All Things Digital

Good thing Google seems to be backing away from its informal motto, “Don’t Be Evil.” Otherwise, news that Google board member and former Pixar CFO Ann Mather is facing civil action from the Securities and Exchange Commission for her alleged role in a stock-options backdating scandal at the animation studio would be, you know, totally ironic.

In a regulatory filing yesterday, Google (GOOG) said that Mather was notified last Wednesday that the SEC planned to recommend civil proceedings against her. That recommendation, Google was quick to stress, arises out of her prior employment at Pixar. If Mather, who has served as a member of the Google board of directors since November 2005, approved the improper dating of stock-option grants, she didn’t do it under the search sovereign’s aegis. That said, Google doesn’t seem to think she was involved at all. Said Google CEO Eric Schmidt, “We have the utmost confidence in Ann’s integrity, as well as her abilities as a director, and we continue to support Ann’s re-election to our board of directors.”

That’s a persuasive vote of confidence. Still, the SEC presumably has some reason for recommending civil action against Mather. And Disney (DIS), though it cleared former Pixar CEO Steve Jobs and anyone else “currently associated with Disney” of wrongdoing in connection with the options backdating that occurred at the company, never did offer an explanation of how the backdating came to pass. Perhaps one will be forthcoming from the SEC.

When Daily Variety broke the news that Pixar had hired writers for the pitch that became the 2007 release ‘Ratatouille,’ Steve Jobs tracked the reporter down at the Sundance Film Festival, demanding to know her sources and threatening to fire the film’s writers. He called her on the private line of a rented condo–a number she had not given out to anyone. She still doesn’t know how he found it.”
–Daily Variety, June 18, 2006

Apple’s long-running war with the Fourth Estate–well, the Black Bag ops portion of it, anyway–has finally claimed its first victim. Think Secret, a Mac rumor site Apple sued for misappropriation of trade secrets back in 2005 after it pre-announced the Mac mini and the iLife ’05 software suite, has agreed to cease publication as part of its settlement with the company. “Apple and Think Secret have settled their lawsuit, reaching an agreement that results in a positive solution for both sides,” Think Secret said in a statement. “As part of the confidential settlement, no sources were revealed and Think Secret will no longer be published.”

A bit of an about-face for Think Secret and its 21-year-old publisher Nicholas Ciarelli, who up until this point had fought the suit tooth-and-nail, painting it as an effort to chill free speech and Apple as the tech industry’s version of the Nixon-era White House for filing it. “Apple’s lawsuit is an affront to the First Amendment and an attempt to use Apple’s economic power to intimidate small journalists,” Think Secret said in a 2005 Anti-SLAPP filing. “If a publication such as the New York Times had published such information, it would be called good journalism; Apple never would have considered a lawsuit.”

Probably not. And it would never consider a suit against analyst Gene Munster, who’s essentially Piper Jaffray’s version of Think Secret. So why settle? We may never know, though in his statement, Ciarelli seemed to suggest he simply wanted to get on with his life without the specter of Apple legal hanging over him. “I’m pleased to have reached this amicable settlement,” he said. “[I] will now be able to move forward with my college studies and broader journalistic pursuits.”

UPDATE: The Think Secret camp describes the settlement as a loss for Apple. “It’s clear that Apple filed the lawsuit with such fanfare, but then stopped the entire litigation because they thought they were going to lose, and that they’d end up paying [Nick] a lot of money for it,” Ciarelli’s lawyer, Terry Gross of Gross & Belsky LLP, told Computerworld. “This shows that lawsuits like Apple’s can be stopped dead. … Other companies are going to realize that if they try something like this, there will be an uproar, and groups like EFF will do what it takes [to represent defendants]. … I would have loved for Apple to go forward on this. Apple would have caved, which they should have in the beginning.”