Pixar's Fantasyland

The smoke is clearing. The frenzied rumors and handwringing over the idea of Disney (DIS Quote) buying Pixar (PIXR Quote) have given way to the reality of it all. The analysts have filed their reports and the investors have adjusted their positions, and all of it leads us to an overwhelming question:

Why did you do it, Pixar?

Somewhere between the releases Toy Story 2 and Finding Nemo, it became clear as day that Pixar had precipitated one of the biggest role reversals in the history of the entertainment industry: It dethroned Disney, the unchallenged dream factory for the Baby Boom generation.

In less than a decade, Pixar became the unchallenged dream factory for the spawn of the Baby Boomers. Mickey Mouse became as alluring as a sputtery Oldsmobile. Woody and Buzz Lightyear were sleek, powerful BMWs, leaving old Uncle Walt in a cartoon cloud of dust on the highway of computer-generated cartoons.

For a while, Pixar even seemed ready to deliver the death blow to Disney's animation efforts, sniffing around for another distribution partner after Disney refused to give Pixar the financial freedom it demanded, including the full share of the profits of the films it created. The stalemate that resulted left Disney over a barrel and added to the sour tone that has plagued Disney's management in recent years.

Now Pixar has capitulated and given Disney something it's badly wanted for years and years: Disney owns Pixar, its lucrative film franchises, its cream-of-the-crop creative team and -- above all -- its prime piece of real estate in the hearts of hundreds of millions of children around the world.

And why? Reportedly, Pixar and Jobs were reluctant to give up control over the sequel rights. But say Disney had played the tough guy and made Toy Story 3 or Finding Nemo Again. Most likely, they would have paled next to their predecessors, which would give Pixar even more cred as the top animation studio.