Welcome back, webOS rumors. It's been a little while since last we spoke. How's life treating you? I know the breakup was a little rough on you, but on the bright side you're still alive, for now. Is Hewlett-Packard (NYSE: HPQ) still giving you the runaround?
Britain's The Guardian had previously claimed that the company was looking to outright dispatch the division if it couldn't find a buyer. Such a sacrifice would have resulted in the cutting of roughly 500 jobs, with one employee pegging the chances at 95% and actually feeling it was for the best. The report was a follow-up to HP's decision to go ahead and keep its PC business. The head of HP's Personal Systems Group, Todd Bradley, had then come out and shot down the closure idea, calling it an "unfounded rumor."
The latest tidbit now emerging from an exclusive Reuters report is that HP is still looking to sell -- not kill -- the division. According to the report, HP has tapped Bank of America's (NYSE: BAC) Merrill Lynch for advice on valuing the operating-system platform. It's estimated to bring in "hundreds of millions of dollars," and while that estimate is vague enough to be anywhere from $200 million to $900 million, it would decidedly be less than the $1.2 billion paid to pick up Palm.
"Sources" say a handful of tech powerhouses are interested in the patents that would come packaged with the deal, with possible suitors including Amazon.com (Nasdaq: AMZN), Research In Motion (Nasdaq: RIMM), IBM (NYSE: IBM), Oracle (Nasdaq: ORCL), and Intel (Nasdaq: INTC). While the report admits that the OS wouldn't earn a "high price," considering its dismal track record and recent neglect, any suitor would probably be more interested in intellectual property. I think it's fair to say the final sale price will end up under $400 million, resulting in a roughly $800 million loss for HP.
Two of the mentioned candidates have some interesting additional context to explore. Palm ex-CEO and longtime webOS champion Jon Rubinstein sits on Amazon's board, so any talk with Amazon would surely include Rubinstein at the table gunning for a family reunion. HP ex-CEO Mark Hurd moseyed on over to Oracle after his high-profile ouster, and you may recall that it was his choice to pick up Palm in the first place, back when HP was his ship to command.
Though the saga of webOS isn't quite over yet, there is one inescapable fact: HP is going to take a beating on this trade.
- Add Hewlett-Packard to your Watchlist to see what company ends up picking up webOS.
