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HP/Compaq Merger Apparently Approved 304

Spinality writes "Looks like HP's hotly contested merger with Compaq is going ahead. Various news headlines such as this one at report that stockholders voted to merge, against the wishes of the Hewlett and Packard families. " There isn't official word yet, but this looks like it's pretty much a done deal. Anyone else think the business world looks like a game of Pac Man?
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HP/Compaq Merger Apparently Approved

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  • by PoiBoy ( 525770 ) <> on Wednesday March 20, 2002 @09:34AM (#3193527) Homepage
    before they've hatched. The official tally may take as long as six weeks to be completed, and until then this is just speculation. It's still too close to call. All of these media reports remind me of, ahem, Florida.
    • by sg3000 ( 87992 ) <sg_public&mac,com> on Wednesday March 20, 2002 @11:26AM (#3194040)
      > The official tally may take as long as six
      > weeks to be completed

      I agree. I also think that Fiorina has nothing to lose by trumpeting a victory prematurely. If after 6 weeks, she's proven wrong, she has a lot more things to worry about than prematurely crowing about victory.

      In fact, from what I've heard, there's less than a 2 percent margin right now, which means investors are split on what to do here. That hurts the CEO's credibility in either case, which means the real winners in all of this may be Dell and IBM.
  • Check it [].

    The register, in their usual style, compared the voting process to a zimbabwean national election....
  • So how long before we see a computer company named Compaq/HP/Gateway/Dell/AOL-Time Warner Computer systems?
    • The Compaq/HP/Gateway/Dell/AOL-Time-Warner vs. Microsoft court cases that appear will be given the new name "World War 3". Thanks for listening.
    • This is kind of an interesting question. I worked for AOL when they "acquired" SUN Microsystems. The talk then was that SUN was going to be putting out a PC running something other than M$, and it would include AOL. I haven't seen anything that actually lasted longer than any press release about this. I know they had some Internet type box out, but I've never seen one in person, nor have I heard of anyone that I know actually buying one.
      Although, if something like this large of a merger were to take place, don't you think M$ would be involved? With all the drones, er... masses, being so reliant on Windont, I have a hard time with thinking that M$ will ever be broken or replaced. Of course, my opinion of the general populous is so low, I'm surprised we don't have outlet covers standard in homes to keep them from electrocuting themselves.
  • by AlexDeGruven ( 565036 ) on Wednesday March 20, 2002 @09:36AM (#3193538) Homepage
    When I finally see it. There has been so much speculation about this, and rumours about that, a little bit of leak here, and a little assumption there.

    When I finally see an announcement that it's happened and start seeing some Hewlett PackPaq(tm) boxes on the shelves, then we can start talking.

  • With the current state of the (US) economy, it's a very smart move for hp & compaq to merge. in the end, i think the hp families will see that this was in the best interests of the company, since their combined market share will ultimately increase the market value after the merger.
    • by Anonymous Coward
      Actually, I don't think it's that good of a thing.

      1) HP now has a wider range of products to sell with the purchase of compaq. However, the transition and management of this huge behemoth will cut into their profits. And lower profit margins means less reinvestment in the company, which will inevitably lead to less innovation.

      2) HP predicts another 15,000 layoffs in the already battered tech industry as a result of this merger.

      3) It is almost never a good situation to have large companies merge to create an even larger company. Another oligarchy will not be beneficial to the consumer. It will only drive up prices, create less competition, result in less innovation and produce shoddier products. These are the natural results of huge corporations grabbing more and more market place. All I need to say is AOL-Time Warner.

    • by sphealey ( 2855 )
      With the current state of the (US) economy, it's a very smart move for hp & compaq to merge
      Care to comment on the results of Compaq's takeovers of Tandem and Digital? HP's takeover of Apollo? AT&T + NCR? The track record just isn't there for technology mergers, particularly when the cultural issues are as bad as they will be between Houston and Palo Alto.


    • by Skyshadow ( 508 ) on Wednesday March 20, 2002 @11:00AM (#3193920) Homepage
      With the current state of the (US) economy, it's a very smart move for hp & compaq to merge.

      I'm not sure I agree with you a hundred percent on your police work there, Lou.

      Big mergers are tough to pull off in the best of circumstances. At a very nuts-and-bolts level, there's an awful lot of operations work to be done in integrating a company -- standardizing procedures, eliminating redundant staff and offices, etc. This is far from easy to do, and it is an operation that's been bungled more times than I can count by companies that should have known better, and Fiorina doesn't have any solid operations experience.

      Then there's the culture clash. I interned with SGI at what used to be a Cray location back in '98, and the culture war was in full swing. Ultimately, it was the refusal of Cray die-hards to integrate (which resulted largely from the treatment of them as second-class citizens by Mountain View) that really caused SGI to puke Cray back out again.

      Furthermore, all of this takes the company's attention from the market, which neither HP nor Compaq can afford to do right now. HP's core imaging products are under assault, their workstation business has taken tremendous hits in the last five years and their overall reputation as a company has gone down the tubes (remember when it was a good thing to have an HP printer? I do). Compaq is also reeling after losing substantial market share to companies like Dell; add to this the fact that Best Buy is coming out with an in-house brand, and they've got trouble.

      According to an interview I heard on NPR with Fiorina, she's hoping that HP will emerge as an IBM -- a large tech conglomerate with many profit-making business units. The problem is, they're trying to do it with two units (PCs and imaging) that IBM found unprofitable enough to get (mostly) out of.

      Now, add to all this the fact that this is hardly the "best of times" -- Fiorina and the other pro-merger folks have managed to alienate roughly half of their investors, including several board members and two guys with framiliar-sounding last names. There's considerable dissent within HP, too; trust me, I had lunch in a bar a block from HP's Cupertino campus last week (the Duke; I like the chicken sandwitches and Newcastle), and a lot of the conversation I overheard was downright angry.

