HP Soap Opera Nears Close

Tester's Choice: The most interesting part of the proposed HP-Compaq merger is the lack of real issues being thrown around by the participants.

With the March 19 voters deadline on the HP-Compaq merger approaching rapidly, the technology worlds most interesting drama is coming to a sad close for ad execs and journalists (myself now included) who have benefited from the entertaining mudslinging.

To me, the most interesting part of the whole confrontation is the lack of real issues being thrown around by the participants or covered by journalists.

Walter Hewlett is having a grand time slinging mud at Carly Fiorina and Michael Capellas over the $100-something-million they will split in the event of a merger, but who really cares? I doubt that either Carly or Michael will end up hocking their valuables in a Bay Area pawnshop if this merger doesnt happen.

Why attack the CEOs? The meat of the argument against this merger should be that Compaqs previous big transactions are candidates for the merger-and-acquisition hall of shame. Lets face it: The newest MBA textbooks in use at institutions of higher learning around the country are NOT referring to Compaqs mega-acquisitions of Digital and Tandem in very favorable terms.

Does the merger of HP and Compaq give them the inside track on the lucrative services industry? Unless IBM Global Services suffers a couple of "Andersen moments" and continues to run those ridiculously stupid TV ads, I seriously doubt its dominance will be challenged in the near future.

Does the merger make HP-Compaq the No. 1 storage vendor? I dont think so: not unless it has the vision to use the money it recoups from merging its server divisions to identify and acquire promising startups, while using the rest of the funds to ramp up R&D to stay ahead of the technology curve.

The consolidation of divisions will be a nasty and painful procedure, which is something Compaq folks know all to well. Whos to say that when the dust settles, the best talent wasnt accidentally swept out with the dregs or lured away during the merger?

There is only one day left until voting. Its time for the bigwigs to show us how their leadership will teach the two-headed Compaq-HP monster how to do new tricks.

Senior Analyst Henry Baltazar can be contacted at [email protected]

For more on HP-Compaq, check out eWEEKs special report, "HP Courts Compaq."