http://money.cnn.com/2004/12/07/technology/hp/index.htm?cnn=yes

Fiorina: HP talked about splitting up

Company discussed breakup scenarios three times but has no current plans to
revisit the idea.
December 7, 2004: 3:08 PM EST

NEW YORK (CNN/Money) - Hewlett-Packard CEO Carly Fiorina said Tuesday the
company had seriously considered breaking up on three separate occasions
but each time decided against it.

An HP spokesman said Fiorina made the remarks during the company's analyst
meeting in Boston. Fiorina did not give a time frame on when the
discussions took place, the spokesman said, adding that the company has no
current plans to revisit the talks.

Fiorina's remarks did little for the stock Tuesday. Shares of HP
(Research), a Dow component, edged lower in afternoon trading.

Several analysts have called for HP to break up into two companies
following its merger with Compaq in 2002.

Most recently, Merrill Lynch analyst Steve Milunovich suggested in a report
in June that HP should either spin off its lucrative printing and imaging
business into a separate company or split HP into two firms, one focusing
on consumers and the other on corporations.

The HP break-up news comes as one of HP's top competitors, IBM, is looking
to scale back in the PC business. According to published reports, IBM is
seeking to sell the majority of its PC division to Chinese PC maker Lenovo
Group.

HP, like IBM, has struggled in recent years to make a profit from selling
PCs due to intense competition from industry leader Dell and other
suppliers.

Dell and HP have been fighting for the top spot in global PC market share
since HP completed its merger with Compaq. But Dell has been far more
profitable in the PC business.

But HP still makes the vast majority of its money from its cash cow
printing business and has also made inroads in more profitable tech
services of late. So some analysts have expressed hope that HP would focus
more on these divisions.

HP has also been trying to sell more storage devices, servers and software
to large corporate customers and the company has cited some improvement in
its so-called enterprise business lately. Fiorina said during the company's
fiscal fourth quarter conference call last month that the business was
strengthening heading into the end of the year.

As such, calls for a break-up of the company have died down a bit lately.
Since HP posted better-than-expected fourth quarter results in November,
the stock is up nearly 10 percent.

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