      So I think it's a mistake. There's not a lot of historical prescedence for this sort of merger working well, you're combining two ailing companies and expecting to see a healthy one emerge, and there are going to be too many internal distractions, anyhow.

      If I held HP stock, I'd wait for the dust to settle a little and sell it (at this point, even if the merger doesn't go through). If you want to be in PCs, buy Dell. If you want to own shares in IBM, buy IBM.

      • A Fargo reference deserves a response!

        I concur. My company merged with another company about four years ago, and we still have the merger pains. The problem is things are rarely simple when merging two large companies.

        Since HP and Compaq are both struggling, the turf wars within the company will be unimaginable for anyone who hasn't been through it. Things are easier when one unit is consistently profitable and growing, while the redundant unit in other company is losing market share and money. But the market situation is rarely that clear cut, and it becomes very difficult to figure out where to eliminate the redundant group and how to convince existing customers to not jump ship to a competitor afterwards.
      • Over the past ten years, it is surprising how few of the giant mergers have worked out well for the average shareholders, given that the motivation for these mergers is supposed to be that the combined company is worth more than the two companies individually. On the other hand, in almost all cases, a few senior executives have personally amassed large wealth.

        Of course, if I could get a gig running a very large corporation where the basic contract terms were

        • Get paid $1M for running the business,
        • Get paid $10M (golden parachute) if the business is sold to another giant corporation, and
        • Get paid $50M (stock options) if the stock price goes up by $20 per share even for a little while,
        I suppose my behavior would be pretty predictable.

        Sorry, just cynical this AM.

  • I've had a lot of problems installing H-P devices. H-P has become a sloppy company, in my opinion.

    I don't think Carly Fiorina is better than Lew Platt, the former CEO. It has been a long time since H-P has had a real leader.
    • I can certainly agree on the devices side. I support many, many HP printers in a mid-sized University Library, I'll tell you what, if you use a Deskjet, be prepared to fight to the death to get rid of all the other software that gets installed... I just wish that they would quit with the whole "let's see how much extranious software we can install before the machine becomes completly unusable" bit and get back to work!
  • by R2.0 ( 532027 ) on Wednesday March 20, 2002 @09:41AM (#3193552)
    Which is different from an actual tally.

    Is she taking a cue from the last Pres. election and getting on the news with a fait accompli in the hopes of discouraging the last remaining mail-in proxy voters? Yes, AG did it backwards and conceded prematurely, but the media had no problem projecting before the polls closed. Lesson learned by Carly?
  • Sad news. (Score:3, Insightful)

    by Onionesque ( 455220 ) <> on Wednesday March 20, 2002 @09:43AM (#3193561) Homepage
    I find it disheartening that it's impossible to maintain a business with integrity and vision in the face of greed. The Hewlett family are not exactly soft, left-wing hippies; they just wanted to protect the strength of their brand.

    Prepare to see the quality of HP products plummet. Prepare to see a slow death of niche imaging products.

    Prepare to see layoffs of otherwise securely employed folks. Rah rah, share value.

    Their network printers were so nice...
    • Re:Sad news. (Score:3, Insightful)

      by istartedi ( 132515 )

      Prepare to see the quality of HP products plummet. Prepare to see a slow death of niche imaging products

      Prepare to see competitors move in with better products and/or take up the slack. Although unless they are a big competitor I agree that they won't be able to subsidize niche products. I don't know what these niche products are, but perhaps they could be sold to some other company.

      Prepare to see layoffs of otherwise securely employed folks. Rah rah, share value.

      Prepare to see a flood of early retirements from HP. A significant number of them could have the smarts and/or the money to start their own companies. They are likely to be people who miss "the garage" if Compaq suitizes the company too much. They could create some interesting stuff.

      • Re:Sad news. (Score:3, Interesting)

        by analog_line ( 465182 )
        I'm not sure how much Compaq will "suitize" HP. There is a good chance that Compaq will, in the end, be the one who takes over Hewlett Packard, not the other way around. There are alot of strong wills in the Compaq organization, not the least of which are the ex-Digital people. (The general opinion of about a year ago, when I was working in Compaq for a consultancy was that while Compaq had forked out the money, it was Digital that took over the company...a whole lot of dirty politics and strong wills battling in there) It wouldn't surprise me if Compaq reshapes HP more than the other way around, but there aren't that many actual suits running around in Compaq's Houston offices. I thought it was an extremely loose environment, but then I've worked for some real tightasses.
    • Re:Sad news. (Score:4, Insightful)

      by Art Tatum ( 6890 ) on Wednesday March 20, 2002 @10:07AM (#3193687)
      I find it disheartening that it's impossible to maintain a business with integrity and vision in the face of greed.

      Nah, it's only impossible if the company is public. The stock market is completely screwed up these days. Instead of being a way for people to invest in a company that they think deserves support, it has become little more than a government-regulated lottery.

      • Re:Sad news. (Score:3, Insightful)

        by bero-rh ( 98815 )
        I find it disheartening that it's impossible to maintain a business with integrity and vision in the face of greed.

        Nah, it's only impossible if the company is public.

        It's not impossible, just hard.
        Red Hat [] still manages it (at least right now).
        I agree that going public was a mistake, though.

        The stock market is completely screwed up these days. Instead of being a way for people to invest in a company that they think deserves support, it has become little more than a government-regulated lottery.

        True - a lottery with many spammers (buy this ticket^H^H^H^H^H^Hstock to make money fast!) backing it.
      • The stock market is completely screwed up these days. Instead of being a way for people to invest in a company that they think deserves support, it has become little more than a government-regulated lottery.

        These days? I feel confident that many of the speculators of 1929 would paint you the same picture, except that there was less government regulation.

