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What happened to HP?

Fatal turns ahead
Fatal turns ahead

Remember when HP was a king amongst kings in the tech world? Your first laptop was probably an HP Pavilion. If you're old and wealthy enough, your first smartphone might have been an HP iPAQ. HP helped to pave the way for many of the devices we carry around today.

HP wasn't just a beacon for nerds. They made technology cool. Who can forget the intriguing collaboration between the computer manufacturer and rap icon Jay-Z in 2006?

For many, the HP brand elicits warm, fuzzy feelings of gleeful nostalgia. Kind of like Gateway.

Six years ago, the idea of Hewlett-Packard splitting up would have been ludicrous. Three years ago, it was the rumor de jour of the tech world. Today it's an ongoing reality.

Silicon Valley's original technology company is dividing in two as a part of the company's five-year plan to recover from years of disappointing quarterly reports. The company will be cleaved into two new companies, HP Inc. and Hewlett-Packard Enterprise, by the end of HP's 2015 fiscal year.

Like many mature companies with long histories, HP has had many ups and downs over the past 76 years. While it is impossible to definitely say that any single factor caused HP's decline, market forces, internal strife at the company and decisions (and indecisions) about acquisitions and potential spin-offs are among the factors that led HP to its current state and eventual split.



The upcoming HP divide is not the first in the company's recent history. HP spun off its Medical Products and Instrument Group to form Agilent Technologies in 1999. The latter's Initial Public Offering (IPO) broke records for a Silicon Valley IPO by raising $2.1 billion during the dotcom bubble.


HP acquired Compaq for $19 billion. The move is criticized throughout the technology markets as a potential mistake.


After the bubble burst, HP was impacted by the resulting recession of the early 2000s. HP's stock lost about half its market value by the time the company's Board of Directors forced then CEO Carly Fiorina to resign in 2005. After about a month under an interim CEO, Mark Hurd took the helm as HP's CEO.


Hurd remained in the CEO position for about half a decade. During that time, HP acquired Palm, providing the company with many patents and the webOS, a mobile operating system.

Five years of revenue gains and a hefty increase in stock growth over this period helped lead the technology firm into a brighter era. In the annual report for HP's 2009 fiscal year Hurd wrote, "Over the last five years, HP has become a much more agile company, able to adapt and benefit from changing market conditions. In fiscal 2009, we gained share in key markets and continued to invest for growth in research and development, acquisitions, and sales coverage."

But it did not last. Hurd was accused of sexual harassment. While he was cleared of wrongdoing for that accusation, Hurd was found to have submitted false expense reports to hide a relationship. Hurd's friend and now-former Oracle CEO Larry Ellison compared it to when Apple forced Steve Jobs to resign in an email sent to The New York Times.

Léo Apotheker, a European technology executive with experience in software companies, succeeded Hurd as CEO. Analysts lowered their forecasts for HP under his brief tenure of 11 months. The company's stock fell 47% during his time as CEO.