It’s a black and white picture of a gray box, with a series of knobs stuck on the front of it. The caption describes it as an audio oscillator called 200A — the very first product ever offered by Hewlett-Packard (price: $54.40 each). “”What if
we had stopped here?”” the headline asks.
The photo is the centerpiece of VotetheHPWay.com, the company’s online plea to the world at large to support its controversial US$22 billion merger with Compaq Computer Corp. It is easily one of the best-designed pages in HP history, a company known for burying product information and pricing in its other Web sites. Surrounding the photograph are links to shareholder letters, SEC filings, and point-form lists of reasons why the companies believe the deal is a good idea. Additional whitepapers (with titles like “”The Case for Change””) are supplemented by sign-up window for a special merger e-newsletter.
The image of the audio oscillator, however, and its headline, offer a clue to the dilemma which has faced HP and Compaq since announcing their plan on Sept. 4, 2001. No one is asking what would have happened if they had stopped with that first product. They’re worried about the many products which followed, some of the hits (like HP’s Unix servers) and some of the misses (the Jornada PDA, which would be better off replaced by Compaq’s iPaq). How frustrating for someone like HP chief executive Carly Fiorina to be charged with articulating a vision of the future but forced to do it via a picture from the past. It does not make for the most convincing argument, and it is obviously a stand-in for whatever details she will unveil if and when the shareholders vote in her favour on March 19.
I think they will. On March 13 the two companies got their biggest endorsement yet from Putnam Investments, a large institutional holder of HP shares. Advisory firm Institutional Shareholder Services has also thrown its considerable weight behind the partners and has recommended the merger to its customers. There are still loud voices of dissent, of course, and many of them, like Walter Hewitt, are waging persuasive campaigns of their own.
It’s anyone’s guess at this point. Last week I had what I thought was a great idea for a way we could cover this story: we would phone a number of Las Vegas casinos and see what the odds were. They’re always placing bets on Super Bowl games and the winner of the next “”Survivor,”” I reasoned: surely this deal has attracted enough attention that it would be worth a wager. After several phone calls, though, it seems no one is willing to put down their money.
A better question for VotetheHPWay might be, “”What if it stops here?””, meaning the merger. The shakeup within HP’s management, the difficulty for the two firms to compete against IBM on services by themselves, and the dwindling PC market all conjure up a far scarier scenario than that of arrested development with the audio oscillator.
Though she can’t provide the details that would make everyone feel better, I think the actions of Fiorina and her team speaks louder than words. In the past week alone the firm has held conference calls and countless meetings where they have tested the limits of how much they can talk about the long-term outlook for the merged company. They have continued to compete independently and have launched products that take advantage of the latest technologies. They are trying hard, and if this zeal is any indication of the work ethic to come, we may be glad HP-Compaq had to fight so furiously so earn their shareholder’s trust.
