San Francisco - Xinhua
Hewlett Packard (NYSE: HPQ) turned heads in both the tech and investor communities last Thursday by announcing that Meg Whitman, the former chief executive officer at eBay, would take over the company\'s top position from Leo Apotheker. After the management change was announced, the company closed the trading day last Thursday at 22.80 U.S. dollars per share with a market cap of roughly 45 billion dollars, down from its trading price of 42.07 dollars per share at a market cap of approximately 92 billion dollars 11 months ago when Apotheker first assumed the post. HP, one of the most storied companies in Silicon Valley, has lost more than half its market value. HP board said one of the main factors that led to Whitman\'s appointment is her ability to execute business plans. But last Friday, the first day after Whitman took over the reins, wary investors still sent the stock down further, wondering whether the failed former GOP gubernatorial nominee could fix the troubled giant from Apotheker\'s legacy and lead the company to return to its former glory. RIGHT CHOICE? In Whitman\'s first company-wide memo, she emphasized the need to remain focused on executing HP\'s current strategy while boosting research. \"We must invest in innovation, leverage the strength of our core businesses, enhance our software capabilities and integrate our assets to maximize the value of our investments. We believe in HP\'s strategy, and we are confident that together, with renewed focus and energy, we will deliver on our priorities for our stockholders, customers and other stakeholders,\" wrote Whitman along with Ray Lane, HP\'s executive chairman. Despite her successes at eBay, where she was actively involved in the company\'s management first as CEO and then as adviser for ten years, Whitman\'s latter years were not without criticism. Resigning completely in 2008, Whitman\'s final decisions included a string of questionable acquisitions, most notably of the Internet telephone provider Skype in 2005. Purchased for 4.1 billion dollars in cash and stock, eBay eventually sold Skype at a final valuation of 2.75 billion dollars in 2009. Additionally, many industry analysts are unsure whether her credentials in transforming eBay into a global online retailer alone will be enough for Whitman to help HP, the world\'s largest PC maker, forge ahead into the enterprise market. \"While we believe she has proven to be a very capable manager helping eBay grow from a start-up into one of the largest Internet companies, we think an ideal candidate for HPQ should have extensive experience in the enterprise market. In addition, we believe expertise in supply chain management would be helpful as well,\" said Shaw Wu, a senior analyst with investment firm Sterne, Agee & Leach in a note. Rather, Wu pointed to potential choices within HP\'s current leadership team that may be better equipped to help the company make this jump. \"We believe other potential candidates that may make sense include Dave Dontaelli, head of the company\' s enterprise business and Todd Bradley, head of PCs.\" Even before Apotheker was first hired last September, Bradley\'s name had also surfaced as a potential candidate among a number of industry analysts for assuming the role as CEO. Under Bradley\'s watch, the Personal Systems Group (PSG), which includes personal computers, mobile devices, technical workstations, personal storage solutions and Internet services, grew to account for more than a third of HP\'s total sales and took the title of the world\'s largest PC supplier from Dell. However, not all analysts share in Wu\'s view and believe that HP\'s current need for strong operational guidance should outweigh her lack of direct experience in enterprise services. \"The CEO change is a first step in the right direction and should be viewed positively by the Street. Ms. Whitman has a strong track record as a leader who gets results, and we don\'t believe that her lack of enterprise experience is necessarily a negative at this time,\" said Kevin Hunt, an analyst with investment firm Auriga in a note to clients. APOTHEKER\'S LEGACY For Whitman, her real test in the coming months will be her ability to execute a strategy largely architected by her predecessor and clearly articulate a vision for HP\'s future. Despite his brief tenure, Apotheker had enacted a number of bold moves, including continuing HP\'s history of acquisitions into the enterprise space. In HP\'s quarterly earnings call last month, Apotheker announced the 10.3-billion-dollar acquisition of British software maker Autonomy. While the Autonomy deal represents one of HP\'s most expensive acquisitions, it is part of a string of transactions meant to bolster the company\'s enterprise and information management offerings. Earlier in the year, HP announced plans to acquire Vertica, a real-time data analytics platform. Last year, the company also acquired security firm Fortify, and storage technology firm 3PAR after a heated bidding war with Dell, signaling HP\'s intentions to further develop \"cloud\" service. On the same earnings call, Apotheker also made the controversial announcement that the company would shut down its mobile webOS business and was considering the potential spin-off of its PC business, saying that the growing competitive landscape and impact of tablets on the personal computing industry has led the company to explore alternatives. He anticipated that the entire process would take between 12 to 18 months to complete. The HP board said the company\'s strategy which focuses primarily on developing HP\'s cloud-based offerings and enterprise software solutions, will remain largely unchanged. While Whitman has repeatedly stated that this is the course of action HP will continue to stick to in the short term, industry analysts are calling for a decision to be made sooner than later. \"The risk with prolonging this decision is the continued uncertainty giving customers pause. We continue to believe it may make better sense to keep the business given the strong cash flow it generates and synergies it has with the rest of its businesses (printers, servers, storage, services),\" said Wu. In her most recent conference call with investors last Thursday, Whitman said that she expected the board to arrive at a decision by the end of the calendar year. HP\'s share price closed the trading day on Tuesday at 23.59 dollars, its highest level since Whitman\'s appointment was announced.