Hewlett-Packard Split to Allow Focus on Business Divisions

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Technology titan Hewlett-Packard Co. Inc., Palo Alto, CA, said the planned spin-off of some its operations would allow it to adapt more quickly in its core computer and printer businesses and to focus on emerging technologies for e-commerce.

The company, which is the third-largest computer manufacturer in the world, announced yesterday that it would spin off some of its operations into a separate, publicly traded company that will include its test-and-measurement, components, chemical analysis and medical products businesses. The new company, whose businesses accounted for about $7.6 billion of Hewlett-Packard's $47.1 billion in annual sales last year, will focus on high-growth businesses, including technologies related to advanced communications and the Internet.

The core company, however, is expected to continue to develop the hardware and software that will be used in electronic commerce and related businesses. One area in particular that the company is focusing on in technologies that will enable electronic devices to interact more freely through the Internet.

"We think we have capabilities for the infrastructure, for some of the software -- particularly in the security area -- and in financial services," said Lee Bonds, a spokeswoman for Hewlett-Packard, of the company's e-commerce technology.

The company launched a Web site for the sale of its own products a little over a year ago - the HP Shopping Village -- but it does not reveal sales through that channel. The company has been reported to be pursuing more direct sales for some of its products, although it was not immediately known how the spin-off might affect those plans.

"That's the least of our concerns right now," said a spokesman for the personal computer operations. "It's way to early to determine how this might impact our business."

The company said it would sell 15 percent of the shares of the new company in an initial public offering and distribute the rest among its existing shareholders.

The company selected Edward W. Barnholt, currently executive vice president and manager of the company's Measurement Organization, to be chief executive of the new company.

Lewis E. Platt, the chairman and chief executive of Hewlett-Packard, will remain in place during the transition and is expected to leave the chief executive post after a successor is found.

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