HP and Kodak rumors again - not likely
Every now and then there’s another round of rumors regarding a possible merger or takeover between HP and EK. They’re both venerable American corporate institutions, with a long history of innovation, and increasingly overlapped interests in the digital photography and imaging space. They also share a core challenge in adapting to the commoditization and changing demand models of the imaging and printing businesses as digital communications supplements and replaces photo printing. HP can afford to buy EK if it wanted to, and former HP Imaging and Printing head Antonio Perez is now the CEO at Kodak, supported by a number of HP alumni.
On the downside, Kodak is a company in need of a basic transformation. It probably needs to exit the chemical film and paper business at some point, and concentrate on its substantial brand and new digital products and services, along the lines of IBM exiting the PC hardware business, or perhaps Coca-Cola separating out the bottling business from the branding and marketing business. Given Kodak’s roots in the film business, this is a hard cultural change to make.
HP faces a similar challenge in its consumer facing businesses. Under Carly, “Hewlett-Packard” became “HP Invent”, and the associated global branding campaign raised consumer awareness and perception of HP’s products. Unfortunately, very few people are willing to pay a premium for a better-but-nonstandard PC, printer, or cameras, steadily making these businesses more about branding, shelf space, and buying opportunities than about technology, features, or innovation. In the near future, HP may also face the choice of becoming a branding and distribution company versus being a technology company.
Having worked for “HP the technology company” in the past, I’m rooting for a return to innovative engineering and technology as business drivers at Hewlett-Packard. But while there are a lot of smart people left at HP, I’m not sure that enough of an organizational culture of innovation is still intact to bring about a new round of businesses, or even to partner effectively with the startups that are trying to bring interesting new products and services to market.
Aside from that, Mark Hurd seems to be well focused on stabilizing the existing HP businesses, so if an EK deal made any sense now, it will make more sense after HP has a working plan for what it wants to be, and perhaps EK does some cleaning up.
Here’s Business Week on the latest HP-Kodak rumor:
Call it the rumor that won’t quit. Every couple of months, speculation bubbles up that Hewlett-Packard (HPQ)is poised to acquire Eastman Kodak (EK). The chitchat erupted again on Sept. 1, helping drive up Kodak’s stock 5%, to $25.50 — its largest single-day jump in over a year. The stock climbed another 3%, to $26.24, on Sept. 2.
Tags: hp, kodak, hewlettpackard“IT WOULD DEFY COMPREHENSION.” But the Kodak speculation doesn’t hold water upon closer scrutiny. Indeed, two HP insiders have told BusinessWeek Online at various times over the summer that there’s nothing to the oft-surfacing Kodak rumors, saying it isn’t even being discussed at HP.
