Out of the Garage, Into the Office

With no more dot boom, HP's Garage Program finds a new home.

Hewlett-Packard says it hasnt closed its much-hyped Garage Program, it just found a new home for it.

Following the fizzle of the dot-com boom, the company last week quietly folded the year-old incubator program into its New Ventures organization, a Hewlett-Packard venture arm.

The Garage Program initially was strongly marketed with the nostalgic theme of creative invention, the trademark of HPs founders who worked out of their infamous garage.

"As we began to work with the Garage Program ... it became really clear that there was a tremendous synergy with the broad-based elements of the Garage Program coupled with some of the initiatives we were doing," says Greg Mihran, general manager of HPs New Ventures organization.

"Not only are we totally leveraging the Garage Program, but we have direct input into the course and direction," says Mihran, adding that no employees were laid off as a result of the fold.

Unveiled last March, before signs of the New Economys decline were broadly evident and dot-com incubators were still all the buzz, Garage was HPs strategy to harness the power of promising Internet startups that needed funding.

Extending HPs e-services strategy and doling out $2 million in funding to qualified participants, Garage currently has about 300 companies in its fold and recently added mobile wireless components to its overall strategy.

Meanwhile, HP has another initiative called HP Mobile e-Services Bazaar, which focuses on new technologies and allows participants to test and gain access to wireless solutions. "Theres so many things going on at once. Its very easy for a company [as large as] HP, for example, to have multiple programs that may or may not even be related or talking," says Mihran.

Garage co-founders and co-directors Lang-Anh Pham and Adrian Ott are still in charge of Garage under the New Ventures umbrella. Mihran adds.

Some analysts say HPs recent move makes sense. "Everyone wants to get in on the hottest startups of the future. Even if the market is not souring right now, a startup isnt expected to show a profit for three to five years," says Nicole Weber, a senior analyst at International Data Corp.

While Garages doors will stay open, some of its participants doors are closing. ASP Charitableway.com, which specializes in donation systems, is dissolving; and Iam.com, a Web site for working artists, has suspended its services due to financial constraints.

Meanwhile, Garages Web site (www.garage.hp.com) still boasts the failing startups. It may be time for HP to clean out its own garage.

Deborah Gage contributed to this story.