Brian Proffitt of Read Write Web reports, “A year after Hewlett-Packard’s head-scratching acquisition of semantic-search company Autonomy for $10.3 billion, the move seems to have blown up in HP’s face. HP is admitting today ‘serious accounting improprieties’ by Autonomy. Serious indeed. HP’s fourth-quarter earnings will reflect an $8.8 billion write-down related to the improprieties. Overall, HP is reporting a 4Q loss of $6.9 billion, a bad skid for a company that seems more out of control every day. When the deal was initially brokered by HP’s then-CEO Léo Apotheker in August 2011, there were a lot of ‘what the hell?’ comments flying around. HP had just bought a UK business that did not seem to fit HP’s business model.”

Proffitt continues, “Recall the context of the announcement, too: HP had just shut down TouchPad and webOS development and its printer supply chain was reeling from the Japan tsunami. Having put so much effort into webOS and then dumping it when it failed to rocket out of the gate, HP seemed to be throwing away its mobile strategy only to buy a data company, for an amount equivalent to 11 times Autonomy’s revenue levels (which, if HP’s accusations are true, were greatly overestimated). Bluefin Solutions Ltd.’s head of Business Analytics & Technology John Appleby called the decision ‘bizarre’ at the time. ’It’s a stand-alone software company that does niche database-search products and sells to some big customers. Great, it will diversify HP’s software business, but I don’t see the attraction of such a niche,’ Appleby wrote.”

Read more here.

Image: Courtesy HP