Today it fell to Harry Wolin, AMD’s senior vice president and general counsel, to sound a bit like Orson Welles doing a 1970s wine commercial for Paul Masson. At the opening of AMD’s quarterly earnings conference call with analysts, Wollin made a statement that the search for a new CEO remains a “top priority,” but that meeting a timeline is “not the driving force for the search.” Finding the right person is. I hate to say it, but I knew it was going to be a complicated search.

Wolin doesn’t sound much like Orson Welles, but you can hear his statement below. And if you’re drawing a blank on the reference to Orson Welles in wine commercials, there’s an example of one from 1978 below that.

AMD-Harry-Wolin by ahess247

Alex Gauna of JMP Securities cut his rating on AMD to “market underperform,” arguing that its Fusion line of chips isn’t winning sufficient business from PC makers. Having interviewed people at PC retailers and at PC manufacturers, he concludes Fusion is going nowhere. He says he was unable to purchase a Fusion-based PC from Dell via its Web site.

AMD’s Fusion processors aren’t winning many positive reviews, Gauna says, indicating a “lack of market interest.” Sales representatives at various online retailers steered his researchers “away from AMD platforms.”

As you might expect, it doesn’t take much to send AMD shares south these days. Intel is far and away the king of the hill in PC and server microprocessors, and chips from companies like Nvidia and Qualcomm based on the designs of ARM Holdings are coming into notebooks and tablets, minimizing AMD’s chances to win business there. He slashed his target price on AMD to $4.50 a share, which would constitute a drastic drop from the $6.80 at which it opened today, having closed Friday at $6.95. By today’s close of regular trading, investors knocked AMD’s shares down to $6.76, a drop of nearly 3 percent.

The day ended however, with AMD shares being defended by analyst JoAnne Feeney at Longbow Research. Dell is not an early adopter of the AMD technology, she says, but will be offering systems using AMD’s Fusion chips — the codename of the specific AMD product is Llano — soon. I heard the same thing from a source at AMD. On top of that, Toshiba and Lenovo are happy AMD customers. Tiernan Ray at Barron’s has a little more on Feeney’s note.

The downgrade came 10 days before AMD is due to report quarterly earnings and amid growing speculation on the company’s ongoing search to find a new CEO to replace the ousted Dirk Meyer. The search is about to drag into its sixth month, and I’m told it won’t be resolved before earnings are announced.

There were reports last month that several A-list executives, none of whom would have realistically considered the job in the first place — Oracle’s Mark Hurd, Apple’s Tim Cook — had turned down approaches by AMD’s recruiting agency, Heidrick & Struggles. Another who topped AMD’s list early on, Pat Gelsinger, the former Intel CTO who’s now in line to succeed Joe Tucci as the CEO of storage giant EMC, even said he told AMD no not once but twice. A lot of those people, Hurd and Cook especially, are really just names that any recruiter looking to fill a senior position would call in the course of building a list, just to make sure they’ve covered their bases.

The sense of urgency to find a new CEO seems to have dissipated at AMD, though not entirely. With the company running a profit again — its most recent quarter showed a $510 million profit on sales of $1.6 billion — it may be that directors feel they have the luxury of time in finding the right candidate, so they don’t have to rush the process, though obviously they’ll want to get it done soon. Expect the company to face a lot of questions from analysts when it reports earnings on July 21.

This is exactly the sort of problem I predicted in January. That Hurd, who is also a former CEO of Hewlett-Packard and of NCR before that, and Gelsinger, a former CTO of Intel once considered a possible successor to Paul Otellini, have been approached is not surprising, given their tech and managerial bona fides. Nor is the fact that they turned the job down.

The third name jumps out at me simply because I’m not familiar with Greg Summe. His bio on the Carlyle Group site says he spent 20 years as chairman and CEO of PerkinElmer, the $2 billion health sciences company, and before that, he ran the Avionics business at AlliedSignal, now part of Honeywell.

The search is being run by Heidrick and Struggles, Bloomberg says, and the fact that Summe was approached indicates how widely the company is casting its net. The clock, however, is ticking. When I last spoke to someone at the company, not directly involved with the search, I was told that the plan was to have a new CEO named before its next earnings report, scheduled for July 21. That’s 36 days away.

