HEWLETT-PACKARD: ONLINE EXCLUSIVE
What's Next for HP and for Carly?
Now that the Hewlett-Packard board fired chairman and CEO Carly Fiorina, the betting begins on who will replace her, whether the board will split up the company, how Dell will react, and what will become of Carly.
And so we need to change the tense on Carol Loomis's epochal FORTUNE cover story released two weeks ago: Carly's big bet has failed.
HP's board flat-out fired Carly Fiorina, which the company disclosed Wednesday to investors and the media in an early-morning news release and subsequent teleconferences. The release cited strategic "differences." It named steady-eddy CFO Bob Wayman as interim CEO and Patricia Dunn, the former CEO of Barclays Global who stepped down from her job to battle cancer, as non-executive chairman.
Now the betting begins on any number of other fronts. To wit:
· Who will replace her? Fiorina had staunchly rejected the notion of a hands-on chief operating officer beneath her. The board undoubtedly will look for an operations whiz to head the far-flung company now. Merrill Lynch analyst Steve Milunovich already has weighed in with his nominee: Michael Capellas, currently CEO of MCI, former CEO of Compaq, and, waddya know, former president of HP, following its acquisition of Compaq. Intel's Paul Otellini was mentioned last go-round, but don't look for his name to surface this time because he's about to become his company's CEO. Motorola's Ed Zander might welcome a warmer climate, but he's barely a year into his new job. His ex-president, former General Electric executive Mike Zafirovski, probably will be considered. My guess: Ray Lane, the former president of Oracle and, like Dell CEO Kevin Rollins, an ex-management consultant. Lane's technology roots are deep, including a 10-year stint at IBM. He's the natural pick, if he wants to leave his cushy perch as a venture capitalist at Kleiner Perkins.
· Will HP's board split up the company? For now the line is no. But Wall Street clearly thinks otherwise. HP is up 7% to $21.58 in midday trading. Ever since the Compaq merger, investors have complained that HP is a "value trap," meaning primarily that the true value of the printer business was trapped within HP. Simply replacing the CEO won't unlock that value. Spinning off the printer division would.
· How will Dell react? What if, down the road, HP does jettison its printer business? Dell has said rather clearly that it got into printers to deny HP the ability to use its own printer unit to subsidize PCs. Would Dell stop making printers if HP no longer had that crutch?
· What will become of Carly? There's been a ton of mostly ill-informed speculation for years that Carly is interested in politics. Before Arnold, she was widely rumored as a Republican candidate for governor of California. A Fiorina-Boxer or Fiorina-Feinstein Senate campaign would be worth the price of admission. It wouldn't be shocking to see Fiorina show up in a sub-cabinet position in the Bush administration, either. But one thing is clear: Whatever else you say about Carly Fiorina, she has thrown everything, and I mean everything, into this job for the last five-plus years. At this point, she deserves a break.
Next: Carly Fiorina Out at HP: Why Her Big Bet Failed
New York - Carly Fiorina was ousted by the board of directors of HP yesterday, much to the delight of Wall Street. Ms Fiorina's resignation was the result of a disagreement with the board over the future of the company. Often cited as America's most powerful businesswoman, Ms Fiorina presided over the multi-billion dollar merger between Hewlett Packard and Compaq Computers in 2002. 

The move comes after several months of intense speculation about her future with the company. Having promised billions in annual savings to the company from the 2002 merger, the combined company failed to keep pace with competitors such as Dell, or to deliver any significant increases in profits, particularly in the personal computer market. A recent investigation by Fortune magazine highlighted the fact that the firm's highly profitable printer business supported the lower-margin computer business. 

After the announcement, HP shares surged 10% on Wall Street against a generally poor performance by the major indices.