WebTV: And then there were two

Summary:With Steve Perlman departing, WebTV's remaining co-founders 'knuckle down and focus.'

WebTV Networks Inc. has always been a company in the hot seat. No more so than in 1995, when a fire marshal was about to close the startup's offices for a myriad of violations.

But a lucky rabbit saved it.

"We were wrapping up the inspection when the marshal saw [partner Phil Goldman's pet rabbit]," recalled Steve Perlman, co-founder and president of the Mountain View, Calif., company. "And then he asked, 'Is that a dwarf rabbit?' Phil started talking rabbit shop-talk with him -- by the end of it, we had gotten a 30-day extension."

That seems to be the Perlman story: With a little good fortune and a lot of technical know-how, he and his two partners -- Goldman and Bruce Leak -- would build companies and then move on.

The three jumped from Apple (Nasdaq:AAPL) to General Magic and then onto WebTV.

On Tuesday, the Mountain View, Calif., company announced that Perlman would be the first to move on from WebTV, leaving Goldman to remain the vice president of engineering and Leak to move up to president of the interactive TV company. (See Co-founder Perlman leaves WebTV.)

Time to knuckle down
Perlman leaves behind a company that most would consider a success.

After finishing up the first prototype WebTV device more than four years ago, the three partners -- Goldman, Leak and Perlman -- agreed to found the company.

By April 1997, the fledgling WebTV service only had 56,000 subscribers, but had attracted the attention of mighty Microsoft Corp. (Nasdaq:MSFT), which bought the startup for $425 million.

Now two years later, WebTV boasts more than 800,000 subscribers, said Perlman.

Co-founder Leak is left the task of building on that legacy -- and it won't be easy, he said.

"We need to knuckle down and focus on delivering product," Leak said, pointing out that the company's deals with cable providers and technology makers open up great opportunities -- and responsibilities -- to fill orders for its products.

Perlman's lofty dreams
For Perlman, leaving WebTV means a long-awaited vacation, but not a total break -- he will continue to remain on the advisory board of the company.

Then toward the end of summer, Perlman said, it will be back to work for him.

The entrepreneur has renovated a loft in San Francisco's South of Market district -- stockpiling the space with enough audio, video and computer technology to satisfy any gadget geek.

"I've always started up companies wanting funds and equipment -- not this time," he said.

On the surface, Perlman was closemouthed about his next project. Deep down, however, he may not actually know what he wants to do.

"There are a lot of opportunities in front of me right now," he said.

The new Apple
The departure breaks up a team that has worked together on and off for more than 10 years. Despite going separate ways many times, Leak, Goldman, and Perlman always seemed to end up together.

The three met at Apple. When Leak applied for a job at Apple, Perlman interviewed him -- and turned him down.

Now, jokingly, Perlman admits to "a long track record of not recognizing talent."

While at Apple, Perlman worked on projects to bring together a variety of media, while Leak had primary responsibility for QuickTime and 32-bit QuickDraw. Goldman created MultiFinder, the Mac application that allowed users to work on more than one application at once.

All three shared time at startup General Magic Inc., where Goldman and Leak worked on the Magic Cap operating system and Perlman worked on Magic TV. It was at General Magic that Perlman shared a cube with Goldman and his lucky rabbit, Bowser.

"To me, General Magic was the new Apple," said Leak. "We had Bill Adkinson, Phil Goldman and others who were key in creating the original Apple."

Quite a team
Eventually their work at General Magic drove the three to put together a project that would meld TV with the Internet.

Their history together might be the reason why, as he looks forward, a touch of nostalgia seem to color Leak's voice.

"The reality of it is that Steve and I were a great team."

Topics: Apple, Microsoft, Start-Ups

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