HP-Compaq merger on the road to nowhere

AN ARTICLE in Red Herring magazine called "Carly is running on fumes" claims that only a month or so after the merger between HP and Compaq was completed, the firm is backtracking on the benefits of the move.

The piece claims that the addition of Compaq to the HP portfolio, rather than aid the body corporate, is dragging down the new giant, with commodity PC and other business now accounting for 31 per cent of the firm's revenue.

And it adds that a verbal shift to the term "synergy" called "cost synergy", means that rather than both companies benefiting from the union with new ideas, it just means more jobs will be lost and 10,000 folk will lose such jobs by November of this year.

While HP and Compaq as separate firms might have earned as much as $4.7 billion in 2002, the merged firm might only scrape $2.6 billion of earnings in 2002.

The author says that after Fiorina joined HP after a less than brilliant stint at Lucent, she spent much of her time swanning around the US with a bodyguard in a Gulfstream jet giving "happy talk" speeches.

You can find the entire diatribe here. µ