From nytimes.com:

As of last week, David Geffen’s phone line at DreamWorks SKG headquarters here was still live. But some people were already struggling to accept that he would no longer be part of the movie company he had helped build.

Steven Spielberg actually stammered a bit in trying to explain his erstwhile business partner’s departure.No, Mr. Spielberg said, he really did not know why Mr. Geffen was parting ways with DreamWorks after 14 years.

But yes, he hoped he and Mr. Geffen would remain close. “I know David will be in my personal life,” said Mr. Spielberg, who stood near the door of his office in a Southwestern bungalow complex on the Universal Studios lot.

“I cannot imagine not having David in my professional life,” he added. “If that’s true, I’m going to have to figure out what to do about it.” After months of turmoil, Mr. Geffen, Mr. Spielberg and the chief executive of DreamWorks, Stacey Snider, three weeks ago joined about 100 associates in severing ties with Paramount Pictures, which had bought DreamWorks for $1.6 billion in 2006.

In a deal maker’s master stroke, Mr. Geffen created a new company to be run by Mr. Spielberg and Ms. Snider, with backing from Reliance Big Entertainment of India. Its movies will be distributed by Universal, with which Mr. Spielberg has long-standing ties.

But Mr. Geffen said he would not be part of the equation. In fact, after engineering some of the most breathtaking deals and transitions over nearly 40 years, he has indicated that he is backing away from Hollywood altogether.

Along the way, Mr. Geffen, now 65, amassed a fortune that Forbes magazine estimated this year at $6.5 billion. It is enough to permit luxurious retirement, and to focus on interests like fine art and the Rising Sun, a $200 million yacht he shares with Oracle’s chief executive, Lawrence J. Ellison.

Mr. Geffen’s only major remaining Hollywood presence is his position at the separate DreamWorks Animation. For the moment, he remains on the board of the company, over which he and Jeffrey Katzenberg, its chief executive, hold voting control. But people familiar with his plans said he would resign soon.

“This closes a chapter,” Mr. Katzenberg said, of Mr. Geffen’s decision not to join the new Spielberg company, during an interview this month at DreamWorks Animation’s campus in Glendale, Calif. Mr. Katzenberg declined to discuss any plan Mr. Geffen might have to leave the animation company board.

How the decision to withdraw from Hollywood came about, and what it means to an industry that has long regarded Mr. Geffen as its most powerful figure, is far from clear. Mr. Geffen declined requests to be interviewed for this article.

The new DreamWorks is smaller than the old one. It will confine itself to making a half dozen or fewer movies a year, without straying into television or other kinds of entertainment. Ms. Snider, as its chief executive, will shoulder more responsibility for financial health now that Mr. Geffen is out of the picture.

Mr. Geffen’s departure originally was planned more than a year ago, after he negotiated new terms with Paramount. He had a right to make an early exit from the studio if he chose — and Mr. Spielberg and Ms. Snider were entitled to leave behind him. What Mr. Geffen did after negotiating the deal, Mr. Spielberg said, caught him by surprise: He told Mr. Spielberg that he did, in fact, intend to leave. And he expected Mr. Spielberg and Ms. Snider to do the same.

“Where do we go?” Mr. Spielberg now recalls asking.

“Don’t worry, I will handle all of that,” Mr. Geffen said.

In any case, Mr. Geffen appears to have orphaned a small corps of associates who had come to view him as the central support for their own hopes and dreams.

In describing Mr. Geffen’s role at DreamWorks, Mr. Spielberg likened it to a family relationship. “Jeffrey and I were like the kids,” he said, while Mr. Geffen built the house and saw that the bills were paid.

Mr. Geffen’s legacy has included the sale of his record company to MCA; MCA’s eventual sale to the Japanese electronics giant Matsushita; a behind-the-scenes war on the once-powerful agent Michael S. Ovitz; and the highly public separation of the DreamWorks principals from Paramount after friction with that company’s chairman, Brad Grey. As a talent manager and record executive, Mr. Geffen helped build the careers of artists like Jackson Browne and Joni Mitchell. Though he personally produced only a handful of movies, including “Interview With the Vampire” in 1994, he was closely involved with many others, including “Risky Business” and “Dreamgirls.”

Link