HP wanted $1.2 billion for webOS? Well isn't that nice | webOS Nation
 
 

HP wanted $1.2 billion for webOS? Well isn't that nice 39

by Derek Kessler Wed, 28 Dec 2011 4:12 pm EST

VentureBeat is today reporting that through the course of their negotiations with various interested parties, HP attempted to recoup their purchase cost for webOS. That's $1.2 billion, if you'll recall. That's a lot of cheddar, and it'd take a particularly large amount of gumption to ask that for a product that (1) then-HP CEO Leo Apotheker didn't want, (2) was missing the hardware division that Palm came with when HP bought it (this is why we can't have anything nice), and (3) was suffering in market share even with the TouchPad fire sale.

We wouldn't be surprised if HP has floated such a high figure early in the process of trying to sell webOS. It's like selling a house - you put it on the market for what you want, which should have plenty of negotiating room over what you'd accept (if it doesn't, you're doing it wrong). HP would have been stupid to not try to recoup as much money as they could from their multi-billion loss on webOS, but they also would have been stupid to not quickly negotiate down to a more reasonable price (somewhere in the mid-hundred-million-dollar mark, we'd guess). VentureBeat's source is unclear on how low the negotiations went, but considering that HP has instead decided to give webOS to the open source community, we'd say that the acceptable sale price to HP and the acceptable purchase price for the potential suitors never got close enough to make sweet acquisition love.

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39 Comments

Stupid being the key word, it makes me wonder what really goes on in those corporate meetings.

This makes sense in a way. They would love to make their money back, but don't want to part with the os for nothing. So if it sells good, we got our money back and our hands clean of it. If it doesn't sell we'll open source and work on building the os cheep in the next year or so, then try to make money off of it!

This type of mess does not surprise me at all. Negotiations of this type can get pretty contentious and no one likes being told their baby is ugly.

The CEO of the company I used to work for (not HP btw) was fired because he had rejected an offer as too low during negotiations to sell the company. When when the board of directors re-installed the previous CEO, he sold the company for about 1/3 the previous offer, just to avoid getting nothing.

True no one likes being told their baby is ugly but in the case of webOS, HP split the baby's lip and let it become malnourished before they put it up for adoption.

Before Leo was jettisoned, I speculated that HP might think that three incomplete generations of o/s with a tarnished reputation were more valuable than one incomplete generation with a smudged reputation.

How sad for the shareholders, employees, users, retailers, developers, suppliers....that this appears to be the case. With Meg taking the helm and still failing to extract some sort of salvage value from the carcass, I'm now afraid it is time to start the clock on HP being dissolved or acquired by a much smaller entity in the mid term.

That baby IS ugly. And it's adoptive parents are hideous too. Even Kramer has a certain amount of self-awareness that HP lacks.
http://www.youtube.com/watch?v=Ka1PeNNi6dg

What it tells me is that HP does not hold the patents.

It's the patents. That's where the value is.

The value of most of Palm dropped over time. The value of the software division dropped, as it became obsolete. The value of the hardware division dropped, as HP disbanded it...

But the value of the patents are going up, as the size of the smartphone industry goes up. And no matter what HP does, the value will continue to go up.

I think (a patent lawyer jumping in here would be welcome) that Jeff Hawkins from Handspring filed what was essentially "the smartphone patent". The patent you get when you integrate a handheld computer (a Handspring Visor, say) to a mobile phone (a VisorPhone, say).

That's big.

For example, that includes the software number pad dial screen. No physical keys on the Visor! Or, the hardware "ringer switch" that toggles between vibrate and ringing.

If you have those two tied up in your patent, you have Apple by the balls.

And that's why (if, if, if, if that's what the patents include, IANAL) it's not just worth money now, but will become increasingly valuable in the future...

Apparently, it's not THAT big.

Apparently.

It's not that big because HP has never really been interested in the smartphone market. Is it really any wonder that they don't understand the value of the Palm patent portfolio?

While I appreciate all the homework Derek Kessler puts into this site I'm tired of the negative reads about what HP did.

I'm going to just start reading the positive topics and move foward. We all know what a mess HP caused by now and there's nothing more we can do about it except move on and try to help expand WebOS with what's available to us.(I know it isn't much but let's move on).

I'll read articles that are true. Exposing HP's stupidity is one interesting topic.

I never said it wasn't "true". But it's getting old. Like listening to a buddy cry about an ex-girlfriend over and over.

Until HP releases the open source code, you're not going to read anything positive about HP. This was a 3.5 billion dollar **** up over. This will not pass as quickly through the system as that undercooked burger from Jack in the Box.