Historically, this is unlike AMD, which has always taken care to have a managerial bench, and like most big companies, has typically had a CEO successor waiting in the wings. Former CEO Dirk Meyer (pictured) was named COO in 2006, tapped by then CEO Hector Ruiz, who had himself been recruited from Motorola’s Semiconductor unit (now Freescale) to succeed AMD’s founding CEO, the colorful Jerry Sanders. Ruiz, however, had been recruited in 2000 because of the surprise resignation in 1999 of AMD’s heir apparent, Atiq Raza, who’s now a tech investor, backing, among others, Violin Memory.

That’s not to say there aren’t internal candidates who could step up. Rick Bergman, senior vice president and general manager of AMD’s products group, has been mentioned as on the list for consideration, though the board has favored an external candidate from the start. But the company has been bleeding talent. Two other internal contenders bolted in February — Bob Rivet, AMD’s onetime COO under Meyer, and Marty Seyer, the well-regarded senior vice president for corporate strategy, who in 2006 personally landed the deal to sell the first AMD server chips to Dell (until then an Intel-only shop) and had been known to occasionally jam with Ruiz on the electric guitar. Other senior managers are bailing out as well. Just last week Jeff VerHuel, corporate vice president of platform strategies, left AMD to join SMSC as its head of engineering.

Meyer’s sudden departure is said to have come after a row with the board of directors, impatient that AMD is not showing up in any meaningful way in the market for chips for mobile devices. The days when it was dealing perennial market leader Intel bruising punches in the punishing business of selling server chips are over. And its overall share of the market for PC and server chips has slipped to 13.2 percent versus Intel’s 86.5 percent as of March, according to Mercury Research. It still makes a compelling case as an alternative supplier for chips in notebooks and desktop PCs, as The Wall Street Journal reported yesterday, but Intel’s lead, given its powerful manufacturing infrastructure — AMD no longer owns its own factories, opting instead to farm those duties out to GlobalFoundries, its onetime manufacturing arm — will as the years progress prove ever more difficult to erode even incrementally.

And even trying will increase the operational costs of an already profit-challenged company. AMD delivered profits in 2009 and 2010, but only after undergoing a massive restructuring to rid itself of its manufacturing operations. Still, the profits are thin: In 2010, AMD reported income of $471 million on sales of $6.5 billion. Compare that to Intel’s $11.5 billion profit on nearly $44 billion in sales, and you see how hard a time even the new, leaner, fabless AMD has competing with Intel.

Competing with Intel for share of its traditional markets is hard enough. If AMD’s board is determined to push the company into the business of selling chips for mobile devices, the path to success looks nearly impossible. Just look at the troubles Intel is having in that space competing with ARM Holdings and its numerous licensees, which include Nvidia, Qualcomm, Broadcom, and Texas Instruments to name but a few. When it comes to mobile devices — tablets and smart phones — ARM-based chips are as ubiquitous as x86 chips are in PCs and servers: They are the standard. Intel’s low-power Atom-based chip has so far been largely unsuccessful in penetrating that business. And if Intel is not scoring any significant wins there, why would anyone want to take on the job of leading AMD into a likely failure? No wonder potential candidates are finding it easy to say no. Bloomberg quotes Gelsinger: “I said no, and I said no again.”

So where does that leave AMD now? There are two paths. First, consider an internal candidate to lead the company. As more external candidates spurn AMD’s approaches, the list of objections AMD’s board may have to hiring internally could shorten. Bergman may get a second more serious look.

The other is to sell the company to someone bigger. That’s another complicated question, mainly because with the terms of its settlement with Intel (or what I like to call the Treaty of Maui) and the terms of its complicated patent-cross licensing agreements that date back the the 1980s, any buyer would have to first pass muster with Intel or find themselves in a very expensive lawsuit. Then there’s the fact that AMD is 20 percent owned by Mubadala Development Company, the investment arm of the Arab Emirate of Abu Dhabi. Buying AMD — at current valuations it would take about $7 billion — would be, to paraphrase Steve Jobs, a “big bag of hurt.”

Even private equity players who specialize in buying troubled companies, fixing them up and spinning them off at a profit, are wary of AMD, having learned well the lessons of the disastrous 2006 buyout of Freescale by the Blackstone Group, Carlyle, TPG Capital and Permira Advisers.

Ultimately there will be no easy options at AMD. No surprise, its shares are trading down by 11 cents or more than 1 percent as of 9:45 am New York Time this morning.

