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Stupid Business Decisions: Ross Perot Blows Chance to Own Microsoft


Believe it or not, Stockdale wasn't his worst decision.

As any fan of late-night programming can attest, Dana Carvey didn't have far to go to turn H. Ross Perot into a character. A five-and-a-half-foot Texas business tycoon prone to folksy proverbs and worth four billion dollars when he made a run for the White House in 1992, Perot's quirky charisma failed to keep him out of comedians' crosshairs. A man of tremendous accomplishment just couldn't seem to elude someone donning false ears and adopting a pinched impersonation.

But had Carvey or anyone else delved deeper into Perot's past, they might have found something worth mocking beyond an elfish appearance.

In 1962, Perot had made a name for himself in the tech world by founding the Dallas-based Electronic Data Systems -- now a division of Hewlett-Packard (HPQ). Supplying computer systems to government agencies and larger corporations, he had parlayed a $1,000 investment into a colossal success -- earning a Fortune magazine cover as the "fastest, richest Texan" in four years' time. This, after he had quit his salesman position IBM (IBM) because they didn't think big enough.

As the '70s were drawing to a close, there was one company Perot had his eye on. A company with similar humble beginnings -- one might even call it a garage -- spawned from a paltry $1,500 start-up capital.

That company's name was Microsoft (MSFT).

Comprised of fewer than 30 employees, this assembly of wide-eyed computer nerds would have provided software that Perot could deliver to his clients -- also giving the group a huge foray into the corporate world. Perot invited a tall, gawky kid named Bill Gates into his office to discuss a deal. In an interview with Stephen Manes and Paul Andrews for their 1993 Gates biography -- cited in the authors' 1992 piece featured in The Seattle Times -- Perot gave his impression of the scruffy lad.

"[He] was absolutely on the right track with what he was doing. And we were really impressed with the people he had working with him and his ability to get the people working with him to work to the outer limits of their capability," Perot said.

Gates showed similar excitement for the meeting. "We thought, 'Hey, these guys can help take micros into these big corporations.' "

But when it came time to discuss an acquisition price, negotiations broke down. Perot recalls Gates' asking price as somewhere between $40 million and $60 million. Gates, however, remembers setting his selling price somewhere between $6 million to $15 million and had no plans to hand the company over for what Perot was offering. He politely declined and neither party attempted to counter.

Unwilling to raise his price, H. Ross Perot turned down a chance to buy out Microsoft in 1979.

To say Perot has regrets would be putting it lightly. "I consider it one of the biggest business mistakes I've ever made," he said. Perot added, "My satisfaction wouldn't be in all the money I'd made. It'd be in the day-to-day contact with Bill and the people at Microsoft in watching them do it. That would have been a hell of a seat, right?"

Perot had that to say prior to November 1992. Hopefully, he's since let go of losing his chance at an illustrious seat.

But missing out on leading the free world aside, Perot didn't let the botched Microsoft deal slow him down. He sold controlling interest of the company to General Motors for $2.4 billion in 1984 and his remaining shares for $700 million in 1986. That same year, Perot helped Steve Jobs -- still reeling from his resignation from Apple (AAPL) -- by offering the lion's share of venture capital for Jobs' upstart computer company, NeXT.

Unfortunately, like the Microsoft deal, it didn't take off as many people had hoped.

But hey, you can't say someone who bought an original copy of the Magna Carta was ever doing all that bad.
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