Following Bloomberg's report yesterday that Hewlett-Packard Company (HPQ) was on the verge of firing embattled CEO Léo Apotheker, comes official news [press release] today that the Board has finalized the plan.  Mr. Apotheker is out, accomplished Harvard Business School grad and former eBay, Inc. (EBAY) CEO Meg Whitman is in [press release].

I. Apotheker: a Careless Choice?

HP's odd journey began last August when it was rocked by a lawsuit filed by celebrity lawyer Gloria Allred on behalf of former adult actress turned contractor Jodie Fisher, who accused the company's accomplished CEO of sexually harassing her.  HP made the hasty decision to drop their CEO, Mark Hurd, despite his successful track record, and rival business software maker Oracle Corp. (ORCL) hastily scooped Mr. Hurd up, naming him a co-president.  HP agreed to pay Mr. Hurd between $28M and $50M USD in severance benefits, depending on whose numbers you trust.

The Board at HP, the world's top personal computer maker, was then left fumbling for a replacement chief.  Former HP Board Chairman Tom Perkins complains in an interview in The New York Times, "It has got to be the worst board in the history of business."

Mr. Perkins wasn't alone in that sentiment.  The NYT report cites other insiders as complaining about "animosities, suspicion, distrust, personal ambitions and jockeying for power" by the Board at the time.

As a result the board picked Mr. Apotheker an unlikely candidate for the job.

To begin with Mr. Apotheker was German and had little experience in the American market.  And he had even less experience in selling hardware, having only briefly sold casino electronics at a previous position.  

But the really baffling aspect of the hiring was that HP recruited Mr. Apotheker after an abysmal campaign at top German software maker SAP AG (ETR:SAP), which saw him terminated only 10 months after becoming CEO.  At SAP he steered SAP into its first loss in seven years, faced backlash for failed price increase attempts during the recession, clashed with unions, and allegedly oversaw the theft of intellectual property from Oracle that cost SAP $1.3B USD in damages.

II. Apotheker Steers HP Into a Downward Spiral

Despite that less that gleaming reference, the Board finally agreed that Mr. Apotheker was the best person for the job, of the four candidates considered.  Except, they apparently never bothered to even interview him, according to The NYT report.  States one executive to The NYT, "I admit it was highly unusual. But we were just too exhausted from all the infighting."

During Mr. Hurd's reign HP saw five years of consecutive gains and a 130 percent rise in stock prices.  By contrast Mr. Apotheker's tenure reminded many of reviled former HP CEO Carly Fiorina; under his leadership HP slashed its sales outlook three times and saw stock prices plunge 47 percent.

But the losses were only part of the picture.  Last month Mr. Apotheker announced HP's decision to pull out of the increasingly lucrative mobile market, killing the webOS product line, which HP had paid $1.2B USD to purchase just year before.  The death of HP's TouchPad tablet -- the first modern webOS tablet design from HP -- came just over six weeks after it hit the market.

In an even more bizarre twist, Mr. Apotheker announced that HP would be selling or spinning off its core PC business, which most deeply associate with HP's brand image and history.  Instead, HP would spend $10.3B USD to buy UK software maker Autonomy, Corp. Plc. (LON:AU) and would focus solely on the higher margin enterprise servers and software.  Essentially Mr. Apotheker envisioned HP becoming SAP 2.0 and vying with Oracle and International Business Machines, Inc. (IBM).

Mr. Perkins, HP's former board chairman, accused HP of working to commit "corporate suicide" with the wild plan.  And HP's shareholders filed a class action suit accusing HP of defrauding them by failing to disclose the radical corporate makeover in a timely fashion.

In the end the Board caved.  Mr. Apotheker won't get the chance to see that outlandish plan through to its bitter end as he has found himself dismissed from the CEO spot at a top company for the second time in under a year.  In the world of CEO's the word "fired" is seldom used -- instead euphemisms like "declined to renew contract" or "parted ways" are applied.  But for all intents and purposes the last two years have seen Mr. Apotheker assume CEO positions at two top global firms, and be fired from each in under a year for poor performance.

III. Meg Whitman: HP's Hope for Salvation

Turning to the new CEO Meg Whitman, she has a much better track record, though she is not without her own early detractors.  

Having received an M.B.A. from Harvard Business School, Ms. Whitman went on to work as a manager/executive at The Walt Disney Company (DIS), DreamWorks, The Procter & Gamble Comp. (PG), and Hasbro, Inc. (HAS), before joining eBay, Inc. (EBAY) in 1998.  In 1998 eBay had revenue of $4M USD and only 30 employees -- in short a promising, but tiny up-and-coming web startup.  By the time she left in 2008, eBay had revenue of $8B USD and 15,000 employees.

Her campaign at eBay was not without criticism.  Some complained about slowing revenue growth towards the end of her CEO run.  And under her leadership eBay reportedly overpaid to acquire video calling firm Skype Technologies SA after getting in a bidding war with Google Inc. (GOOG) and Yahoo! Inc. (YHOO).  However, eBay did end up turning a profit on the purchase, when Microsoft Corp. (MSFT) decided to pay even more for Skype, boosting the return on eBay's remaining stake.

Some benefits of Ms. Whitman are that she's deeply familiar with the overall American business market and that she has diverse executive experience having worked at a toymaker (Hasbro), a pharmaceutical company (Procter & Gamble), and, of course, an online retailer (eBay).  EBay's market cap is similar to HP's, given the latter's currently depressed stock value.

A potential downside is that she's never worked at a computer-maker before.

Ms. Whitman's campaign at HP, which would eventually culminate in being awarded her new CEO position, began after she lost her 2009 bid to become the governor of California.  In January 2011 she joined the HP board, hoping to help reform the struggling firm.

She must now figure out how to right the ship and decide what to do with Mr. Apotheker's controversial plans to kill webOS devices and spin off the PC unit, the Personal Systems Group.  For webOS fans, Ms. Whitman's arrival could lead to a webOS revival, though that may be unlikely given recent layoffs.

HP is far from out of the game.  It's still the world's top seller of PCs and has a strong brand name both with home and business users.  That said, if the board is as dysfunctional as The NYT report indicates, HP might see more future struggles, regardless of how Ms. Whitman performs.