Apple’s acquisitions of Lala.com (a music streaming service) and Color (a video streaming service) never got much attention in the press, but now a former Color employee is sharing his experience at a dinner table in 2009 when Steve Jobs simply pulled out a piece of paper to seal the deal.
Aubrey Johnson, a former Color employee, blogs about Apple’s acquisition of both companies, then owned by Bill Nguyen.
“In late November , Nguyen was seated at the dinner table in Steve Job’s home on Waverly St in Palo Alto. Also present were Eddy Cue and Tim Cook and other Apple executives.”
The Apple co-founder was reportedly leading the conversation while eating “a beet salad,” and suddenly said: “I’m going to give you a number, Bill, and if you like it, let’s do it and just be done with this whole thing. Okay?”
Mr. Nguyen agreed on the spot, says Johnson. “Jobs passed a piece of paper to Nguyen and Bill nodded. The deal was done,” according to the former Color staffer.
The purchase price reportedly was roughly $80 million / €60 million, with an additional retention bonus sum of $80M for the employees who remained aboard, bringing the total sum to $160 million / €120 million.
The interesting bit, however, was yet to come. As the story goes, a lot of the high-profile employees at Lala followed Nguyen for his next project, leaving “millions in options at a the $196.48 exercise price they had from the 2009 sale/retention bonuses.”
A while later, “those same engineers returned to Apple in the highly covered rumor that 20+ engineers went to Apple for $7M.”
As such, Steve Jobs not only got what he was after, but managed to do so paying “pennies on the dollar.”
“This time with even more experience and startup life under their belt. Paying twice was genius,” Johnson concludes.