His name is Michael Wolfe. He’s 52 and has worked for HP for five years, most recently as VP for Information Technology. This will be his second go as a CIO. Before his stint at HP, he spent 24 years at Motorola’s Semiconductor Unit and was CIO during the period it was spun out to become Freescale Semiconductor.

His new boss, AMD’s interim CEO Thomas Seifert, had high praise. “Mike has effectively led IT transformations constantly focusing on reducing operating costs and significantly improving business innovation,” he said in a statement. “His considerable talent and experience will help AMD to continue strengthening our IT infrastructure and streamline our business based on our own products and platforms.”

This hiring is taking place against the backdrop of the complicated, difficult search for a new CEO at AMD following the surprise resignation of Dirk Meyer in January. COO Robert Rivet soon followed.

AMD shares haven’t moved much since then, and it has been the subject of recurring problematic buyout rumors. Today the shares closed at $8.55, unchanged from the prior session, and that’s up only a nickel from where it was at the start of the year. Shares fell five cents in after-hours trading. Investors seem to consider AMD a company in a holding pattern until there’s some resolution in the corner office.

Seifert, AMD’s chief financial officer, was elevated in January to interim chief executive following the sudden departure of Dirk Meyer. He said he immediately opted to take his name out of consideration for the permanent CEO job, because he wanted to avoid any indication that friction among AMD senior executives could have been a factor in Meyer’s resignation.

The management change “was a board decision,” Seifert said Wednesday, in an interview following his appearance at a Goldman Sachs technology conference in San Francisco. “I was as surprised as anybody else.”

The board, Seifert said, did not act because of anything the popular CEO had done or not done, but questions about AMD’s future. “Are we on the right trajectory? Do we set our objectives high enough?” Seifert said. In considering such questions, he said, directors concluded a different set of skills than Meyer’s were needed–prompting a CEO search that is now underway.

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And while a search for Meyer’s replacement is underway, I’m told it could easily extend into the summer.

It didn’t take long for rumors about “takeover chatter” concerning AMD to emerge, and briefly yesterday, Dell was mentioned as a possible buyer. AMD shares traded up 4 percent for part of the day but closed down 3 cents during the regular session. Dell more or less shot down the rumor. During its earnings conference call, CEO Michael Dell, answering a question on acquisitions, said, “…we’re looking for relatively smaller sized ingredient acquisitions where we can leverage them with our substantial customer access and distribution.” With AMD currently trading at a valuation north of $6 billion with about $2.2 billion in long-term debt, it’s not the kind of target that would qualify as “smaller sized.”

There will always be rumors of this sort about the perennial number two in the PC microprocessor business. Those who trade on them don’t get something fundamental about AMD: That it would be a complicated company to buy and to own.

Any deal to acquire AMD will necessarily include a third party: Intel. For decades Intel and AMD have operated under a series of patent cross-license agreements that give AMD access to the crown jewels of Intel’s intellectual property, including the x86 instruction set. These patents are on the technology that make a PC a PC, and they are fundamental to the success, or failure, of both companies.

When AMD first sought to spin off its manufacturing operations into the company that became GlobalFoundries, Intel asserted that AMD couldn’t assign access to these patents to a third party without its say-so. This dispute ultimately got the two companies talking and resulted in what I like to call the Treaty of Maui, the settlement of a sweeping antitrust dispute in 2009, a story I reported at the time for BusinessWeek.

There are, however, some limits governing Intel’s conduct in this scenario. When it settled an antitrust case against it last year, Intel agreed to hold off on suing any company that buys one of its competitors for a year, in order to hold “good faith negotiations” over the terms of that patent cross-license agreement. What this all means is that any company that first concludes a deal to buy AMD will then have to pivot and face the possibility of lengthy negotiations with Intel that could, if not successful, end in a costly and distracting patent lawsuit.

Intel may turn out to be willing to play ball, and cut a reasonable deal with any new owner, but the fact remains that every so often the cross-license arrangement has to be renewed. And that’s not to say a determined buyer couldn’t ultimately cut through all this and get a deal done. Dell has $15 billion in cash and could conceivably get a deal done, and being an AMD customer could arguably benefit from owning AMD over the long term, but it has signaled that it’s not interested, and probably never was in the first place.

