— Things at Hewlett-Packard were waaaay bad when Mark Hurd got ousted, according to a new Fortune investigation.
Decay had begun to show in some HP offices. Mice skittered in the corridors. Spiders fell from cracked ceilings. As the company cut back on trash pickups, detritus piled up, and in one location workers took garbage home in their cars. Upon arrival, Apotheker was informed that HP was missing 85,000 chairs.
Photo: Sideshow Bruce, Flikr
It was close. Sony was hacked just about every day for a month. BlackBerry suffered PlayBook tablet apathy and its longest-ever outage. Netflix’s Qwikster debacle sent its stock tumbling by more than 75% since the summer.
But my tech turkey of the year is Hewlett-Packard. Or, more specifically, HP’s board of directors.
The company’s board continued a decade of — well, incompetence is a strong word, so let’s say dysfunction — by backing its CEO Leo Apotheker’s plan to get out of the PC business. It also killed off the TouchPad tablet that had come out just a few weeks earlier after hyping it for the better part of the year.
After slashing TouchPad’s price to $99, HP sold out its stock in days. Oops! Turns out HP may have had a product people wanted after all — hang onto that thought.
A month later, HP’s board decided it had enough of Apotheker and fired him. Fair enough, HP lowered its business outlook this year more times than Netflix changed its mind on its DVD business. Of course, executing on a strategy to convert a hardware company into a software company, when software made up 2% of sales, wasn’t exactly a cake walk.
In October, HP said it was going to hang onto its PC division after all. Oops! Just kidding, PCs are actually pretty nifty machines.
It’s as if HP saw Netflix, Sony and Research In Motion and said, “Hey, good idea! Let’s do a double-reverse-course on our premiere product, anger and confuse the hell out of all of our customers and release a tablet at a price point where no one would consider buying it.”
If that’s not enough for tech turkey of the year, I’m not sure what is. -David
The Separation Agreement provides Mr. Apotheker will receive the following benefits … reasonable relocation expenses, including return airfare, for Mr. Apotheker and his spouse to France or Belgium.
— That’s my favorite line in HP’s regulatory filing about Leo Apotheker’s severance deal. Because clearly, the $9.6 million in cash HP is coughing up can’t be expected to stretch far enough to cover plane tickets. Also: Ow. When the company pays for your ticket out of the country, they really really want you gone. -Stacy
After listening to Mr. Lynch’s PowerPoint slide sales pitch to sell Autonomy to Oracle, Mr. Kehring and Mr. Hurd told Mr. Lynch that with a current market value of $6 billion, Autonomy was already extremely over-priced. The Lynch shopping visit to Oracle is easy to verify. We still have his PowerPoint slides.
OMG. The Oracle-HP rivalry is about as nasty as Yankees-Red Sox (better luck next year, Boston!) or Ohio State-Michigan.
The above quote is from a press release that Oracle audaciously put out Wednesday night accusing the CEO of British software firm Autonomy of either “lying” or having a “very poor memory.” HP agreed to buy Autonomy for more than $10 billion. It was one of the last moves made by HP CEO Leo Apotheker before he was canned and replaced by Meg Whitman.
But Oracle, in all its awesome Ellison-ness, decided to rub salt in the wound by declaring that Autonomy tried to sell itself to Oracle first and that Oracle turned the deal down, citing the fact that Autonomy was already overpriced at $6 billion.
Oracle claims that Lynch and Autonomy banker Frank Quattrone met with Oracle’s head of M&A and president Mark Hurd. You may have heard (ha!) that Hurd used to be the CEO of HP before Apotheker.
Oracle even gave the date and time of the meeting … which was … wait for it … April Fool’s Day! That’s rich. And it only gets better.
After Lynch came out late Wednesday and admitted to remembering that he did meet Hurd, but only to discuss database software issues, Oracle put out another press release early Thursday. That one was titled "Another Whopper from Autonomy CEO Mike Lynch." And that release included links to a page called Oracle.com/PleaseBuyAutonomy. That page has the aforementioned PowerPoint presentations. Unbelievable!
All this comes as the The Wall Street Journal reports that HP has hired Goldman Sachs to protect it from activist shareholders. But based on Oracle’s latest offensive, I think that the likes of Carl Icahn are the least of HP’s worries right now. — Paul
"If you have money for just one device to send your kid to college with, it’s going to be a MacBook or a PC laptop," said Microsoft director of corporate communications Frank Shaw, in a conversation with CNNMoney in late June.
Shaw noted that PCs offer storage, processing power and networking. But networking has always been the “weak sister,” he said, pointing to the iPhone’s connectivity problems as a recent example.
"So why bet everything on the weakest link?" he asked of people predicting the death of the PC. Most PCs dwarf the processing power and storage capabilities of tablets like the iPad.Do you agree with Microsoft? -David
It’s been a rocky start to the year for stocks. But the Dow is still up 7% as the first half of 2011 comes to a close. Alas, Cisco and HP are not taking part in the fun. Cisco is the Dow’s worst performer and HP is the third-worst.
The two companies are obviously quite different but many investors are frustrated about the lack of direction at both firms. I’ve written about those frustrations recently over on CNNMoney proper. Check out "HP is still trying to be the next IBM" and "Everybody hates Cisco." Even Ralph Nader is peeved at Cisco.
In an eerie bit of coincidence, each company is about to release a tablet that has been met with tepid reviews by the gadget cognoscenti. I seriously doubt Apple’s worried about HP’s TouchPad or Cisco’s enterprise-geared Cius.
But to be fair, some investors are probably being a bit harsh in their criticism of HP CEO Leo Apotheker, who’s only been on the job for a few months. Ditto for long-time Cisco CEO John Chambers, who’s not to be confused with the S&P managing director. (Amusingly, Politico was confused.)
To suggest that HP has lost its way or that Chambers has outstayed his welcome is short-sighted. After all, it’s not as if Cisco and HP have been in a funk for that long, right? Stocks often pull back after enjoying solid gains a year earlier. Just look at the chart for HP and Cisco in 2010.
Oops. — Paul
Big chunks of most newsrooms’ tech teams are in the air today flying to CES, which makes the timing a bit odd on this event invite HP just sent out: “Please join HP on February 9 for an exciting webOS announcement.”
February!? So, what, no hot WebOS news coming at CES? Share your guesses in the comments — think it’s tablet time? -Stacy