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Double FacePalm: HP Blew Billions on webOS

Published on November 21, 2011
by John Paczkowski

Hewlett-Packard’s decision to acquire Palm and “double down” on its webOS operating system has so far proven a regrettable and costly mistake. How costly?

HP investors, grab your Mylanta …

HP spent $1.2 billion to buy Palm in 2010. Reporting fourth-quarter earnings Monday, the company said it had been forced to write off a record $3.3 billion, about half of which was “related to the wind down of its webOS device business.”

From HP’s earnings statement:

Non-GAAP earnings and operating profit information excludes after-tax costs of $3.3 billion, or $1.56 per diluted share, related to the wind down of HP’s webOS device business, impairment of goodwill and purchased intangible assets, amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

Update: I originally read that list of items as all connected to webOS, but the related expenses seem to break out like so: $885 million from the “impairment of goodwill and purchased intangible assets” was largely tied to webOS and Palm, and $775 million in one-time charges were related to the wind down.

So $1.66 billion to wind down webOS, the crown jewel of HP’s Palm acquisition. That was $1.2 billion well spent …

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URL: http://allthingsd.com/20111121/double-facepalm-hp-blew-3-3-billion-on-webos/