If you're married to WebOS, HP is the mother-in-law with a lifetime lease on your guestroom.

Doofuses

If true and HP was not willing to go low enough, what does this say for the new "open source" direction they are taking? They wanted to sell it and recoup their money but couldn't, so how much are they really willing to invest into the open source approach they are now taking? I don't know how much Google is spending on Android but I imagine it is a very high number. Is HP willing to go high enough to compete?

This was always plan B. Plan A, sell for 1.2B or more. Plan B open source. Plan C, sell for any level of loss.

I believe WebOS was the superior o/s. If they sold it to Samsung, HTC or anybody that knows wireless tech and knows how to innovate, the future value of WebOS goes into the billions of dollars. HP recognized that they lack the culture and know-how to sell cold bottled water in a barren desert.

HP is a commodity broker, not an innovator. They could not dare hand WebOS to an innovator and then choke on their dust as WebOS flourished.

Can't say that I agree with "this was always the plan". Seems Meg and her staff just spent quite a bit of time "coming up with a plan". Heck, they weren't even sure they were gonna keep the thing. Remember the whole "we've divided into two groups to list the pros/cons of keeping it vs getting rid of it" process?

I also don't agree that webOS was/is the superior OS having spent a fair amount of time developing for it and the two leading platforms. (That's not to say webOS didn't get some things right.) But that's just one developer's P.O.V.

I'm sure Plan A was "the plan" as they were blinded by arrogance, but I'm also pretty sure they never wanted to take the chance on plan C. To believe that there was no offer of a bid between 100 million and 1.2B for HP to consider, I dont buy. They stung their shareholders by failing to extract anything for the patents and o/s to help partially offset the purchase price and r&d and carpet bombing TV ad campaign. Where are the WebOS laptops we were promised for 2012? WebOS printers are still MIA. They didn't get a penny for their 3.5 billion invested/wasted. FAIL.

Not many honor the color graphics patent so a general smartphone patent maybe aint worth that much after all.

it should be so easy to replace the board as it is the president of HP. Eesh.

I think the 1.2 billion was pretty fair. HP did put a lot of work into the OS and seeded the market with about a million TouchPad users.

Apparently no one else thought it was fair or even near enough to fair to bite. Probably because it wasn't.

Most likely it wasn't the price of 1.2 billion that stopped companies from biting. It was likely the prospect of trying to compete with Google, Apple, Microsoft, and Amazon.

If I have to use webOS to compete against the companies you mentioned, then I must weigh its value against the products of those companies. $1.2B was likely NOT seen as fair when all things were considered (apparently neither was whatever the price dropped to during negotiations). So the price likely had a lot to do with it.

Problem is even with the million units they killed the momentum of the product line. With carriers turned off and developers looking in other directions, the good is visible in the rearview mirror and the future was dimming fast.

Leo killed webOS as commercially viable, but the lack of a sale due to over pricing is on Meg's watch. I'd have no confidence in any board decision at this point.

That's about $1200 per TP user. Seems a bit much.

That's an odd metric to use.

HP could have made another million and given them away for free at a cost of around $350 million to them and then had 2 million users or $600 per user.

It doesn't make sense to use the sales that were already realized. The buyer would care more about sales that it could make.

Both history and status quo must be used when analyzing the potential of a product's future. A buyer would be silly to ignore a product's past performance while considering investing a very large sum of money to get started and a major multi year commitment of capital and resources to make said product succeed.

Well, If I were Google I'd make an offer around the customary 10 cents of the distressed dollar, futz with it for a year, and release it as Android Jellybean and the hardware as the ChromePad. Moto can take care of the handsets and modifying the TP to be competitive when it re-launches. Google SW Engineers can take of building in an emulation mode to allow it to run existing Android Apps. WebOS is too good to die this way. The more I use Honeycomb and Gingerbread the more I appreciate it.

Oh, and I'd hire every member of the homebrew community who wanted a job...

I don't think that it is particularly clear as to whether or not the 1.2 billion figure is what they wanted or a starting point in negotiations. If it was a starting point then I don't see that as unreasonable. It may be they were hoping for half that amount when negotiations completed.

Using gingerbread on the TP has not impressed me. There are a lot of apps to choose from but other than that it is a lesser experience for me. I'll try ICS if/when it becomes an option, but right now I would put webOS way above android in terms of ease of use.

Well, either they didn't get a $600M offer or they turned it down.

I'll take eight!

A million TP's, pretty much all at a loss. What's the value of a product that loses money every time? The metric for that is simple, take your units to be sold, multiply it times zero.

Screwed everyone involved and possibly involved, including themselves.

Damaged goods aren't worth anything. webOS is dead..shame.

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