HP kills TouchPad, looks to exit PC business

HP CEO Leo Apotheker wants to get HP out of the PC business.

Hewlett-Packard is taking a hatchet to its business and doing some radical restructuring.

The company said Thursday that it is looking to spin off its industry-leading but struggling personal computer business. HP also killed off the TouchPad tablet it launched last month, as well as its webOS smartphone line.www.mannastores.com

The move essentially leaves for dead the webOS software HP got byacquiring Palm last year, though the company said it will continue trying to "optimize the value" of its purchase. Though the move was unexpected, it's not all that surprising: Despite a huge marketing campaign, TouchPad sales struggled so much that HP almost immediately cut the tablet's price by $100. HP said none of its webOS products reached the company's internal sales targets.

HP also said it has agreed to buy British software developer Autonomy for roughly $10.2 billion in cash. At $42.11 per share, the purchase price represents a 58% premium over the company's average share price over the past month. Autonomy specializes in database search and other enterprise software technologies.

"We believe this bold action will squarely position HP in software and information to create the next-generation information platform," Apotheker said on a conference call with analysts. "This is about a transformation to position HP for a new future and driving shareholder value."

Curiously, and perhaps paradoxically, Apotheker said HP will run Autonomy as a separate company, but HP will "look for synergies."