Steve Jobs' high-flying animation studio becomes full-fledged member of Walt Disney's entertainment empire.
The merger, which puts Apple Computer CEO Steve Jobs on Disney's board of directors, is a bet on Pixar's digital approach as the successor to the pen-and-ink industry popularized by Walt Disney. The purchase is also the latest indication of a tectonic collision between technology and Hollywood.
Pixar and Disney have had a long history together, though the recent past has been rocky. Pixar has had an uninterrupted string of hit features with "Toy Story," "Toy Story 2," "A Bug's Life," "Monsters Inc.," "Finding Nemo" and "The Incredibles." Disney has distributed all of them.
However, talks to extend the deal turned sour, with allegations flying back and forth between Jobs, who is also Pixar's CEO, and Disney's then-CEO Michael Eisner.
This week's merger is sure to shake up Hollywood and place Jobs in one of the most powerful positions in the movie business. But it also raises questions for movie fans who have flocked to Pixar films and who are now worried that the company's unique vision might be diluted.
Jobs' entry into the entertainment business came in 1986, when the 30-year-old former head of Apple Computer bought into Pixar, shortly after being pushed out of the computer company he had co-founded. In 1991, Pixar signed its first three-feature-film deal with Disney, a relationship that Jobs said at the time had been a "dream" since 1986.
The first fruit of that deal was 1995's "Toy Story," which grossed more than $350 million worldwide and opened movie audiences' eyes to a new kind of 3D animation. On the strength of that debut, Pixar went public in late 1995, making Jobs a billionaire.
However, left mostly unsaid throughout the merger celebrations was exactly how Jobs would balance his new role as board member at Disney and his job as chief executive of Apple.
As Apple has moved into video distribution--using Disney content as its first centerpiece--those two companies' fates have become increasingly entwined. Some corporate-governance experts say that puts Jobs in a deeply uncomfortable position, particularly as Apple and its rivals seek to distribute Disney and Pixar films online.