Hewlett-Packard's rise, fall and future

NEW YORK - Hewlett-Packard is splitting itself into two companies, one focused on its personal computer and printing business and another on technology services such as data storage, servers and software, betting that it can drive faster sales growth with more-focused operations.

Chief executive officer Meg Whitman - who reversed course on such a split first proposed years ago - will lead Hewlett-Packard Enterprise, a new company focusing on corporate hardware, the company said in a statement. Dion Weisler, will lead HP Inc., which will sell PCs and printers.

The change was the latest episode for one of Silicon Valley's pioneering companies.

A plaque that reads "Birthplace of 'Silicon Valley' " marks the garage in Palo Alto, Calif., where Hewlett-Packard Co. got its start in the late 1930s.

Bill Hewlett and Dave Packard became friends studying engineering at nearby Stanford University. At a time when working for larger corporations was much more common, the pair formed their own technology company at the encouragement of a former professor.

The two tinkered with various gadgets until they came up with an audio oscillator to produce and test sound frequencies. The device was notable in the use of a lightbulb to simplify the circuit and reduce costs. The Walt Disney Co. bought eight to produce sound effects for its 1940 movie Fantasia.

Over the decades, HP expanded into microwave signal generators, medical devices and pocket calculators. It introduced its first personal computer in 1980 and later made printers for PCs. It boosted its PC business with the $19 billion acquisition of Compaq in 2002 and became the world's largest PC maker in 2007.

But recently, HP has had its share of stumbles and has failed to capitalize on important technology trends.

HP paid $1.8 billion in 2010 to buy smartphone pioneer Palm Inc. as customers began shifting spending from PCs to Apple and Android tablets and smartphones. But HP was unable to turn critical acclaim for Palm's webOS technology into devices customers wanted to buy. It shut down the business in 2011.

That same day, HP unveiled a $10 billion deal to buy British business software maker Autonomy to strengthen its portfolio of software and services, which are more profitable than PCs. But a year later, HP wrote off most of that purchase price after alleging that Autonomy had misrepresented its true value during sale negotiations.