HP-Compaq deal sees major PR reshuffling

PALO ALTO, CA: Hewlett-Packard's internal PR team was restructured

just a week before the news broke that the company would be merging

operations with Compaq.



Previously, the PR teams were divided into marketing organizations and

reported to individuals in specific areas. Now, all PR teams report to

the Judy Radlinsky, director of external communications. Radlinsky in

turn reports to Allison Johnson, VP of communications and brand

strategy.



Spokeswoman for HP Rebeca Robboy confirmed the reorganization, and that

all external PR agencies will now report to Radlinsky.



The merger announcement has generated speculation about how agency

relationships for the two companies will be impacted.



Compaq's PR agency of record is Hill & Knowlton, which won the account

in November 1999 after Compaq dropped Shandwick, its longtime agency of

record.



Weber Shandwick Worldwide is now one of four primary agencies working

with HP, representing the bulk of its business products in Europe, Asia,

and North America.



HP also retains Golin/Harris to work on its business-customer

organization.



Applied Communications handles corporate PR for the company, and The

Hoffman Agency works on HP's services, software, and servers, and

handles the North American regional PR program for enterprise

businesses.



The new entity will take on the HP name with CEO Carly Fiorina at the

helm, and will be structured around four operating units: imaging and

printing, access devices, IT infrastructure, and services.



The merger announcement took many by surprise, as the companies had kept

the deal under wraps. Investor and press reaction has been mixed,

particularly since both companies have suffered as of late.



"Carly Fiorina hasn't yet proved she can fix the giant Hewlett-Packard,"

reported The Wall Street Journal. "Can she now turn around an even

bigger conglomeration ...?" As of Wednesday, HP's stock was down to

$18.21, a 22% drop since the announcement. Compaq's stock has

dropped 16%, and is now trading at $10.41.



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