    • Re:Sad news. (Score:4, Interesting)

      by sphealey ( 2855 ) on Wednesday March 20, 2002 @10:17AM (#3193724)
      Prepare to see the quality of HP products plummet. Prepare to see a slow death of niche imaging products.
      Through thick and thin, the one thing I have always been able to count on from HP was solid, honest engineering information about their products. Went to the HP web site last week for the first time in a few months to get comparitive technical data on a few printers. I was directed to a site full of eye candy which also provided one-click ordering from the "HP Store" - at prices 25% higher than CDW. No technical information in sight (or on site).

      There goes 15 years of my loyalty as an HP customer down the drain in one shot.


  • Share prices (Score:3, Insightful)

    by Chocky2 ( 99588 ) <> on Wednesday March 20, 2002 @09:43AM (#3193563)
    Interesting watching the share prices of HP (NYSE:HWP) and Compaq (NYSE:CPQ) - makes it clear what the markets/analysts think of this!
  • It is not the last (Score:2, Informative)

    by tanveer1979 ( 530624 )
    The time of mega mergers is here. Who cares if hundreds, nay thousands loose their jobs. Instead of innovation and growth, the companies are taking the easy way out. This works in the short run, but the economics will catch up. They can run away from slowdown only for some time, evenetually it will catch up. Luckily the economy's improving, otherwise it would have been a disaster. Such mergers are bad for consumers too. As long as they were competiters, consumers could get good products as both were trying to do one up. For example is Dell also merges with them tommorow, the competition space will get monopolized. It seems the hardware world is also going the software way. Like M$ monoplizes everything these big daddys gona eat up competition, what will we have them, open design hardware!?
  • Voting today? (Score:2, Interesting)

    by ackthpt ( 218170 )
    I heard the actual vote is today.

    Anyway, here's what HP has on their own site. [] Looks like most bridges have been burned in this one and if it doesn't actually go through HP's going to look like a pretty sorry mess. Too bad the combatants in this one didn't keep the vitriol out of the press, i.e. one page ads in the SJ Merc, or the 'dillitante' remarks.

    IBM must be aware that even if it does go through, it's a house divided, which will take some time to come together, if ever.

  • by bje2 ( 533276 ) on Wednesday March 20, 2002 @09:45AM (#3193578)
    quick question...who else is now big in the world of retail computers...meaning like, you walk into a Best Buy or a Sears, whose computers are you gonna see??? this doesn't matter to me, cause i would personally never buy a computer from a store like that....but i'm just curious, becuase it seems like Compaq and HP were always the majority of the retail desktops out there...who is left to compete? or are they gonna have a virtual monopoly in that field???
    • What you're going to see is 3 or 4 high-end machine brands on the shelves, and a slew of bargain machines all over the place (not much different than we have now).

      As far as the racks at BB go, the big players are Compaq, HP, Sony, and newly Alienware. But there's also the lower end machines interspersed amongst the big players (ie. e-machines, BestBuy's personal brand, etc).
      There's always going to be choice, just maybe a little less once the merger happens, but then we'll be seeing many more bargain boxes on the shelves.

    • One word: Sony
    • who else is now big in the world of retail computers

      If the HP/Compaq deal goes through, Dell should be number 2 behind them... and I THINK that they are still phone/web order only.

      Store brands, like PowerSpec by MicroCenter (and the ilk of BestBuy and CompUSA)... the ultra-cheap (but functional) eMachines crap, the super-pricey (but refined) Sony desktops, the elitist (Bang & Olufsen of the PC world) Apple equipment.

      (Obligatory avoidance of "flamebait" moderation by Apple-zealots: I am an Apple owner and fan, but we're not exclusive-- I'm seeing other machines at the moment. Not sure if the relationship is heading towards commitment, but we have plenty of time, right? She does have expensive tastes...)

      IBM is also still out there in some places... it was at Radio Shack between the end of Tandy PCs and the retail agreement with Compaq. IBM prefers to sell its PCs to corporations at a loss and then rob the customers blind with on-site service contracts. My company just committed to buying 30,000 desktops from them. Whee!

      I say, if it's in your house, build it yourself. If it's for someone who has your phone number (like your mom, brother, uncle, etc.), have them go pick out an HP-in-a-box at WalMart for $699 (price) or an iMac at CompUSA (quality). Get the warranty and support, because man, you don't want them calling you asking you why their computer is performing an illegal operation, and you REALLY don't want to spend the time trying to get them to understand Linux either. Unless they'll pay your salary. :)

      • My grampa kicks your grampas ass.

        We got him and grandma a nice little compaq to surf the internet with. Inside of a year not only was he installing peripherals, and software, but adding ram on his own. Sure I get like a call a month, and sure I get all kinds of "interesting web site" clippings from their local paper sent to me. But it's really satisfiying to see...err hear them getting so much enjoyment out of it. I didn't think they'd do a tenth of the stuff they've done with it.

        That will certainly teach me to underestimate MY grandparents, perhaps yours have a similar lesson in store for you.
      • Okay, I liked your remark about Apple, so I couldn't resist replying.

        Apple has an odd market niche. There are actually plenty of more expensive PCs, you just don't see them in mainstream stores. To get something as powerful as the $2,999 2x1ghz PowerMac for the audio/video applications that are its primary market niche, you'd have to buy a $3,500-4,500 PC. You just don't see many of those in store shelves, so Apple looks expensive.

        If you want a LCD monitor, the iMac is amazingly competitive, especially when the low-end models finally show up.

        Of course as long as you have a Mac already, I don't see her as having tastes any more expensive than PCs. All the software prices I've seen are the same on both platforms.

        • You just don't see many of those in store shelves, so Apple looks expensive.

          I bought an original Bondi Blue iMac in the fall of 1998. (I was poor at the time, so I financed the machine through Apple Credit. I paid it off well ahead of the eight year term, though.) It was $1,299, and it was my fourth Mac... I had previously owned an LC, a PowerBook 145, and for four years, a Quadra 840av. (Easily the most stable and "personable" computer I've ever owned, even including the iMac.)

