestrate Amelio’s ouster and his own return to the helm.

Munster, from Piper Jaffray, doesn’t believe Jobs’ ultimate motive is to become a media mogul.

“I think he would give advice, but I don’t see him being interested in redefining Disney,” Munster said. “His archenemy is Microsoft. He wants to change the world by taking down Microsoft.”

If that’s the case, Jobs should be an invaluable adviser to Iger, who has publicly advocated moving Disney even faster into the digital age.

“I would think that he will be a valuable resource for Disney,” said Jason Snell, editorial director of Macworld, a magazine published by IDG in San Francisco. “He’s generally been perceived as being someone who has credibility in the entertainment industry because of his association with Pixar. He’s a technology person who understands the needs of content owners in a digital world.”

For instance, Snell said, when music labels balked at putting content online, Jobs could tell them he understood their concerns about piracy because he ran a content company — and then he signed them up for Apple’s fabulously successful iTunes music store.

Plenty of pitfalls await, though. Will Jobs’ arrival at Disney turn out like the last big marriage of new and old media, the disastrous merger of AOL and Time Warner? Could Pixar’s entry into the Disney fold end up like Disney’s acquisition of Miramax, which brought prestige but also headaches and which ended last year when Disney sold the division back to its original owners, brothers Harvey and Bob Weinstein?

Ken Marlin, managing partner of Marlin & Associates, a boutique investment bank in New York and Washington, D.C., that focuses on media and technology companies, doesn’t see those scenarios playing out at Disney.

Miramax, Marlin said, needed the Weinsteins to make deals, and with their threatened departure, Miramax would no longer work. Although some might argue that Lasseter is equally crucial at Pixar, Marlin didn’t think so.

And in the case of Steve Case, the former AOL chief, Marlin said he tried to change the culture of Time Warner “from a slow-moving print magazine company to a faster moving technology-oriented company. The corporate body politic rejected the invader.”

Disney, Marlin points out, has roots in animation — and in innovation, making Pixar a perfect fit.

That makes sense to Kristina Woolsey, a former distinguished scientist at Apple.

“Disney was the innovator in the 1930s and ’40s, putting sound together with animated action,” she said. “To have that innovative spirit from the tech domain is pretty exciting.”

“I would hope for all of us that (Jobs) takes Disney in an innovative new direction,” Woolsey said. “He’s a real design genius. He sees things the traditionalists don’t. I’m hoping he brings that to Disney. Wouldn’t you be disappointed if he just sat there?”

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