During his first tenure at Apple, Steve Jobs had been largely responsible for portraying the battle for the PC marketplace as a direct conflict between Apple and IBM. As an extension, that pitted Apple against Microsoft, the company that provided the IBM PC's operating system and later sought to duplicate the look and feel of the graphical Macintosh OS with Windows.

The animosity between underdog Apple and market leader Microsoft continued well past 1985, when Jobs resigned from Apple. The rift became a part of Apple culture that manifested itself as a deep loathing for everything Microsoft or Wintel. Meanwhile, the Macintosh's market share shrank down to single digits.

By 1996, Jobs had been comfortably removed from the situation long enough to admit that the desktop PC wars were over; Microsoft had won. It was counterproductive, Jobs thought, to spend money and energy fighting a battle against Microsoft that could not be won. No, Apple would have to play it cool and compete on its own terms. In the meantime, it would help to have the Redmond giant on its side instead of directly opposed to the struggling company.

In exchange for a , Microsoft vowed to significant manpower to developing new versions of Office and Internet Explorer for the Macintosh for at least five years. Microsoft also agreed to buy $150 million in Apple stock, which insured a vested interest in Apple's success. In return, Apple also agreed to make Internet Explorer the default browser for Mac OS for five years.

This deal, famously announced by Jobs at Boston Macworld 1997 (featuring a giant Bill Gates on a screen behind him), was part of a public appeal to Mac fans to bury the hatchet and move on. Apple could succeed alongside Microsoft, not in spite of it, he said. Jobs' new position on Microsoft freed up mental energy in Apple, so developers and fans alike could move on and conquer new markets in the years ahead.