          My wife eventually started using the iMac so much that I decedid to get myself a machine. I didn't want to spend another 1300 bucks, so I built a PC and had someone give me a monitor... It was a Celeron 333 running at 500MHz, and it cost me about $700 to build over several months.

          By this time, my wife wanted to watch DVDs on her machine... sorry, I said, it can't do that. So I bought a set-top box, and she was happy. Then she saw her friends making mix CDs, and she wanted to do that. OK, we can buy an external USB CD-RW, but it's $300 (year 2000) and it's limited to 4x. No thanks; I put a 16X CD-RW in my PC and it worked fine for $100.

          She needed a bigger hard drive (we replaced the 4 GB drive in the iMac with a 36 GB for $200), and added 256 megs of laptop RAM for $120. Thank God for standard components.

          Eventually she's compaining that the processor is too slow. So OK, I put a Celeron 800 in my PC, and give it to her. (I'm a little more liquid by this time, thanks to a big promotion.) She bitched about the UI differences for exactly two days, before realizing that Win2000 had actually run Eudora and Netscape for two days without crashing. (This was a problem on the iMac.)

          So, I get another PC now. (Mid 2001.) Go down, look at slot-loading iMacs with CD-RW and a decent amount of RAM, $1500. Look at G4s, drool, and see $1700 with no monitor. Go to, and build an Athlon 1600+, 512 megs DDR RAM, NIC, SB Audigy sound, GeForce2 GTS video, case, keyboard, mouse, floppy, 40 gig hard drive, 16x CD-RW, 16x DVD-Rom drives. Approximately $700 including shipping. Run down to Walmart and buy a Radius 15" TFT monitor (which I cannt say enough good words about, especially with zero dead pixels) for $375.

          For less than $1100, I now have a system that is at LEAST as powerful as a flat-panel iMac, though not as pretty. And it doesn't run OS X, which is a nice OS. But I still haven't had a single bluescreen on either of my home-built Win2k boxen. Now, for $400 more, I could have got a nice flat-panel iMac with the SuperDrive and all the sweet Apple consumer apps on it, but with this system, I can swap out the vidcard and sound card at well, and use DDR DIMMs instead of laptop SDRAM.

          For what it's worth, I traded in the old iMac with $500 in cash for a bitchin' 1976 Mercury Cougar XR-7. I still have a couple of my old Macs laying around, but now that I can Q3/Wolfenstein all night on my ugly Windows box, waiting for the GeForce4 Ti 4200 to come out...

      • If the HP/Compaq deal goes through, Dell should be number 2 behind them... and I THINK that they are still phone/web order only

        Dell will probably never go into the retail market. Their manufacturing scheme is direct sales. In order to streamline thier costs, they do not being assembling their systems until an order is placed. This allows them to keep their inventory extremely low. Whereas, HP and Compaq are inventory type companies. They can't build new products until the old ones are off the store shelves. Dell will probably never be seen in Best Buy.

        • Dell will probably never go into the retail market. Their manufacturing scheme is direct sales.

          Well, unless, after having swallowed most of the corporate desktop market the only way for Dell to achieve growth is by going into the retail stores.

          They could still keep their ultralow inventory system, too, if they could just convince the consumers to wait for the box in the mail 2 days after they visit BestBuy...

    • by Akardam ( 186995 ) on Wednesday March 20, 2002 @10:49AM (#3193867)
      Now, I have to admit, I'm biased, since I work for one of the little guys, but I wouldn't work for 'em if I didn't feel strongly about it.

      Say what you will about the mom and pop shops, but I've seen customer after customer come to us utterly frustrated by their experience with a name-brand pre-built. Seriously, the next computer you get, don't just waddle down to Best Buy or Sears, check out the small shops.

      In my opinion, you get better value, better support, and a better warranty from the smaller companies than you do from the big ones.

      Anyway, just my 2 bits.
      • I've always wanted to own a brand-name PC, because I like at least a little flash in my industrial design.

        You white box people should really experiment a bit with design, because every time I've bought a brand-name PC, it's let me down in some way. Most of them use ultra-cheap video cards that are largely incompatible with Linux. And if you give up on Linux and want to go back to the Operating System of Evil, it's a big hassle getting Windows back; you actually have to call the company and beg them for the restore CD.

        I've solved that problem recently by switching almost entirely to the Macintosh platform (with most of my remaining mindshare in the SGI camp, and the rest in Linux). But I will need to hold my nose and get a modern Windows machine fairly soon, because I really should be viewing what I design in something vaguely like what others see.

        So white box folks, perhaps you could introduce a case design that was a little more sophisticated than a white (or beige) box. Even black would help.

        • Part of the problem we've found with the "cool" cases is that they tend to be VERY cheap. All flash and no substance. So we stick with solid, uninpressive looking cases (like Enlight). They're built to last, and they're much easier to work with.

          If you really want to have a flashy case, you can almost always buy one online, and then take it down to the local shop and have 'em stuff the guts for you. You can even buy one without a P/S, and they'll put one in for you. We do this all the time -- a customer can bring in any parts he wants (with a few notable exceptions) and we'll build him a complete computer around them.
        • I build my own PC I have now, the most expecive component? The case. (exept the monitor)

          I bought the Lian Li PC-60 usb. very nice case. When I bought it it was $260 (i think), I'v seen them for $140 now.
    • I mentioned this in a posting I made above this one, Best Buy is preparing to roll out it's own line of desktops. Here's a link: 2/nf2002021_9293.htm []

      Retail computers are and will continue to be an important market, especially for first-time computer buyers or more casual users. I can't imagine that the retail outlets would ever allow one company to get any sort of real hold on this markets -- why deal with a monopoly on a commodity item?

    • quick question...who else is now big in the world of retail computers...meaning like, you walk into a Best Buy or a Sears, whose computers are you gonna see

      The motherboards are in aisle 3, the RAM is in aisle 4, the video cards are in aisle 8...

