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9/28/2006
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HP Targets Gamers With VoodooPC Acquisition

The company plans to form a separate business unit within its Personal Systems Group focused on the gaming business.

Hewlett-Packard has taken a page from Dell's acquisition playbook with a definitive agreement to acquire one of the best-known high-end gaming PC vendors, VoodooPC.

HP officials said on Thursday the company plans to form a separate business unit within its Personal Systems Group focused on the gaming business. Rahul Sood, president and CTO of VoodooPC, Calgary, Canada, will become chief technologist for the unit, while CEO Ravi Sood will be the unit's director of strategy.

They will report to Phil McKinney, who will become the general manager of the unit. McKinney will also continue his role as CTO of HP's Personal Systems Group.

The move by HP follows Dell's acquisition this March of Alienware, . one of the other top gaming PC vendors.

The acquisition of Alienware was Dell's back-door entry into the AMD world. Previously, Dell had depended exclusively on Intel for CPUs. Since then, however, Dell has brought AMD processors into its non-gaming lines as well.

Rahul Sood wrote in his VoodooPC blog on Thursday that his company had also been approached by a number of Taiwan-based ODM manufacturers about acquiring the company. He also exchanged e-mails and phone calls starting last November with Michael Dell.

He also wrote that he met with HP executives at last year's Tour de France bicycle race and discussed strategic possibilities there. However, at the time, Sood wrote that his contact at HP "said he was virtually powerless as the company was notoriously conservative. Little did I realize that the company was in a state of transition and was about to be turned on its head."

That transition was the hiring of Mark Hurd as president and CEO. "Mark Hurd brought with him a tornado of new blood and new culture into the company. From my point of view, Mark Hurd has turned HP's corporate culture on its head and in the process transformed HP into an operationally excellent engine," Sood wrote.

Sood said he wrote an e-mail to Hurd, explaining the company's strategy, and that started serious discussions between the two.

VoodooPC builds many of its gaming PCs to order. Because VoodooPC focuses on performance gaming machines, its highest-end Omen brand desktop PCs command a starting list price of $6,000, and can sell for well over $8,000 with options such as a high-speed hard drive, extra memory, high-end speakers and Bluetooth keyboard and mouse.

The company also has a full line of midrange to high-end notebook PCs.

HP officials were not available to comment on the acquisition. However, Todd Bradley, executive vice president of HP's Personal Systems Group, said in a statement, "HP is already a market leader in two of the three major segments in the gaming market by providing industry-leading workstation solutions for game development and powering the largest online game services. We're absolutely thrilled to welcome VoodooPC, gaming industry pioneers and the premier name in gaming, to the HP team. Together with VoodooPC's leadership and influence, HP will have the expertise to become the leader in the gaming customer segment."

No financial details related to the acquisition were revealed. The deal is expected to close in November.

Ed Moltzen contributed to this article.

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