Morning Coffee Oct 28 2011

Meg Whitman to Keep H-P a Hardware Company

By joseph walker

Reversal (WSJ)

Will Meg Whitman's conservatism pay off? The new Hewlett-Packard chief executive reversed the decision of her predecessor yesterday by announcing she would not sell the company's $40 billion personal computer business. The decision soothed investors, boosting the share price almost 6% in pre-market trading.

In August, then-CEO Leo Apotheker said the company wanted to spin off its PC unit, the company's biggest source of revenue, and would buy U.K. software services company Autonomy for $10.3 billion, an acquisition that closed earlier this month. It was a sign that H-P would abandon its emphasis on electronic hardware and focus on software and services, not an absurd strategy considering the businesses' low profit margins and the gradually declining sales of PCs. However, the PC move spooked markets, and the company's share price dropped 20% overnight.

Yesterday, Whitman told the Times, "First and foremost, H-P is a hardware company." In keeping the PC business, H-P cited the need reassure the markets, its supply chain partners and enterprise customers.

But risky, bold actions are the hallmarks of successful tech CEOs. Under the Apotheker strategy, H-P was following the IBM roadmap of transformation. IBM shed its PC unit in 2005, turning itself into a software and services behemoth that is also a leader in high-technology innovation. Days ago, IBM showed the tech world how an orderly succession is conducted - a far cry from H-P's firing of Leo Apotheker, a decision that Whitman approved as a board member.

Whitman's decision to keep H-P selling computers may turn out to be the right one, but she still has to figure out a way to turn the 70-year-old company from dinosaur to innovator.

Consolidating Power (WSJ)

The chief executives of Groupon and Zynga will retain an inordinate amount of control over their companies after they go public through a special quirk in shareholder voting. Groupon's Andrew Mason, for instance, will get 150 votes for each of his shares, compared to 10 votes for Google's Larry Page.

Hurt Feelings (Cnet)

Steve Jobs took credit for ideas that weren't his, says Jonathan Ive, Apple vice president for industrial design in the new Jobs biography. Jobs referred to Ive as his "spiritual partner."

Hiring Nerd Commandos (FINS)

Data analytics company Hadapt will hire up to 20 new employees over the next year after raising $9.5 million in new financing. Three-quarters of the new hires will be for technical roles, with the balance made up of sales and business operations hires.

In With the New (AllThingsDigital)

Jared Grusd, AOL senior vice president of business development and chief of strategy, is leaving the struggling Internet company to join the hot online music service Spotify. Backed by Sean Parker, Spotify has snagged some other high-profile execs recently, including AOL chief of sales Jeff Levick.

Hard Times in Japan (Reuters)

Video game stalwart Nintendo will post its first ever annual net loss this year, the company announced yesterday. Nintendo has seen its portable game business damaged by the rise of smartphone gaming.

Running for the Exits (DealBook)

Finding a buyer for Yahoo looks like it's going to be a long slog, and with each passing day the company loses more employees and executives.

RIM Loses Another One (Reuters)

Senior vice president for software and business services Jim Tobin left Research In Motion months ago, the company finally confirmed. Tobin was responsible for RIM's expansion into cloud-based services and its music-sharing service.

Standing Up (Business Insider)

Steve Jobs intimidated and sometimes bullied his employees, but he loved it when subordinates stood up to him. In fact, the company gave out an award to the person who stood up for themselves best.

Buzz Around the Office

Remember 2004? (Ken Jennings)

It seems even successful Jeopardy! contestants fall into the 99% in 2011.

List of the Day: Sticking Out a Job You Hate

1. Don't wait for a pat on the back

2. Take pride in your appearance

3. Balance your hate with something else you love

(Source: AOL Jobs)



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