      Self Built PCs = good
    • I bet they've got Emachine's quaking in their boots! (and smoking out their power supply's...)

      I guess there's always room for America's Choice Computers (available at your local safeway supermarket)

  • Why? (Score:3, Interesting)

    by TestBoy ( 567457 ) on Wednesday March 20, 2002 @09:46AM (#3193581)
    This merger did not make sense for HP. Why would a company that is trying to get out of the desktop computer business buy another company that has a large desktop manufacturing facility. I agree with the Hewlett family for blocking this merger. Just because the merger might be approved by the voters by the narrowest of margins does not mean this is good for HP. HP is paying too much for bigger stake in the low margin pc market. What happened to HP's focus of delivering services?
  • I'm no financial guru. I have no clue if Carly is running HP into the ground and I frankly don't care. But her comments back in January, linux.htm, are very Linux friendly. And I respect that.
    • Re:Unitfy Unix (Score:4, Interesting)

      by R2.0 ( 532027 ) on Wednesday March 20, 2002 @09:58AM (#3193643)
      Don't care if Carly is running HP into the ground but respect her Linux friendlyness?

      Allow me to weild the clue-stick here. If HP disappears because Ms. Fiorina wants to measure dicks with Mr. Palmisano of IBM, she might as well be giving weekly handjobs to Mr. Torvalds for all the good it will do Linux.

      In fact, if HP does get involved with Linux heavily and then goes down to mismanagement, they'll become just more fodder for the MS FUD machine: another Linux comany bites the dust.
  • It is going to take 4 weeks for the vote to be counted and apparently it is going to be very close.

    Remembers me of another election and something about Florida... ;op

    Anyway, if I was still working for HP I would be rather pissed off at Fiorina taking some fat cash from the merger while 15000 employees are going to get the boot (and countless more were laid off by her policy). Especially since she is the one who would have got the boot if it wasn't for the merger!

  • What I'd love to see if this merger goes through is the HP midlevel servers phased out and the Compaq ones come more into play. The Proliant series of rack-mount servers are stable and is rock steady, cheaper, and offers more options then a comparable HP. Then, merge TopTools into Compaq Insight manager, add some tweaks for NNM and OVO as well as a few other HP software tools and bundle it all together. They couldnt lose. You'd have arguably the best x86 server hardware with the best software management tools from one company.
    Have you taken a look at Compaq hardware lately? Nothing compares to it serverwise, 2U servers with redundant PSU's, redundant fans and even redundant memory boards, HP cant come close.
  • I hope this merger does not screw up the HP Laser line nor the Compaq server solutions.

    They both make crappy desktops that I wouldn't buy anyway. I doubt if a merged company will do any better. Just one less brand of machine for Circuit City and Best Buy to sell.
  • decisive majority? (Score:3, Insightful)

    by ( 463190 ) on Wednesday March 20, 2002 @09:50AM (#3193597) Homepage
    ``A decisive majority'' of shares not affiliated with the Hewlett and Packard families voted yes, Fiorina said.

    It's going to take more than just a majority of non-hewlett shares to swing this one. The Hewlett family's shares account for 18% of the company. It's going to take *61%* of the remaining 82% to make a majority of the total shares.
    • It's going to take more than just a majority of non-hewlett shares to swing this one. The Hewlett family's shares account for 18% of the company. It's going to take *61%* of the remaining 82% to make a majority of the total shares.

      Yes, but remember that the proxy consultants (SIS I think they're called) have advised the institutional investors to vote for it. That's a large and influential block.
    • There are insitutions who are not affiliated with the families who have said that they were going to be voting against, such as California Public Employees' Retirement System []. They only control 1%, but it's seen as an influencial decision. So your 18% is really at least 19%, possibly more.

  • Compaq LaserJet doesn't have a ring to it!

  • Maybe with Compaq and HP joining, the HP line of handhelds won't suck quite so much. For a CE device, compaq is amazingly good.
  • even if the merger is agreed upon, which is still several weeks out, so many feel that this will spell the final doom of both companies. I really don't see what either really gains in this merger, other than Compaq stays alive a little longer, and HP will probably now die a little sooner. I don't think the outlook is good for either one right now.

  • ...but my first reaction to the idea of this merger is that a lot of jobs at those companies are gonna be lost. My second reaction was damn those CEO's always look so happy when the screw the rest of the company. Oh well.
  • May I recommend Kim Stanley Robinsons Red/Blue/Green Mars Trilogy. Unfortunatley I can't find any links relating to the corporate intrigue found in these novel's and the picture the author paints of earth's near future but maybe you'll have more luck if you haven't read the books!
  • Proxys for this vote (Score:5, Informative)

    by nucal ( 561664 ) on Wednesday March 20, 2002 @10:04AM (#3193672)
    I own a small amount of HP stock and the proxy mailings for this vote were obscene. I received at least eight proxys - half from HP and half from the Packard family group. Only proxys by mail were accepted - online and telephone options were not available. The most recent proxy mailed in was the one that actually counted. All designed for maximum confusion. Messiest merger vote I've seen in a while.
    • Only 8!?! Sheeee-it... I work for HP (don't get me started.) and I have shares through the stock purchase plan as well as through the 401k plan. I counted them on yesterday...


      Counting Propaganda letters from both sides, proxy cards, printed booklets, Airborne Express overnight return envelopes (Must be 10 bucks a pop).

      I had heard that each mailing cost between $2 - 3 Million. But I'm not bitter since my web team can't get training, equipment, or even software packages to actually accomplish our job.

      I love this company, but I fear we are heading right down the proverbial shitter.

  • Pac Man? No... (Score:5, Insightful)

    by guttentag ( 313541 ) on Wednesday March 20, 2002 @10:06AM (#3193683) Journal
    Anyone else think the business world looks like a game of Pac Man?
    Pac Man has to contend with ghosts who make a genuine effort to prevent him from gobbling up everything on the screen. Real-world companies can escape this danger by buying off the Justice Department through contributions to a presidential campaign.

