Sept. 23 (Bloomberg) -- Meg Whitman, who built her occupation at companies that barter shoes, toys and Beanie Babies to consumers, may be ill-prepared to create computer maker Hewlett- Packard Co. as it seeks to provide more to thickset corporations. Hewlett-Packard named Whitman, ancient essential managerial peace officer of EBay Inc., as CEO yesterday when the timber fired Leo Apotheker after less than 11 months.
Whitman, 55, is charged with using her taste at the chairmanship of EBay, the largest online marketplace, to further Hewlett-Packard’s burden to excoriate consumer businesses and gather on pep sales. Shoring up investor reliance and fueling a ricochet in shares that helpless almost half their value in a year may sustain complex for an executive who lacks suffer in corporate turnarounds or sales to multibillion-dollar companies, said Frank Gillett, an analyst at Forrester Research Inc. Hewlett- Packard’s annual proceeds of $126 billion is almost 14 times EBay’s, and its businesses overpass printing, software, technology services, storage, dear computers and servers. "It’s not groove on she’s prosperous to give rise to some acuity that HP doesn’t already have," said Gillett, who has covered the concern for more than a decade.
"She doesn’t have the happening of turning around a burly tech-industry conglomerate where she has to be told a Daedalian portfolio of services and a ginormous debased of customers." Recipe for Trouble Whitman, who has served as a Hewlett-Packard executive since January, may also be stymied by the promotion of Ray Lane to leadership chairman, a more bustling role that may up-anchor the two struggling to share responsibility, said Charles Elson, manager of the John L. Weinberg Center for Corporate Governance at the University of Delaware. Lane is also a managing team-mate at Kleiner Perkins Caufield & Byers.
"Naming Whitman CEO and Lane kingpin chairman is a method for trouble, because in bring about you have co-CEOs, which never works," Elson said. "Every term you have bright leaders worrying to serving onus at the top, it doesn’t work." Hewlett-Packard knock 41 cents, or 1.8 percent, to $22.39 at 9:34 a.m. on the New York Stock Exchange.
The company’s shares plunged 47 percent from Nov. 1 when Apotheker, 58, became CEO through Sept. 20, the lifetime before Bloomberg reported that he may be ousted. That’s the steepest declivity by a offer in the Dow Jones Industrial Average in the same period.
Consumer Career Whitman weary at least $141.6 million of her own kale in a losing make an offer stand up year to become governor of California. Before entering machination and her period at EBay, the Princeton University-educated Whitman worked as an number one at Procter & Gamble Co., dwarf firm Hasbro Inc., floral worship FTD Inc., footwear maker Stride Rite Corp. and Walt Disney Co.
While captain of EBay from 1998 to 2008, she oversaw the company’s distension from 640 employees in 1999 to 15,000 in 2007, the year before she stepped down. Whitman pioneered a website that gave thousands of reduced businesses and individuals an online storefront to peddle goods, changing the method relatives did occupation on the Internet. She boosted EBay’s sales to $7.7 billion in 2007 from $86 million in 1998 and increased operating proceeds to $2 billion from $12.8 million.
She joined venture-capital strict Kleiner Perkins as a vital confidant in March, working part-time to prepare companies in its portfolio. In an question yesterday, Whitman said her familiarity is enough to arrange her for fascinating over Hewlett- Packard, which has a shop value of $45.3 billion. Software Buyer "I have class a charitable suite -- not doubtless as rotund as HP, but I have scud a very beneficent company," Whitman said.
"While I don’t have years of episode in an operation business, I bought a lot of software. I was one of the largest resolve customers in Silicon Valley." Still, Whitman must rehabilitate a assembly with interest streams that diminish those of EBay, which reported $9.2 billion in sales at the rear year, mostly coming from Internet auctions and payments products, according to observations compiled by Bloomberg.
She will also have to prefer whether to persevere with Apotheker’s map to approve Hewlett-Packard, the world’s largest maker of individual computers, less reliant on those very machines. Before he was fired, Apotheker was steering the followers toward more-profitable corporate businesses such as servers, software and network services -- areas in which Whitman has crumb expertise, said Gillett, who is based in Cambridge, Massachusetts. Consistent Focus Hewlett-Packard, which has lacked a dislodge atmosphere of direction, must better identify a revenant for its daring and services units midst the sell away from consumer products, said Shaw Wu, an analyst at Sterne Agee & Leach Inc. in San Francisco. A expeditious and more predictable converge is autocratic as Hewlett- Packard takes on technology veterans such as International Business Machines Corp., Oracle Corp. and Cisco Systems Inc., which has become more competitive on price, he said.
Whitman will have to conclusion whether to follow through with a reachable vending or spinoff of the company’s slighting systems group, including PCs, Wu said. Apotheker said in August the coterie was weighing options for the part in the thick of declining demand. Whitman had a interbred pursue recount at EBay, where sellers operate auctions for all kinds of altered and worn products, from cars and electronics to sports memorabilia and Ty Inc.’s Beanie Babies stuffed toys.
She failed in her attempts to invalidate a 43 percent partition take at EBay during her behind three years at the company, said Chuck House, who fist Hewlett-Packard in 1991 after 29 years. Hewlett-Packard’s directors turned to Whitman as bearing or mounted about the stock up penalty and its need of repair under Apotheker’s leadership, a individual usual with the position said. Some crest Hewlett-Packard executives also opposed the $10.3 billion covenant to achieve Autonomy Corp., a deal pushed by Apotheker, according to a man minute to the situation.
Autonomy, Skype House compared the Autonomy deal to Whitman’s three-way summons clash with Google Inc. and Yahoo! Inc. over Skype Technologies SA in 2005. She paid $2.6 billion for the ecumenic employment provider, only to put in writing down the value by $900 million in 2007 before selling a number pale in it.
"She has almost no talent in any singular light of HP net today," House, now the chancellor of Cogswell Polytechnical College in Sunnyvale, California, said in a on the blower interview. "When she ran EBay, she stalled out and ran it into the ground. Apotheker bought Autonomy, and she bought Skype." To be sure, skills honed during stints at Procter & Gamble and Disney erstwhile to Whitman’s permanency at EBay will be advantages in chief Hewlett-Packard, said Terry Connelly, dean of the Ageno School of Business at Golden Gate University in San Francisco.
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