There are other considerations: AMD is 20 percent owned by the Mubadala Development Company, the investment arm of the Arab Emirate of Abu Dhabi, which changes the potential deal dynamic a bit. Then there’s the big question concerning the wisdom of competing with Intel. As AMD’s prior CEOs will tell you, simply grappling with Intel in the marketplace is a dangerous, thankless job.

But the complication of the Intel cross-license agreement alone should be enough to give any company mulling an AMD buyout serious pause. At the same time it should serve as food for thought for anyone wanting to trade on the latest AMD buyout rumor. This surely is not the last.

Rivet’s departure follows that of CEO Dirk Meyer, who resigned back in January, also rather abruptly. No word yet on AMD’s plans to replace either exec. CFO Thomas Seifert continues to serve as interim CEO of the company.

Their concerns came to a head after a November meeting between the CEO and fellow directors to review AMD’s strategy. More recently, directors lined up against the longtime AMD executive, forcing his sudden departure on Monday, a move that surprised investors and sent shares in the microprocessor maker tumbling.

Mr. Meyer, who was named CEO in July 2008 after holding chief operating officer and engineering posts at the Sunnyvale, Calif., company, had performed well at cost-cutting and building products to continue its longtime battle against Intel Corp. in chips that power personal computers, those people said. But board members were not persuaded that Mr. Meyer had a convincing strategy for expanding into new semiconductor markets, including devices for tablet computers, they added.

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First, the departure has jarred the confidence of investors who have pushed the value AMD stock up by more than 57 percent since September. Shares are down by more than 8 percent today.

Second there’s the problem of hiring a replacement for Meyer, who had been on the job only a little more than two years. I’ve been talking to people both inside AMD and longtime AMD watchers outside of the company and practically all of them have been having trouble coming up with a short list of potential candidates.

For one thing, I’m hearing from people familiar with the thinking of those involved in the hiring process that there’s a strong preference for an external candidate.

Among the criteria are someone with a proven record of running large technology companies, and one with some charisma who can get the marketplace excited about AMD again. While Meyer deserves credit for getting AMD back on relatively stable footing following the divestiture of its manufacturing operations–now GlobalFoundries — and his predecessor, Hector Ruiz, gets the credit for doing the heavy lifting of getting the complicated transaction related to that split, neither could be described as charismatic.

Historically, AMD knows what it’s like to have a charismatic CEO. Jerry Sanders who founded the company and ran it from 1969 until 2002, possessed plenty of it, and some of the more colorful anecdotes about Silicon Valley history concern him. The board wants someone who’s both capable and cool at the same time. Someone who can represent the company well to the outside world, bring an air of stability and competence and elaborate a vision that will move the company forward. That’s a tall order for a company like AMD, whose fundamental strategic problem can be summed up in a single phrase: Competing with Intel is brutal, no matter what you do.

The list of potential candidates isn’t obvious by any stretch. Still in my conversations today, a few names came up, some more idealistic than realistic. One internal candidate who will probably get courtesy consideration I’m told is Rick Bergman, senior vice president and general manager for AMD’s products group. He oversees both the graphics and microprocessor operations and came to AMD in 2006 as a senior executive at ATI, the graphics chip company that AMD acquired for $5.4 billion in 2006. His résumé includes time at Texas Instruments and IBM. He’s described by those who know him as hard-driven and competitive and a capable well-respected manager, though at the end of the day not likely to get the nod.

Another name that has come up is that of Pat Gelsinger, not necessarily because he’d be a candidate for the job, but more as an example of the kind of person AMD would like to hire. Gelsinger was Intel’s CTO from 2001 to 2005 and was senior corporate vice president for the Digital Enterprise Group until 2009, when he suddenly jumped to EMC as president, COO and apparent successor-in-waiting to CEO Joe Tucci.

Finally there’s Michael Capellas, whose name invariably comes up whenever a significant CEO slot comes open. He’s currently running Acadia, a private cloud computing joint venture between Cisco Systems and EMC with investments from Intel and VMWare. Capellas was the CEO of Compaq Computer when Hewlett-Packard acquired it in 2002, then went on to helm MCI and engineered its turnaround and sale to Verizon in 2006. His next stop was the payment giant First Data after it was taken private in a leveraged buyout by the private equity fund Kohlberg Kravis Roberts. He was considered for the CEO job at Hewlett-Packard, before Léo Apotheker was named, but was said not to be interested. He’s got the tech and management chops and has a proven record for getting troubled companies on solid footing. It’s unclear if he would be interested.