    Have you ever seen a "what's good for Pac Man is good for the game" cheat?

  • In 1998, or 99, Compaq bought out DEC in order to get the rights to the Alpha chip, and then didn't know what to do with it once they owned it. The already dwindeling VMS operating system became less popular as a result. Compaq directors needed to get out from under a badly handled situation, so they found a sucker.

    HP finds its printer division doing very well and its computer devision growing too slowly, so they take the money from one and sink it into Compaq. It could work out well for HP, if and only if, they use the Alpha technology to their advantage. The desktop devision sucks anyway, and should not be considered as HP's salvation.

    Tune in next week when . . .
    • It could work out well for HP, if and only if, they use the Alpha technology to their advantage
      I believe that Compaq already transferred all the patents, design information, and engineers (those who didn't jump to AMD) for the Alpha chip to Intel, where they no doubt joined HP's former PA-RISC team sitting in nice new cubicles, cashing paychecks and staring out at the parking lot while rereading their no-compete agreements.


  • by alispguru ( 72689 ) <bane&gst,com> on Wednesday March 20, 2002 @10:17AM (#3193725) Journal
    The whole HP-Compaq merger thing is a typical example of how high-level executives who understand "business" think:

    - They have to "do something" to justify their compensation.

    - They don't understand the technology, so they don't have a clue as to how to make use of the innovations their employees generate (Xerox comes to mind immediately, but they're just the most obvious example).

    - They do understand high-level finance, and how to fire people to create short-term gains.

    So, they do what they understand - move big pieces around on the board, construct complex financial objects that obscure the connection between their actions and company performance, and fire people whose functions are superficially redundant.
    • Cringley wrote [], back when the merger was first proposed, that this merger came about for one reason and one reason only : it bought Carly Fiorina another 18 months to two years at the top of HP, which she otherwise would have lost for having basically not produced a damn thing in the way of profit or improvement during her time there.

      Compaq was at a desperate dead end, and Carly Fiorina of HP wants to keep her job. Buying Compaq effectively resets the shot clock, buying her another 18 to 24 months before the HP board gives her the boot. This whole $25 billion deal is about executive ego. No other explanation comes even close to making sense.

      I'm inclined to agree...

      • History does have a sickening way of repeating itself...

        I was working for Digital (remember them?) when they were bought by Compaq. I remember all the same justifications being touted back then -- "The combined company will be the #2 computer maker after IBM" and all that.

        After a while, the truth of the matter became abundantly clear: the "synergy" was that Digital was hurting bigtime, while Compaq's CEO was facing serious questions as to his effectiveness. Hey presto! Let's merge the two companies! Doing so bought time for those parts of Digital that survived, and also bought time for Eckerd Pfeiffer. Any problems that the combined company faced could be attributed to the turmoil of the merger.

        After about three years, though, the merger stopped being a viable excuse. Compaq faced increasing problems with profitablility and market share... kind of like Digital a few years earlier. Along comes H-P, whose CEO is facing serious questions as to her effectiveness... sound familiar?

        I bailed out of Compaq shortly after the merger was announced. For my part, having gone through one round of merger turmoil, I was not eager to go through another (though said turmoil would have been a great excuse to slack off and do jack for a couple more years).
  • Cluster Trouble (Score:2, Interesting)

    by Anonymous Coward
    This could cause serious fragmentation of the Beowulf clustering market.

    For a long time HP have been pushing their Wolverine Extensions (much to the dismay of clustering gurus). With the might of Compaq behind them they'll have the impetus to succeed.

    Although, on the bright side, it brings Windows into the Beowolf fold.

    Guess we'll have to learn that API now!
  • by OmniGeek ( 72743 ) on Wednesday March 20, 2002 @10:26AM (#3193758)
    I have a pitiful few shares of HP stock from my time there, and over the past few months, I've received an absolute torrent of competing proxy solicitations from the HP board and Walter Hewlett. Every week, I got at least one new proxy card from each party with a "send this in Right Now" letter. This stuff arrived faster than one could conceivably respond (and even though I'd promptly returned the first green proxy card I got...) Towards the end, the HP board even priority-mailed me a prepaid Fedex envelope with another proxy card, and shortly thereafter a premetered ($3.50) priority-mail envelope. Last, and IMHO rather underhandedly, the board set up a phone-in-and-vote-your-proxy process during the last three or so days, something they would NEVER have let their opposition get away with. UN election monitors would NOT approve...

    Also worthy of note is the tone of the cover letters: the Walter Hewlett "anti" camp focused on the bad business sense of the merger, but the Board quickly started a series of personal attacks on Walter Hewlett. This did NOT impress me with their confidence in their case: when you run out of logical arguments, slander your opponent's person.

    It ain't over 'till the fat lady sings, and there is NO reliable way to guess who'll still be standing to deliver that final aria. The tons (literally!) of proxy cards sent in to the warring factions' accountants must be sorted and matched by sig and date to weed out proxies revoked by subsequently-sent proxies (and since so MANY cards were sent out, there'll be hundreds if not thousands of revotes); this will certainly take a week. Also consider (shock horror!) the possibility that the electronic or telephonic proxy-submission processes might have been manipulated. Carly's no Ken Lay, and it sure ain't the HP Way, but there's a LOT riding on this (several top management jobs, for example), so the possibility of skulduggery is NOT to be ignored.
    • I also am a small time HP stockholder and I was amazed at the amount of money both sides put into campaigning. I must have gotten dozens of letters, proxies (white and green), and phone calls about the merger. It sickens me that the company would spend its revenue (i.e. my dividend dollars) campaigning so that a few execs can get big bonuses. That is one of the reasons why I voted against it.

