How Larry Ellison plotted to buy Apple and make Steve Jobs CEO

Larry Ellison has never been know to be…er…hesitant when it comes to doing what he thinks is right. And never was that more apparent than when he and Steve Jobs discussed how to save Apple during the company’s darkest days.

Here’s the text of Ellison’s remarks about Jobs and saving Apple from a commencement speech at USC:

“And now I’d like to tell you one last story about my best friend, a guy who had lots of crazy ideas, and taught me an important lesson.

My thirty-year friendship with Steve Jobs was made up of a thousand walks. If there was something he wanted to talk about, and there always was, we’d go for a walk. We’d climb to the top of Windy Hill, hike around Castle Rock or through the sands on the beach at Kona Village.

Over the years one particular walk stands out. We had a lot to talk about that day so we jumped in the car, put the top down, and headed out to Castle Rock State Park in the Santa Cruz mountains. It was over twenty years ago back in mid–1995. Steve was finishing up Toy Story at Pixar and running NeXT, the computer company he founded after he left Apple.

Apple was in severe distress. It had gone steadily downhill during the ten years of Steve’s absence. The problems were now so serious people were wondering if Apple would survive. It was all too painful to watch and stand by and do nothing. So the purpose of that particular hike through the Santa Cruz mountains on that particular day was to discuss taking over Apple computer.

My idea was simple, buy Apple, and immediately make Steve CEO. Apple wasn’t worth much back then, about $5 billion dollars. We both had really good credit and I had already arranged to borrow all of the money. All Steve had to do was say yes.

Steve proposed a somewhat more circuitous approach. First, persuade Apple to buy NeXT computer, then Steve would join Apple’s board and over time the board would recognize that Steve was the right guy to lead the company.

I said, ‘Ok, that might work, but Steve if we don’t buy Apple how are we going to make any money.’ Suddenly, Steve stopped walking and turned toward me. We were facing each other when he put his left hand on my right shoulder and his right hand on my left shoulder. Starring unblinking into my eyes, Steve said, ‘Larry, this is why it’s so important that I’m your friend. You don’t need any more money.’ I said, ‘Yeah, I know, I know.’ Then I said, ‘but we don’t have to keep it. We could give it all away.’ I was whining.

Steve just shook his head and said, ‘I’m not doing this for the money. I don’t want to get paid. If I do this, I need to do this standing on the moral high ground.’

The moral high ground’, I said. ‘Well that might just be the most expensive real estate on earth’. But I knew I had lost the argument. Steve had made up his mind, right there and then, at Castle Rock in the summer of 1995, to save Apple his way.

At the end of the hike right before we got back into the car, I said, ‘Steve, you created Apple, it’s your company, and it’s your call. I’ll do whatever you want me to do.’ I went on the Apple board and then I watched Steve build the most valuable company on earth.

The lesson here is very clear to me. Steve was right. After a certain point it can’t be about the money. After a certain point you can’t spend it no matter how hard you try. I know, I’ve tried hard. But it’s impossible. In the end the only practical option is to give nearly all of it away. So why did Steve go back to Apple? Why did he devote so much of what remained of his life to his job? Why do I? I believe the answer is that deep inside of all of us, all of us, there is a primal desire to do something important with our lives.

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You can also watch Ellison share his story about Steve Jobs in the YouTube video of the event (skip to 15.00):

Steve Jobs became CEO of Apple again the right way

I found Ellison’s story to be quite fascinating, and it illustrates a big difference between Ellison and Jobs. Ellison wanted to plow ahead and retake Apple using blunt force by simply buying it. That plan was right in line with Ellison’s style and history of business dealings.

But Jobs was much more subtle, he didn’t seem to want people to perceive that he was “taking over Apple.” Instead he wanted to be quietly welcomed and then ultimately embraced willingly as CEO by Apple’s board. Jobs took control of Apple again without the drama of the company being taken over in a hostile way.

History has validated Jobs’ choice, and Apple came back from the brink of death to be one of the most valuable companies on the planet. Not only did Jobs bring the company back, he also installed the executives that would carry on the company’s mission after his own passing.

I’m really glad that Larry Ellison shared this story, I had no idea any of this had happened. But it really is vintage Steve Jobs to see him thoughtfully considering how best to return to Apple and lead it again.

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