Disney has announced a deal to purchase Pixar for $7.4 billion. This deal seals what has had been a very rocky relationship between the companies, peaking in 2004 when Jobs and ex-CEO Michael Eisner broke off talks to extend the distribution of Pixar's films. This deal makes Steve Jobs the single largest shareholder of Disney and boardmember.

I find this deal to be alarming in the sense that this another case of overpriced mergers. This all stems from Disney's fears that it will not be able to independently produce quality movies. Their fears were slightly justified with the release of Chicken Little that had not performed as well as the Pixar releases. This definitely affects the direction in which Disney goes in the next years as Steve Jobs is definitely without his opinions.

If I was Steve Jobs, who's ultimate loyalties should be towards Apple, I would be slightly concerned that this deal with Disney could negatively affect the appeal of Apple if the prospects of Disney do not improve after this deal. Steve Jobs should know better than many, the ability of the media to negatively affect a company once there is sign of decay.

Ultimately I think this was a poor decision by Disney who spent too much money for what ultimately is for personnel as the technology is standardized and Disney controls the distribution. Disney would have been better off by creating large incentives to steal some of the best creative talent from Pixar because $7.4 billion can purchase considerable loyalty. Well that's all folks.

-Trevor