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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (51617)	9/6/2001 4:07:44 PM
From: michael97123	Respond to of 70976

Only positive about this story is that the HP/CPQ crystallized current state of things and gave us the last??leg down. September 5, 2001 H-P "jumps the shark" Why investors fled screaming from the specter of Hewlett-Compaq-ard By David Futrelle TV mavens call it "jumping the shark." When producers of long-running shows run out of decent ideas to keep their story lines moving forward, they resort to desperate gimmicks: They bring in a baby (as in Mad About You). They move the cast to a new city (Laverne & Shirley). In the case of Happy Days, on a trip to California, Fonzie -- on waterskis -- jumped over a shark, a crass grab for ratings that, in the eyes of some fans, marked the beginning of the end for the cult of the Fonz. (For more great TV blunders, check out jumpingtheshark.com.) Well, Hewlett-Packard and Compaq chose a much more conventional gimmick to perk up their saggy ratings: They decided to get married (hey, look what it's done for Friends), announcing late Monday the $25 billion deal. Announcing the move in a letter to Hewlett-Packard employees, CEO Carly Fiorina warned that competitors would "use every chance they can to discredit" the deal. Actually, competitors didn't need to say a thing -- this is a deal that seemed to discredit itself. On Tuesday, Hewlett-Packard shares sank nearly 20 percent and Compaq fell 10 percent. On the message boards, critics greeted the merger news with derision ("HOW DO U SPELL STUPID = CARLY FIORINA," wrote one non-fan). Analysts were more polite, but most were equally dismissive, doubting the ability of two such massive firms to quickly and efficiently merge into one, especially given their track records. Compaq's acquisition of Digital Equipment Corporation in 1998 wasn't exactly considered a raging success. Meanwhile, Fiorina has had a tough time managing Hewlett alone, regularly coming in under quarterly estimates. It's hard to see how managing a company twice H-P's size will be any easier. And even if these "integration issues" get worked out (and regulators in Washington and Europe step aside to let the deal go through) the merged company will still have to struggle to compete against an assortment of tech giants from Dell to Sun to IBM. Sure, the combined company may be able to cut costs -- most notably through the proposed layoff of 15,000 workers. And sure, the merger will create a massive tech monster, nearly the size of IBM in terms of total revenues, with a commanding presence in PCs, servers, printing, and services. But in the tech world the biggest isn't always the best. While the merged company would be the biggest PC seller in the world, being number one is cold comfort if the business remains, as it has recently been for both companies, unprofitable. In her letter, Fiorina urged H-P staffers to "stay focused" in the months ahead. With a messy merger looming, layoffs coming and the company's stock in the toilet, this may prove hard to do. We can only hope H-P and Compaq's proposed marriage doesn't end up on the Jump The Shark web site alongside the painfully tacky couplings of Lois and Clark and Mork and Mindy.

To: michael97123 who wrote (51617)	9/6/2001 4:15:52 PM
From: Sun Tzu	Read Replies (3) \| Respond to of 70976

Bad news?! Only if you hold CC :) BTW I was there last night and were amazed at how low the prices have come. Sadly, the digital camera that I'd like is still around 2k so I have to stick with my SLR for another 3 years. On another note, NSM had this to say today, "The recent improvements in bookings suggests that the worst may be behind us,'' said Chairman and Chief Executive Brian Halla. ``But it is still premature to say that broad-based demand is returning to normal levels...Of the top 15 customers, all but one personal computer and automobile industry customer improved orders during the quarter" Now let's see what Intel has to say...I may have to cover most of my shorts if that news is good too. ST