"We are fortunate to have someone of Meg Whitman's caliber and experience step up to lead HP," Ray Lane, who is now the executive chairman of the board of directors, said in a statement. "We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead. Meg is a technology visionary with a proven track record of execution. She is a strong communicator who is customer focused with deep leadership capabilities. Furthermore, as a member of HP's board of directors for the past eight months, Meg has a solid understanding of our products and markets."
Whitman replaces Léo Apotheker, who HP said had decided to "step down."
Update at 4:58 p.m. ET. Why Whitman?
According to a person with knowledge of the board's decision, she was chosen for her track record of successfully managing a large, complex business, her communications skills both internally and with Wall Street and her ability to lead senior executives through corporate transitions.
All of these were seen as Mr. Apotheker's shortcomings. While the board liked his plan to move H.P. to a business with more software and services, H.P.'s poor earnings and unhappiness with Mr. Apotheker by some members of the company's powerful executive committee ultimately spelled his downfall, the person close to the board said. Hewlett-Packard's stock has declined more than 50 percent from its 52-week high, but rose almost 7 percent on Wednesday on reports that Mr. Apotheker faced dismissal. The shares were down almost 5 percent Thursday in a general sell-off on Wall Street.
Ms. Whitman might not unwind much of Mr. Apotheker's strategy of moving Hewlett-Packard toward becoming more of a software services company in the mold of I.B.M. or SAP. Although H.P.'s board is comfortable with the strategy laid out last month by Mr. Apotheker, its members questioned his ability to communicate that strategy within the company and to outsiders, especially investors.
Update at 5:44 p.m. ET. An Identity Crisis:
What's clear about these moves is that HP is at a crossroads as a company. "The company's trying to figure out whether it works best as a technology conglomerate that can be all things to all customers, or as a more streamlined operation that does only a few things well," the AP writes.
What that means is that HP is deciding whether it wants to continue to be a consumer behemoth or become a more business-oriented company.
Apotheker had apparently decided to go that route, as he announced that HP was halting the sales of HP's tablet and smart phones and in August, he announced the company was weighing divesting its personal computer arm.
The San Jose Mercury News has a long piece that tackles whether Whitman is right one for the job. Analysts, the paper reports, are mixed:
...Some analysts have questioned whether her experience at eBay, which serves a consumer market, was enough to prepare her for the job at HP, which increasingly sells computer systems and other technology to corporate and government customers.
"On the plus side, she's a known quantity," said Charles King, president and principal analyst of Hayward-based Pund-IT. "She's certainly recognizable. If somebody asked you to name the five or six CEOs in Silicon Valley who had achieved rock star status, I think she'd be on the list."
On the other hand, he said, "HP's primary focus areas are not her particular areas of expertise." Moreover, while HP's board is trying to move the company's emphasis to be more in line with that of Oracle (ORCL) and IBM, he said, "that's not something that I think Whitman has any experience in."
NPR's Richard Gonzales filed a report that takes on the same question.