      It doesn't seem smart to me that the company should want to get into the low-margin business of commodity PC's. Besides, Compaq and HP have such a poor track record with mergers (i.e. DEC and what they did to the Alpha chip) that I am very skeptical that this one will work.

      I think it may be time to get out of HP (if it isn't too late already).

      • You know what will sicken you even more? Even if the merer does NOT go through, HP has agreed to pay Compaq 600 million dollars for any damages caused to brand recognition. Add that to all the trade secrets that have been shared, and that's a lot of money wasted, either way.

    • Your experience was shared by a woman commenting ont he merger on last night's MArketplace radio program. She said she wavered many times, but her final decision was based on Fiorna's public mudslinging and the way she conducted herself in public.

      Of course she said it just wasn't the "HP way" of doing things.
  • HP laser printers with PostScript are first-rate. HP computers and their non-PostScript inkjet and multifunction line are what will spell doom for this company. The merger will only add more weight to their sinking business model.

    Why merge with another computer company that does the same thing HP does in terms of PC design? HP and Compaq workstations are among the most proprietary PC designs around, making tech support a nightmare (I've handled both and still have shakes when I think of it).

    HP has also stiffed me personally with crappy hardware--the OfficeJet multifunction printers have abysmal drivers that causes my computer to hang routinely, and the firmware of the printer is very faulty and wastes my time by giving off false hardware errors.

    If HP thinks that a simple merger will help them, they are wrong. HP needs to concentrate on what they do best--and computers aren't it. How about an inexpensive PostScript printer that doesn't require an engineering degree to print one damned page?

    I find Carly's determination admirable, but her goals are very suspect. HP is going the wrong way, and its too obvious.
  • by A_Non_Moose ( 413034 ) on Wednesday March 20, 2002 @10:36AM (#3193813) Homepage Journal
    In addition to the Compaq merger, HP also plans to merge with Intel and UPS.

    No comment was give to queries if the resulting company would be called Hic-UPS.
    • Reminds me of a joke I heard was going around NCR when AT&T was buying them up.

      I heard someone posted a corporate logo for the new combined NCR/AT&T as a joke at NCR Headquarters. The logo was a combination of the AT&T Deathstar and the NCR logo (which nobody here probably recognizes). Under it was written the new name for the company:

      CRAP - Cash Registers And Phones

  • Read [] or better yet Listen / Watch the stream @ DDJ technetcast []

    Hewlett-Packard Company Chairman and CEO Carly Fiorina discussess the current course and what's ahead for Linux in enterprise and consumer applications. Ms. Fiorina highlights innovative solutions that customers are implementing today and talk about the contributions and responsibilities of the Linux and open source communities in increasing customer value for Linux users.

    The end of Ms. Fiorina keynote speech is worth repeating here...

    demand for linux

    The company that brought us the green ogre with the thick Scottish accent and wicked sense of humor wants Linux. Companies that provide the dial tones when we pick up the phone want Linux. And in between the two are thousands and thousands more who are recognizing the power, the flexibility and the smart economics inherent in this platform - and who are attracted to its openness and the inventive spirit that is at its foundation.

    We cannot disappoint customers who are clamoring for Linux solutions. Standing still is not, and will not, be our legacy - with Linux, or with any other invention that has the potential to transform this industry, as we certainly believe Linux does.

    Which brings me to what I see as the real power of the Linux movement.

    The secret to its success is based on a belief in what hundreds of thousands of inventors can do together when you make full use of their talents. And here again, just like all the other great inventions that came before it, like all other great steps forward, the skeptics out there said: It won't work. It won't sell. It can't be done. It won't succeed.

    Your collective response: Never underestimate the power of a good idea.

    • Compaq, HP, IBM, SGI all claim they are for linux and want to develop it. This is just bullshit. I talked to people (directors, VPs, ...) of all these companies and they just want to sell two things: 1. Machines with whatever system but preferably their own (HPUX, AIX, ...) 2. Services.

      IBM is the worst of the lot. They have small groups working on linux, but not one sales person will sell you Linux. It's AIX, AIX, AIX.

      So don't believe the hype!

  • by pkaral ( 104322 ) on Wednesday March 20, 2002 @10:45AM (#3193852)
    Anyone else think the business world looks like a game of Pac Man?

    It's pure math, really. There is a significant, steady stream of new businesses being created, even if you only count the ones that make it past the infancy stage. Additional ones are being created buy spin-offs/spin-outs/demergers/whateveryoucallits.

    In a country with a relatively stable population, this can only mean one of two things: Either the average size of firms must be decreasing, or a number of firms must be disappearing. The strongest of these two factors will of course be the latter. Given that the two ways in which companies can disappear are bankruptcies/liquidations and mergers, you could say that mergers are good. Even if a merger is followed by layoffs etc., a company remains to pay severance packages and face other liabilities. Furthermore, a merger is usually less wasteful than closing a company, as valuable assets such as brand names are more likely to be preserved.

    In a dynamic world with quick changes in technologies and customer preferences, continuous restructuring is necessary and desirable. Mergers are important mechanisms of such restructuring, alongside entrepreneurship, bankruptcy, strategic alliances etc.
  • Carly and the Merger (Score:4, Interesting)

    by Quill_28 ( 553921 ) on Wednesday March 20, 2002 @10:55AM (#3193891) Journal
    I have friend who used to work at HP and still owns stock. Two things he says:

    1. a. He is not for the merger
    b. Does not have a single friend who is for the merger
    c. Does not have a single friend who knows
    of another co-worker who is for the merger

    2. a. He does not like Carly
    b. See 1b
    c. See 1c

    Too bad to see a company run by engineers now being led by a history major(i think).

