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Less than 12 hours before his big announcement, nobody here knows yet about the bombshell to come. In fact, Jobs is still negotiating it here at the Castle--on a cell phone. "Hi, Bill," you hear him say in the echo chamber of the old hall. Then his voice drops, and for nearly an hour he paces the stage, running through last-minute details with Gates. All the while, he leans over his computer, paces, lies down on the stage, paces, lurks in dark corners, paces and talks, paces and talks.

This is the fateful call for the boy titans of the personal-computer revolution, meant to settle the war. At one point, talking about Apple, Jobs says, "There are a lot of good things, happily--and a lot of screwed-up things." Then, to his crew, he yells, "Have we got satellite contact with the other side?" Assured this has been taken care of, he answers a question from Gates about what to wear on the morrow ("I'm just going to wear a white shirt," he assures him), and he finally ends the conversation with a heartfelt "Thank you for your support of this company. I think the world's a better place for it." And so that's how Apple and Microsoft, Steve Jobs and Bill Gates, finally seal it--on a cell-phone call.

The deal is vintage Jobs. Amelio began the process of repairing relations between the two longtime rivals. But once he was out the door at Apple, Jobs contacted Gates to try to get talks started again. Gates dispatched his CFO, Gregory Maffei, who met Jobs at his home. Jobs suggested they go for a walk. Grabbing a couple of bottles of mineral water from the fridge, the two took off for a stroll around Palo Alto. Jobs was barefoot. "It was an interesting scene," Maffei recalls. "It was a pretty radical change for the relations between the two companies." The two walked for nearly an hour, through Palo Alto's green university area, as they pounded out the details of a potential deal. Jobs, Maffei says, was "expansive and charming. He said, 'These are things that we care about and that matter.' And that let us cut down the list. We had spent a lot of time with Amelio, and they had a lot of ideas that were nonstarters. Jobs had a lot more ability. He didn't ask for 23,000 terms. He looked at the whole picture, figured about what he needed. And we figured he had the credibility to bring the Apple people around and sell the deal."

That credibility would be tested as Jobs delivered the speech to the faithful. And then he was there, on the giant screen. Gates appeared, amid boos and hisses, to announce that Microsoft would invest in and cooperate with Apple. Jobs is disappointed by the "childish behavior" of those who booed. "I'm sure some people want to cling to old identities. I was a little disappointed at the unprofessional reaction. On the one hand, people are dying to get the latest release of Microsoft Office on their Macs, and on the other hand, they're booing the CEO of the company that puts it out. It seems really stupid to me." He adds, "Apple has to move beyond the point of view that for Apple to win, Microsoft has to lose."

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