Salah:
A very interesting interview for COMPAQ kremlinologists. I particularly liked this exchange:
_________________________
Q: Compaq's former CEO, Eckhard Pfeiffer, has said that the company's strategy is no different under the new management team. How do you respond?
A: No, we didn't change absolutely everything the company stood for. There's certainly a lot more clarity. We still have a ways to go.
_____________________
Would you say the answer was as clear as the question?
Actually EP did not say that - he said nothing had changed except the de-emphasising of the internet which came about as the result of selling Alta Vista. Capellas' implicit reply to that is given earlier in the interview. The interviewer points out that COMPAQ is perceived to have a weaker, less rounded approach to the internet than other companies because it is all hardware. Capellas answers that the 20% CMGI holding makes up for that. Apparently I am not the only one who thinks this answer is less than convincing. There is a world of difference between owning shares in a bunch of internet companies third-hand (however well they do on the market) and having a powerful operational presence on the internet through the control of a major portal and search engine, which itself will multiply many fold in stock market value when it is floated.
The response often given on this board, that COMPAQ wants to concentrate on its core competencies is undermined by Capellas's enthusiasm for taking COMPAQ into all kinds of new consumer product lines - including some it will not design or manufacture itself - but to which it will lend it's brand name.
It is getting interesting - I am not sure all this is logically consistent, but I am only here to make money.
From the interview I also get the feeling that Capellas is growing in confidence about next year from 2Q on, but he is still giving backhanded cautions about 4Q and possibly 1Q. Services are not growing fast enough, still showing potential rather than performance. And the de-emphasis on PC's suggests that he does not expect commercial PC's to show a profit. The market research news today suggests that servers may be weak and revenues on consumer PC's may be weak, also.
I have a feeling he will be relying on cost-cutting and I hope there is more progress there than has been reported so far. And he can always fall back on the tax credits.
Once again he made promises of several announcements including one with a telecom. I hope he is not painting himself into a corner with all these promises of big announcements. Market optimism is starting to bubble and he could prick it rather badly if he fails to deliver.
Ps. I wonder if he tunes into SI and this board on one of those two monitors on his desk? |
