This story reminded me of Panic software's story about Audion and their meeting(s) with Apple. The bits about Steve Jobs are actually really telling for his current moves over Flash and Android. "It's like you guys are a little push-cart going down the railroad tracks, and we're a giant steam engine about to run you down."
Powerpoint seems to have worked out well for MS, no doubt it is the standard for presentation software. Alternate timelines would be incredibly educational if we could see them: if MS had purchased this instead of powerpoint would they still be the market leader? Or was inclusion with Word and Excel in the Office Suite the true reason they dominate this market today. I need a 'What If' machine....
I'd be interested to know why the change of heart on Microsoft's part: was it just the sudden price change in the stock, as the post implies, or was there another reason?
http://www.panic.com/extras/audionstory/