Whoever they pick, they may want to do it quickly. AMD has a tough road ahead of it, and uncertainty at the top certainly isn’t going to help.

Seifert isn’t even a candidate for the permanent position. And Meyer was talking up AMD at CES just last week.

“Dirk became CEO during difficult times,” AMD chairman Bruce Claflin said in a statement. “He successfully stabilized AMD….However, the Board believes we have the opportunity to create increased shareholder value over time. This will require the company to have significant growth, establish market leadership and generate superior financial returns. We believe a change in leadership at this time will accelerate the company’s ability to accomplish these objectives.”

AMD reports fourth-quarter financial results Thursday.

AMD also said it expects Q4 revenue to be sequentially flat with the third quarter. That would imply $1.62 billion; the Street has been forecasting $1.67 billion.

On a GAAP basis, the company lost $118 million, or 17 cents a share.

“AMD’s third quarter performance was highlighted by solid gross margin and a continued focus on profitability, despite weaker than expected consumer demand,” CEO Dirk Meyer said in a statement. Gross margin in the quarter was 46 percent.

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Good day everyone … and thank you for joining us. For the past few years, we have been very open in outlining the major steps for AMD’s transformation into a processing powerhouse:

• From the acquisition of ATI Technologies;
• To the formation of GLOBALFOUNDRIES; and
• The creation of AMD-The Product Company,
  o with a single business unit,
  o a reinvigorated roadmap,
  o a new business model,
  o And a close relationship with a world-class leading-
  edge foundry.

Today, I am pleased to announce the last major component of that transformation–in the form of a transparent and public agreement with Intel to create a level playing field in the x86 processor industry–taking us one big step closer to achieving our bold vision.
There are three key components to the agreement:

• First, Intel has agreed to an important set of ground rules that we hope will define the path to a free and open market in the microprocessor industry;
• Second, we have agreed to a new patent cross-license agreement that gives AMD broad rights and the freedom to operate a business utilizing multiple foundries,
• And third, GLOBALFOUNDRIES has agreed to terms that allow them the freedom to operate as an independent world-class leading-edge foundry company, going forward, without being a subsidiary of AMD.

In addition, Intel has agreed to pay AMD $1.25 billion.

Today marks the beginning of a new era… one that confirms that the game has changed for AMD. It is an important milestone for us, for our customers, our partners, and most important–for consumers and businesses worldwide. In addition, it represents the culmination many years of litigation and regulatory engagement.

And we are optimistic that it will usher a new era for our industry. We recognize that it will take time for people to understand how operating conditions in the processor business have changed–but make no mistake–they have changed.

I would like to thank the regulatory agencies around the world for their diligence and consistency. Their work has enabled us to achieve this milestone. We are optimistic they will continue their vigilance in maintaining a level playing field, especially with respect to exclusionary practices in our industry.

Looking forward to three keys to our continued success: Compelling offerings; Access to customers and channels, And a winning business model.

We are optimistic this agreement addresses concerns about customer and channel access and our business model. We look forward to healthy competition with the mutual respect one would expect between world-class competitors.

Under terms of the agreement, Intel (INTC) will pay AMD (AMD) $1.25 billion (nearly a quarter of AMD’s $4.46 billion market cap) and agree to “abide by a set of business practice provisions” presumably crafted to temper Intel’s allegedly anticompetitive practices. Here are details of the agreement:

Business Practices Provisions Prohibit Intel From:

• Offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel, whether on a geographic, market segment, or any other basis (Section 2.1.1.a)
• Offering inducements to customers in exchange for their agreement to limit or delay their purchase of microprocessors from AMD, whether on a geographic, market segment, or any other basis (Section 2.1.1.b)
• Offering inducements to customers in exchange for their agreement to limit their engagement with AMD or their promotion or distribution of products containing AMD microprocessors, whether on a geographic, channel, market segment, or any other basis (Section 2.1.2a-b)
• Offering inducements to customers in exchange for their agreement to abstain from or delay their participation in AMD product launches, announcements, advertising, or other promotional activities (Section 2.1.2.b)
• Offering inducements to customers or others to delay or forebear in the development or release of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis (Section 2.2.2 and 2.1.2)
• Offering inducements to retailers or distributors to limit or delay their purchase or distribution of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis (Section 2.2.1)
• Withholding any benefit or threatening retaliation against anyone for their refusal to enter into a prohibited arrangement such as the ones listed above.

