HP to Buy Software Company; Spin Off PC Business; Stock Declines on News

Hewlett-Packard may announce a bold plan as early as today to completely remake the company -- shedding its PC unit and acquiring enterprise software company Autonomy Corp for $10 billion.

The company may announce its plans for the acquisition and spin-off as early as today, according to Bloomberg, which reported the news Thursday afternoon.

The news agency cited people familiar with the company's plans for the story, saying they asked not to be identified because the plans aren't yet public.

If such moves play out, HP will dramatically change the profile of the company -- looking more like rival IBM.

HP is scheduled to report earnings Thursday after the market close. The company's stock was trading down 3.63 percent, or $1.14, to $30.29 when the news came out.

Autonomy Corp. is an enterprise software company with joint headquarters in the UK and San Francisco. The company develops and distributes infrastructure software for enterprises worldwide. Its products include an intelligent data operating layer (IDOL) server that collects indexed data from connectors and stores it in its structure.

The company serves media organizations, e-commerce providers, telecommunications providers, finance and banking professionals, government and public sector agencies, and many more. Autonomy Corp. PLC was founded in Cambridge, UK, in 1996.

HP has been in the news lately for the flop of its new TouchPad tablet, intended to take on Apple's iPad. But a month after the product's launch, HP discounted the TouchPad $100 in the effort to boost sales, but it didn't work. Now, the company is facing heavy returns, as retailers like Best Buy reportedly have thousands of unsold TouchPad tablets they want to return.

The company's PC business has similarly been haunted by sluggish sales this year. The company predicted in May that future growth in its PC business could be dampened.

The PC market continues to be bifurcated, HP's chief executive, Leo Apotheker, said in May in a conference call with analysts. He said even though our consumer PC expectations had been cautious, the steepness in our (second-quarter) decline is greater than we had anticipated.