Hewlett Packard, the world's largest maker of personal computers, is planning to spin off its PC operation and transform its business model with a 10-billion-dollar purchase of British software maker Autonomy, according to dpa. HP and Autonomy both confirmed Thursday they are in negotiations, but gave no other details of the proposed transaction. HP also confirmed that its board had authorized management to pursue "strategic alternatives" for its personal systems group and that it plans to discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The move would be a stunning change of direction for the massive US technology company, which Apotheker has been trying to steer towards higher-margin businesses like software while de-emphasizing the personal computer business. The attempt to reshape HP comes amid a drastic slump of PC sales, which have been hit by a stuttering world economy and the emergence of Apple's iPad as a popular PC alternative. It also marks a reversal of the 20-billion-dollar merger in 2001 that saw HP combine forces with Compaq to leapfrog Dell and become the world's largest PC maker. Apotheker addressed the changing market in May, telling analysts on a conference call that the company needed to put greater investment into its "value-added services" or it will "be left with a business that is running out of steam." Apotheker was hired to re-orient HP last year after previously heading the German software giant SAP. Autonomy was founded in 1996 and is regarded as one of the top vendors of business analytic software. It had net revenues of 870 million dollars in 2010. Founded in 1935 in a garage, HP is regarded as one of the pioneers of the Silicon Valley tech region and had net revenues of 126.3 billion dollars last year, making it the world's largest technology company by sales. The company announced it third quarter results Thursday, with revenue of 31.2 billion dollars up from 30.7 billion dollars a year ago. Profits rose to 93 cents a share from 75 cents a share a year earlier. HP predicted 2011 revenue of between 127.2 billion dollars to 127.6 billion dollars, down from its previous estimate of 129 billion dollars to 130 billion dollars. -- SPA