In return, AMD will drop all its pending litigation against the company and pull out of regulatory complaints worldwide. Finally, the two rivals will enter into a five-year patent cross-licensing agreement.

In a joint statement, the companies said, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”

Interesting. Clearly, AMD CEO Dirk Meyer’s earlier comments about the ratification of its complaints about Intel’s business practices and the company’s hope for a future in which AMD’s “ability to succeed as a business is really determined by the quality of our products and customer relationships” was quite prefigurative.

During a call to discuss the settlement, Meyer said the accord marks the beginning of a new era, one that changes the game for AMD. “It is an important milestone for us, for our customers, our partners, and most importantly–for consumers and businesses worldwide,” Meyer said.

“It is the culmination years of litigation and regulatory engagement, and we are optimistic that it will usher a new era for our industry,” the CEO continued, further noting that change may not be immediate. “We recognize that it will take time for people to understand how the operating conditions in processor business have changed–but make no mistake–they have changed….We look forward to healthy competition with the mutual respect one would expect between world-class competitors.”

It is unclear if the settlement will affect the antitrust suit brought against Intel by New York Attorney General Andrew Cuomo last week as Cuomo hasn’t yet commented. But the European Union says it will not change its decision in May to fine Intel a record $1.5 billion for anticompetitive behavior.

“The European Commission takes note that Intel and AMD have settled all their litigation and that Intel is paying AMD compensation of one-and-quarter billion dollars,” said an EC spokesman. “But Intel has an ongoing obligation to comply with the commission’s antitrust decision and with EU competition law. The commission continues to vigorously monitor Intel’s compliance with its obligations under the EU antitrust decision.”

In remarks made during AMD Financial Analyst Day, CEO Dirk Meyer said that Intel’s (INTC) current legal woes “ratify” AMD’s (AMD) allegations.

“We’ve said for a long time that our success in the marketplace was hampered by anticompetitive behavior on the part of Intel,” Meyer said. “And over the last 12 months that we’ve seen our statements ratified by regulators around the world….I’m looking forward to a future in which our ability to succeed as a business is really determined by the quality of our products and customer relationships. And I can tell you that hasn’t always been true.”

Analysts had expected AMD to lose 42 cents a share on revenue of $1.26 billion, according to a consensus survey by Thomson Reuters. Instead, the company lost 18 cents a share on revenue of $1.4 billion, which was down from $1.8 billion for the same quarter last year.

Not the sort of blow-out quarter we saw from Intel (INTC) earlier this week, but encouraging news nonetheless. Certainly, AMD’s leadership believes the company is poised for a turnaround. During a conference call to discuss AMD’s (AMD) third-quarter results, CEO Dirk Meyer offered an upbeat outlook for the remainder of 2009 despite the current loss.

“Third quarter consumer PC demand continued to improve from prior periods, with particular strength in notebooks and in China and continued recovery in Europe and in North America,” Meyer said. “And it appears the commercial IT markets are positioned to improve next year….Going forward, we believe we are well positioned to succeed.”

Oh, this was AMD’s 11th quarterly loss in a row.

So nothing much to get excited about here. Or in the company’s guidance. “Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its Product Company revenue to be up slightly for the third quarter of 2009,” AMD CEO Dirk Meyer said in a statement. “New platform, microprocessor and graphics introductions planned for the second half of 2009 position us well to improve margins and meet our financial goals for the year.”

AMD shares were down more than 11 percent to $3.60 in after-hours trading.

You know things are bad at AMD when the company’s schadenfreude over Intel’s European legal woes spills over into its brand messaging. Surf over to AMD’s Web site this morning and you’ll find foremost on its homepage not a message about Fusion, its next-generation microprocessor design, or branding for its various chips, but a gigantic European Union flag flying over this text:

“European Commission finds Intel guilty of breaking antitrust laws, harming consumers.”

