Microsoft Invests $150 million in Stumbling Apple Computer

In a move some deem stunning, Microsoft Corp. has made a $150 million investment in non-voting stock of long-time competitor Apple Computer. As part of the deal, Microsoft agreed to continue releasing upgrades of its popular Office business software in Macintosh formats for the next five years, as well as other Microsoft tools for the Mac platform. Apple, in turn, will make Microsoft's Internet Explorer browser the default browser in future operating software releases. The companies also plan to enter into a broad cross-licensing agreement, and will collaborate on technology to ensure compatibility between their respective virtual machines for Java and other programming licenses.

This announcement deals the biggest blow to Netscape Communications Corp., and their Navigator Internet browser platform suppliers. With Windows and Macintosh platforms having the same default browser, developers will likely write to Microsoft development specifications rather than Netscape Navigator's.

In the same announcement, Apple revealed plans to replace four former board of directors with four hands-on industry executives: Bill Campbell, president and CEO of Intuit Corp; Larry Ellison, chairman and CEO of Oracle Corp.; Steve Jobs, chairman and CEO of Pixar Animation Studios; and Jerry York, former CFO of IBM Corp. and Chrysler Corp. They join directors Gareth Chang and Edgar Woolard.

Reacting to the news, Apple's stock shot up 34%, to 26.44 at the end of trading August 6.

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