Quote of the day:
"A good reputation is more valuable than money." -- Publius Syrus

"Reputation, reputation, reputation! Oh, I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial." -- William Shakespeare

1. Editor's Note: Amidst Scandal, Finally Some Good Press For HP

It's been a tough week for HP. Although the company is trying to move on from its spying scandal, several questions about HP's role linger. Patricia Dunn, after stonewalling on calls for her resignation, finally agreed to step down as chairman in January. And HP's actions are now being examined by as many as six regulatory and law enforcement groups.

But industry observers are starting to stand up for the company. The ascension of CEO Mark Hurd to chairman was welcomed as a move in the right direction by many. And as InformationWeek's Aaron Ricadela points out in his analysis of Hurd's performance since being appointed CEO in April 2005, HP's business is stronger than it has been in years.

If analysts are correct, HP will pull in more than $91 billion in revenue when its fiscal year ends Oct. 31. This will represent a 5% increase over 2005, as well as passage of a major milestone: finally surpassing IBM as the largest technology company in the world. Moreover, as Ricadela reports, HP's profits are growing faster than revenue; its stock has gone up 85% since Hurd took over, and its earnings have exceeded Wall Street estimates every quarter since that time.

Unlike his flamboyant predecessor, Carly Fiorina, Hurd has shunned the spotlight and clearly isn't interested in self-promotion or media stardom. Still, with his new dual role as CEO and chairman, he's clearly consolidating power—something that not all industry analysts are happy about—and building a reputation as a hard-hitting executive with a talent for spotting and eliminating inefficiencies as well as aggressively going after new revenue opportunities.

Speaking at InformationWeek's Fall Conference last week, Hurd called HP "a company in transition" and identified three huge growth opportunities: commercial printing and managing networks of printers, data center automation, and selling more laptops and handheld computers paired with better data security software.

Among other recent accolades, HP achieved the 20th spot in the InformationWeek 500, and the investment site 24/7 Wall St. included HP in its annual ranking of the 10 best-managed companies in America. "One of the great old names in U.S. tech has come back," wrote Douglas McIntyre in his blog on that site.

As other analysts have pointed out—including Eric Ross of ThinkEquity Partners and Michael Cohen of Pacific American Securities—investors are largely ignoring the scandal, as evidenced by the fact that HP's stock, after slipping slightly when the scandal peaked last week, immediately rebounded. Ross calls the scandal "a big soap opera" as far as investors are concerned. What matters is performance, and Hurd is delivering the goods.

It's been exciting but bittersweet to witness the saga of Silicon Valley's comeback kid. Living blocks from HP's corporate headquarters in Palo Alto, I have friends and neighbors who are among the legions of workers laid off since Hurd's arrival on the scene. And count me among those who were appalled at the tactics used to investigate the boardroom leaks. Investors may be shrugging off the scandal, but I believe HP's reputation will be tainted in the minds of the public for some time to come.

What do you think? Will HP successfully rise above this scandal? Will Hurd the straight shooter put things right? Let me know by responding to my blog entry.

Alice LaPlante
alice.laplante@gmail.com
www.informationweek.com