Hewlett-Packard Drives a Hard Bargain

We already know that Hewlett-Packard's (NYSE: HPQ  ) Palm acquisition has proved to be a magnificent failure. We also know that it had tried hawking webOS to everyone from Amazon.com (Nasdaq: AMZN  ) to Research In Motion (Nasdaq: RIMM  ) or Oracle (Nasdaq: ORCL  ) , among others, before deciding to essentially give it away to the open-source community.

What we didn't know were some of the juicy details of negotiations at the bargaining table. According to a recent exclusive VentureBeat report, HP was trying to drive a hard bargain. The company was allegedly trying to escape from the botched acquisition as close to unscathed as possible by fetching a sale price equal to the $1.2 billion it paid in the worst deal of 2010.

HP couldn't have avoided losses altogether, as the company ended up eating about $3.3 billion in costs throughout the year related to the mobile money pit.

Imagine buying a used car that is not only obsolete but also proves to be a total lemon. There will be some unavoidable costs like gas to fill the tank, insurance in case of an accident, and maintenance to keep the clunker clunking. Now imagine taking out full-page ads in the local paper proclaiming what a jalopy the vehicle turned out to be, and proceeding to try to find someone willing to take it off your hands for exactly what you paid for it, even though you've driven it for more than a year and a half and it's now even older and even more outdated compared with the slick models now on the road.

Yeah, good luck with that.

It's common knowledge that webOS can't compete with Apple (Nasdaq: AAPL  ) iOS and Google (Nasdaq: GOOG  ) Android, so it would be silly for anyone to think a third go-around is just what the platform needed.

Nothing can save webOS, not even becoming open-source like Android. The market has moved on, and so should HP. The company is probably regrouping for a renewed tablet push, but that will only add to HP's pain as it continues to throw good money after bad in an attempt to salvage what it can.

You won't hear me say this often, but ex-CEO Leo Apotheker was right: webOS should die.

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Fool contributor Evan Niu owns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Apple, Oracle, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Amazon.com and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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