Compaq weighs CEO, AltaVista
issues
By Dawn Kawamoto
Staff Writer, CNET News.com
June 24, 1999, 1:00 p.m. PT
Compaq directors will have a full plate of issues to consider today when
they meet, from who will reign as the next chief executive to giving CMGI
a controlling stake in its Web portal AltaVista.
"Most board meetings are boring. You authorize which auditors to go with,
discuss the budget, and sometimes talk strategy," said Lou Mazzuchelli, a
hardware analyst at investment banking firm Gerard Klauer Mattison. "This
will be an interesting meeting."
He noted, however, that most of the difficult work has already been
hammered out by the company's CEO search committee and executives who
oversee AltaVista's strategy.
Philip Rueppel, an analyst with BT Alex
Brown, agreed the Compaq Computer
board meeting is likely to be an
interesting event.
"It's interesting from my perspective that
the two issues [CEO search and
AltaVista] are concurrent," he said. But
Rueppel added: "If a company is doing
poorly, their plate is usually full, and
Compaq fits into this category."
Compaq has indeed struggled recently.
The company says it expects to post
back-to-back quarters in which its
earnings will take Wall Street by surprise
with disappointing results, the
company's sales have been sluggish,
low-cost PCs have cut into profits, and a
high cost-structure have taken a toll on the computer maker.
These events led to the ouster of then-chief executive Eckhard Pfeiffer last
April and the subsequent search for his replacement. Board members, who
have yet to receive a short list of candidates from the search committee, are
likely to get a glimpse of potential candidates today. And industry watchers
anticipate an outsider will soon be selected.
One name often mentioned in CEO searches is George Fisher, chief
executive at film giant Kodak. Fisher, who has experience running a Fortune
500 company and background in the tech world having worked at Motorola,
is planning to step down from his CEO post at the end of the year.
Meanwhile, the Wall Street Journal is reporting that John Zeglis, president of
AT&T, and Gregory Brenneman, Continental Airlines president, are the front
runners for the Compaq spot.
Although Paul Otellini, general manager of the Intel Architecture Business
Group, has had his named bandied about as a potential Compaq CEO
candidate, sources say it's unlikely.
Intel sources say Otellini wants to stay in California and may be a candidate
for the vacant CEO position at Hewlett-Packard.
In the interim, a three-member group of directors is handling the day-to-day
operations of the company. During this period, a host of changes have taken
place, from an announced re-organization of business units, a management
exodus that has seen more than a half dozen executives depart, and, of
course, the potential sale of a controlling stake of AltaVista.
"Traditionally, the board doesn't get involved in micro-managing a
company. They rather tend to look at whether management is accomplishing
the goals of the company," Rueppel said. "It's been interesting to see how
the interim committee has made such strategic decisions."
This interim group, for example, appears to be reversing an earlier
announcement in January to spin off AltaVista in an initial public offering.
"The deal is probably being driven by CMGI, more than the Compaq board,"
Mazzuchelli said. "But I think it's a good thing that they're looking at
doing this and focusing on their core business."
He added that despite operating under a full plate of issues today,
the task should not be difficult in taking up one weighty issue,
holding a discussion, and then moving onto the next. Mazzuchelli
also noted that the board is a fairly homogenous group.
News.com's Michael Kanellos contributed to this report.
Related news stories
• Compaq, CMGI confirm AltaVista talks June 24, 1999
• Compaq board may get CEO short list June 23, |
