Bloomberg’s Cory Johnson reported three-legged news on the latest happenings in the Tech industry. He talked about Hewlett-Packard Company (NYSE:HPQ) appointing a new Chairman of the Board, International Business Machines Corp’s (NYSE:IBM) deal with Apple Inc (NASDAQ:AAPL) to produce business software and Google Inc (NASDAQ:GOOGL) losing its Chief Business Officer to Softbank Corp.
Meg Whitman, current President and CEO of Hewlett-Packard Company (NYSE:HPQ), was also named as the Chairman of the Board of Directors of the company. She replaces Interim Chairman of the Board Ralph Whitworth. She is taking a dual role now in HP. Johnson feels that the traditional method, which separates the roles of Chairman and CEO, always yields better results in share market for the company.
Due to Whitman’s company downsizing initiatives, the company had 11 straight quarters of sales decline. There is a feeling that Hewlett-Packard Company (NYSE:HPQ) was bigger than what they could have handled and Whitman, through her initiatives, got it down to the right size, he said.
“Restructuring has gone on far beyond what Meg Whitman said it was going to go. The layoffs have gone from 35000 to 50000 and with a lot of restructuring charges with it.”
He also pointed out that performance bonus announced by Hewlett-Packard Company (NYSE:HPQ) were based on the results before restructuring and investors see the net profit which includes all the restructuring charges. He feels that as the restructuring charge increases, the bonus pool would keep building for Whitman.
In the talk, the new International Business Machines Corp (NYSE:IBM) and Apple Inc (NASDAQ:AAPL) deal was also discussed. Virginia Rometty, CEO of International Business Machines Corp (NYSE:IBM), and Timothy Cook, CEO of Apple Inc (NASDAQ:AAPL), agreed to a partnership between these two tech giants. There is a feeling that IBM is under a lot of pressure, which provoked this move from them, the discussion hinted. Johnson said on the deal:
“IBM needs better products to sell to their customers. That’s why they have made this deal with Apple because their customers are demanding iPad’s and iPhone’s as well.”
Johnson said that International Business Machines Corp (NYSE:IBM) is shrinking in all their businesses and their sales are shrinking for nine quarters. He thinks that share buybacks is responsible for substantial amount of trading in IBM, which has reduced approximately a billion shares to the company. He added that the little adjustments made by company like tax rates helped them in showing decent earnings. But he thinks that it is not a good sign for the company like IBM.
The final leg of the report was on Google Inc. (NASDAQ:GOOGL). The news that has made headlines everywhere is that Google had let their Chief Business Officer, Nikesh Arora, leave and join Softbank Corp as their CEO.
Johnson thinks that Arora was a very strong leader and many of his initiatives have yielded significant company growth. Google had reported a 14% increase in YOY sales and Johnson said that lot of initiatives by Arora had a major contribution to this 14% sales growth. He told the group:
“PLA Growth was three times the rest of their business; that was a Nikesh Arora initiative. It’s those kinds of initiatives that would let Google grow tremendously.”
He added that Google Inc. (NASDAQ:GOOGL) would definitely miss the services of Arora.