    For what it's worth.
    • by Karza ( 473438 )
      This is also in line with what I have heard from from friends who work with HP as well. I find it interesting to take this and bring it in line with what happened with Enron. Most financial analysts advise you to diversify your holdings and not put your eggs in one basket. In the case of Enron, because employees were so heavily invested in Enron stock, their financial futures were tied to the success or failure of the company. On the flip side, the HP employees who may have exercised their options and subsequentially sold those options to better protect their long term financial future, put themselves at the mercy of institutional investors who, have a larger stake in the company but do not have their livelyhood directly tied to the success or failure of the company.

      Now, I'm not arguing that people "shouldn't" diversify their porfolio's. However, it is an interesting "catch 22" that employees face.

      Of course, the "intelligent employee" will not put himself in this situaiton. As one of my managers explained it to me when I got my first job:

      "Your career isn't your job, your career is your skills. Never sacrifice the latter for the former."

      The best piece of advice anyone has ever given me. (Well, OK, maybe it's second to my mom telling me to stop playing in traffic. ;) )
  • Economics (Score:3, Interesting)

    by PhoenxHwk ( 254106 ) on Wednesday March 20, 2002 @11:16AM (#3193989) Homepage
    The reasons that this merger is just fine with the government are pretty simple. There's a measure for each industry called the Herfindahl-Hirschman Index. If a merger doesn't make this number go over a certian boundary, it's all good. HP and Compaq are in an industry that is diversified enough to handle a horizontal merger like this one.
  • by Ars-Fartsica ( 166957 ) on Wednesday March 20, 2002 @11:28AM (#3194049)
    This merger, once inevitably complete, will create an astoundingly mediocire entity that will likely lose in equity the entire purchase price of the acquisition.

    I agree with Carly that HP is in need of major repair - the HP way, though laudable, represents a bygone era that simply can't be applied to modern business. That said, combining HP with another model of mediocrity, Compaq, in a hope to eek out savings-through-scale in the cut-throat, low-margin hardware business is simply not going to increase value.

    These companies will spend at least two years properly integrating, during which time Dell and IBM will continue to lead, and in fact increase their leads in hardware and services. After the dust has settled on the two year merger process, the new HP will simply make its quarterly numbers by cutting staff and relying on long-term contracts in its traditional 90% of the other mergers of the recent past.

  • What I've noticed is that every time companies merge, service gets worse, people get laid off and products plunge in quality.

    I don't understand this weird business romance thing. It's almost impossible to glue together two very different corporations, especially if they are billed as a "merger of equals" where people don't get hurt.

    People do.

    I think 95% of the mergers that occur are shameful failures.

  • Are either of the families planning on voting with their stock (by selling)?
  • The promise of a greater chunk of the market seems to appeal to many H-P shareholders. Of course, the fact that that market is rapidly becoming commoditized seems to have been overlooked (at least, by half of the shareholders). I'll bet the ones who voted against the merger will be plenty pissed if it goes through.

  • by Decimal ( 154606 ) on Wednesday March 20, 2002 @02:27PM (#3195213) Homepage Journal
    45% For
    44% Against
    11% Buchanan

    Damn that butterfly ballot!
  • Shitbrick (Score:3, Interesting)

    by Graymalkin ( 13732 ) on Wednesday March 20, 2002 @03:59PM (#3195851)
    There's a funny thing about proxy votes. The more stock you own the more your vote means. Also, because this is a proxy vote the proxy has a mini vote and the majority choice is cast as a single vote from the proxy. If you've got 100 people behind a proxy and 40 vote against the merger, the proxy vote will be one for the merger. Add up enough proxies and you've got a sizable number of people voting against the merger. Fiorina is declaring victory far too soon in my opinion and according to most of the business papers I've been reading the opinion of many.

    I don't get the projected numbers Fiorina has been throwing in everyone's faces. In all honesty she wants Compaq for production lines, some IP, and retail contracts with most notably Radio Shack. Between Radio Shack and WalMart Hewpaq would have a pretty big retail presence. Not everybody has a Best Buy, CompUSA, or Circuit City within an hour drive. They probably however have a RS or WalMart within an hour drive. If people are interested in a PC, retail chains are where they head to. However unlike the 2 + 2 = 5 numbers Fiorina is pulling out, HP and Compaq would not be expanding their markets. They would just consolodate shelf space. This doesn't lead to higher growth.

    HP has gone from a company that actually progessed the state of technology to merely a competitor to Dell for presence on the desk. In the short term with decreased competition in retail space from Compaq, HP will do well. In the long run when the retail chains Hewpaq relies on start doing poorly they are going to suffer severly. In the said areas where HP and Compaq are prevelent, for some the only two choices, the market is going to become saturated very quickly due to the lack of demand. Sales of both companies' systems are already low, merging would just mean they would be collectively low even if their overall market penetration was greater than that of IBM. It's also funny how HP has twenty billion to spend on the Compaq merger yet needs to lay off 15,000 people. Next to go from HP will be their printer business at which point Dave Packard and Bill Hewlett will lead an army of zombies and demons out of Hell into Cupertino to make off with Carly and her minions.
  • I hope this sends a message to the Hewlett and Packard families that they've lost control of the company that bears their name. "The HP Way" (a trademark stolen from one of the cofounders) hasn't existed at Hewlett Packard for years now.

    I voted for this merger because I'd much rather see Walter Hewlett resign from the board of directors and the Hewlett and Packard families start pulling their money out of this lost cause. Plus they'll lay off some 5 million more workers some of whom will find new jobs at companies that are doing good in this world. Hopefully HP will be so kind as to call the new company "Compaq".

    - A former employee of the now closed HP FPK facility (no I wasn't laid off).

  • Maybe now they'll upgrade my Compaq to an HP? Wouldn't that be nice?

    Anything's an upgrade compared to a Compaq. Maybe that's what Compaq's head honchoes realize: they are upgrading!
  • Anyone else think the business world looks like a game of Pac Man?

    More like a game of Snake...

As in certain cults it is possible to kill a process if you know its true name. -- Ken Thompson and Dennis M. Ritchie