Page last updated at 22:55 GMT, Tuesday, 24 January 2006

Disney's Pixar takeover is boost for Jobs

By Ben Richardson
BBC News business reporter

Apple and Pixar boss Steve Jobs
Steve Jobs has seen Apple grow from unknown firm to top brand

Steve Jobs, the head of Apple, has had his share of ups and downs, including a battle with cancer and at one time even being ousted from the computer company he founded.

But the self-styled outsider and college dropout who was famously paid $1 a year at Apple has refused to quietly fade away.

His fortunes have revived in recent years and Disney's purchase of animation firm Pixar may finally have cemented his position as a main player in the technology and media industries.

The question is: where does he go now?

Picture showdown

Following the $7.4bn (4.1bn) takeover of Pixar, the company he bought in 1986 for $10m, Mr Jobs gains a place on Disney's board of directors.

Some observers are already tipping him to be Disney's new chairman.

Pixar's computer animated film Toy Story 2
The success of Pixar's Toy Story caught the industry by surprise

This situation would have been impossible last year, when Mr Jobs and former Disney boss Michael Eisner had a very public falling out.

On the surface the battle seemed to be about distribution rights, but at its core was a tussle over who would define the future of increasingly profitable animated films.

The power of Disney, the pioneer and grand-daddy of the genre, was on the wane, while Pixar was the thrusting young upstart itching to fill its boots.

However, Disney had an ace up its sleeve - a distribution network that alongside its marketing and merchandising expertise could make or break films such as Toy Story, The Incredibles, Finding Nemo and A Bug's Life.

Cash stream?

For shareholders the spat between the two firms was vexing, and helped speed Mr Eisner's exit from the home of Mickey Mouse.

Disney's new boss Robert Iger immediately looked to smooth the ruffled feathers and get Pixar and Mr Jobs back on board.

I want to put a ding in the universe
Steve Jobs

The first sign that relations had thawed was when Disney agreed to sell television programmes from its ABC channel, including hits Desperate Housewives and Lost, through Apple's iTunes music and video systems.

Analysts applauded the deal, saying that with Apple's understanding of how to make technology user friendly, it was likely that many more consumers would be tempted to watch TV programmes on digital players such as an iPod.

While this may be a small revenue stream at present, for companies like Disney it could become a powerful money-spinner.

The problem is that few media companies have really grasped the full potential the technology can offer them, analysts believe.

'Speak his mind'

And this is where Mr Jobs, who once said he wanted "to put a ding in the universe", is likely to come into his own.

"It is critical that media companies gain a greater understanding of technology and the impact it may have on their businesses," Kathy Styponia, an analyst at Prudential Securities was quoted in the Financial Times as saying.

Apple and Pixar boss Steve Jobs
The outspoken Mr Jobs is unlikely to wait about for divine inspiration

"No company understands technology and the consumer better than Apple," she added.

At Apple, Mr Jobs describes his role as making space for creative people to work in, and keeping the rest of the company out of there.

While he may not get the chance to be so hands-on at Disney, it is unlikely that he will sit quietly.

"Jobs is a maverick guy who is not afraid to speak his mind," Joe Bonner, an analyst at Argus Research told the Independent newspaper. "He's outspoken. He would not be a quiet little boy on Disney's board."

Many in the market believe that Mr Jobs may manage to shake things up at Disney, especially as he thinks that "innovation distinguishes between a leader and a follower".

They will be watching to see if Mr Jobs can get Disney to follow in his footsteps.




SEE ALSO
Disney moves closer to Pixar bid
24 Jan 06 |  Business
In pictures: Pixar exhibition
14 Dec 05 |  In Pictures
Spotlight on Disney's new boss
14 Mar 05 |  Business
Profits triple at animator Pixar
06 May 05 |  Business
Pixar-Disney delay Cars release
08 Dec 04 |  Entertainment
Incredibles tops Nemo film record
08 Nov 04 |  Entertainment

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