Click through and you’ll find an entire subsite celebrating the EC’s finding–a shrine of court documents, press releases and industry quotes. “European Commission Reveals the Truth About Intel,” the page shouts, cataloging AMD’s grievances against the company. And while that’s apparently the case, AMD’s response reveals a bit of truth about AMD. Gloating over a legal victory is one thing, but building a branding campaign around it is another one entirely. Moral superiority is wonderful, but it’s not going to win any battles in the marketplace.

For AMD (AMD) to beat Intel (INTC) at its own game, it must beat Intel at its own game. “Imagine a world where the world’s most important information technology only comes from one place,” AMD President and CEO Dirk Meyer recently told BusinessWeek. “Nobody wants to live in that world.” No, I suppose not. But if we’re going to live in the better one the Meyer is hinting at, AMD has got to build it. Talking about it as your company continues to struggle toward profitability after more than two years of losses, isn’t going to cut it.

Platforms and products is one of four new operating units created in this latest restructuring, which also birthed an advanced technology group, a marketing group and a consumer group. Why this particular arrangement is any better than AMD’s reorg of a year ago–which spawned the Central Engineering Organization and Computing Solutions Group–is anyone’s guess. AMD CEO Dirk Meyer says it will optimize AMD’s operations and drive the company toward sustained profitability and long-term success. But then he said that about the last one as well.

Oh, speaking of that last reorg, Randy Allen, the 24-year AMD veteran who figured so prominently in the company, is leaving. AMD (AMD) offered no explanation for his departure and there’s no word yet on where he’s headed. That said, some surmise that he may be following a path beaten by two of his former colleagues, Raja Koduri and Bob Drebin, who both fled AMD for Apple (AAPL)

We have gone through a very difficult time, reacted quickly and decisively, and we are on our way to really have, I believe, a phenomenal transition year in 2008.”

– AMD CEO Hector Ruiz, December 2007

2008 hasn’t quite proven to be the “phenomenal transition year” AMD believed it would be. Despite new leadership and a restructuring of its manufacturing assets, the company was not able to return to profitability by the third quarter of 2008 as it had hoped. And now, AMD (AMD) has reported a greater-than-expected net loss for the fourth quarter of 2008–its ninth consecutive one. A grotesque 33 percent drop in revenue left the company awash in $1.4 billion of red ink.

“The fourth quarter of 2008 is going to be remembered for the severe stresses placed on the global economy and on our industry,” AMD CEO Dirk Meyer told analysts. “The global economic environment led to a softening in end-customer demand for PCs and servers in what is usually the year’s strongest quarter. The reality of today’s global economy require that we redouble our focus on cash management and cash flow control, and we will do so while protecting assets.”

Suffice to say, AMD did not offer a specific forecast for its current quarter, saying only that it expects sales to continue to trend lower “in light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain.” Shares in the company, which have lost more than 50 percent of their value since the start of the fourth quarter, closed down nearly 10 percent on the news, although they seem to be recovering today.

A bold move for AMD (AMD), which has sustained seven straight quarters of losses, and one that could dramatically alter its fortunes. Indeed, right off the bat, AMD will push $1.2 billion in debt off its books and onto those of the The Foundry Co. “This is the biggest announcement in our history” said CEO chief executive, Dirk Meyer. “This will make us a financially stronger company, both in the near term and in the long term, as a result of being out from the capital expense burden we have had to bear.”

For AMD, the sale frees it of a business that’s been a drain on capital expenses and, in the words of CEO Dirk Meyer, will make the company “leaner and more focused” while it seeks to “create a business model to deliver sustainable profitability.” For Broadcom it’s an easy way to immediately scale its DTV business from low-end to mid-range to high-end interactive platforms and panel processors.

For AMD, the sale frees it of a business that’s been a drain on capital expenses and, in the words of CEO Dirk Meyer, will make the company “leaner and more focused” while it seeks to “create a business model to deliver sustainable profitability.” For Broadcom it’s an easy way to immediately scale its DTV business from low-end to mid-range to high-end interactive platforms and panel processors.

Ruiz announced the leadership change during AMD’s second-quarter financial earnings conference call. “The time is right to turn the company over to a new leader,” he said. And, given the company’s ugly $1.19 billion second-quarter loss, he would appear to be right. “We have not been living up to our potential,” Meyer said during a conference call. “Looking forward, we will. We will demand a pattern of sustained profitability…We will execute, execute and execute.”

Presumably, Meyer is refering to the company’s mission here and not AMD employees who’ve suffered enough already, I think.