A Tale of 2 webOS Divisions

It was the best of times, it was the worst of times, and, piece by piece, the tale of Hewlett-Packard (NYSE: HPQ  ) webOS' fate continues to unfold.

According to some leaked internal memos, the webOS Global Business Unit, which had been entirely within HP's soon-to-be spunoff Personal Systems Group division, is now being partitioned. The webOS hardware operations will remain within the PSG, while the software development division is being transitioned to HP's broader Office of Strategy and Technology.

The OST is where the company's senior technology gurus spend their time devising strategies for the long haul. The note from PSG Executive Vice President Todd Bradley, who would continue to lead the group after the spinoff, elaborated by saying the move would allow the company to "fully investigate how we can utilize the webOS software platform." Likewise, OST Executive Vice President Shane Robison added that his department will "provide these teams with the resources and support they need as we define the best monetization model."

It seems to me like HP still has that OS-caught-in-the-headlights look. The company doesn't want to pull a Cisco (Nasdaq: CSCO  ) and just kill the botched acquisition altogether, yet it knows it can't take on Apple's (Nasdaq: AAPL  ) or Google's (Nasdaq: GOOG  ) mobile operating systems. What's a $50.4 billion company to do?

HP's ambivalence is only hurting itself. It's a tough pitch to sell or license the platform to other manufacturers when the company itself is giving up on hardware. And even after announcing that webOS hardware operations are to be discontinued, the hardware division is to remain within the PSG…?

This lack of direction does not exactly inspire confidence to prospective buyers/licensees, especially when compared with Android or Microsoft (Nasdaq: MSFT  ) Windows Phone 7, which is looking more and more viable. Developers are unlikely to invest time and talent in a platform whose audience is now decidedly limited, even after HP ordered up another batch of TouchPads.

HP needs to swallow its pride, pick a direction, and stick with it for webOS. The best way to "optimize the value" of webOS requires quick action and decisiveness. Put the platform up for sale? Great. Or license it to manufacturers while fully supporting the software? Do it. Maybe bite the bullet, kill it completely, and take the loss? Even better.

The company needs to make up its mind and not look back. Perpetuating the saga of webOS will only serve to minimize its value, and HP shareholders will be the ones picking up the tab.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Google, Apple, and Microsoft. The Fool owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, Cisco Systems, and Apple, as well as creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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