MCI's Capellas Touted For HP's Top Post

Hewlett-Packard's Board of Directors won't have to look far to find a qualified candidate to fill the departing Carly Fiorina's shoes at the firm: former HP president Michael Capellas, now head of MCI, is likely to be out of a job soon. Wall Street investment banking powerhouse Merrill Lynch has already said it favors Capellas for the HP job.

As the former Chairman and CEO of Compaq before it was acquired by HP in May of 2002, Capellas has intimate knowledge of the workings of HP's most troubled businesses. The Compaq unit has been losing market share rapidly to Dell Computer.

According to numerous Wall Street reports, Verizon Communications has made a bid to take over MCI, whose portfolio of long distance and business customers is attractive to the former Regional Bell Operating Company. Capellas has been the top operating officer at Compaq and MCI and he is unlikely to settle for a lesser post at Verizon for long,

When he left HP in November of 2002, many Wall Street analysts decried the loss.

Words written at the time by Merrill Lynch analyst Steve Milunovich seem prophetic today: "Capellas focuses on the company's operations; he has a good feel for the industry and the steps HP needs to take to be more competitive. Investors may doubt that CEO Carly Fiorina can handle such a big job herself."