Twelve years ago, Yahoo (NASDAQ:YHOO) was the face of dot-com success, a company that represented the profitability and potential of Internet-powered brands.
Six years ago, Research In Motion (NASDAQ:RIMM) was the face of the smartphone business, a company whose handheld devices and software were booming as enterprises and shaping the market for consumers who wanted to carry the Web with them in their pockets.
Today, Hewlett-Packard (NYSE:HPQ), though it remains the No. 1 PC maker in the world, has seen its once-booming PC business crumble in tiny increments, eaten away by swiftly changing trends. All three companies made their fortunes on technology that has been more effectively and profitably redefined by their competitors. All three have uncertain futures.
All three have brand new CEOs.
2012 is a make-or-break year for these humbled tech giants and their new chief executives. Will they make InvestorPlace’s Dow Leaderboard or go down with their respective ships? Here’s a look at the challenging road ahead.
Research In Motion’s Thorsten Heins
Under former co-chief executives Jim Balsillie and Mike Lazaridis, Research In Motion went from being a company adored by tech investors to the biggest laughingstock this side of Nokia (NYSE:NOK) in just about two years. The company’s principal competitors, Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG), have completely eclipsed RIM with their popular smartphones and mobile operating systems. RIM, in turn, failed to innovate as competition heated up.
New CEO Thorsten Heins didn’t exactly paint a reassuring portrait when he took control of the company on Monday morning. “I don’t think there is a drastic change needed,” said Heins, as he committed to keeping RIM’s business intact and on track with a new PlayBook tablet and a new version of the BlackBerry operating system due later this year. Heins believes all RIM needs is better marketing, but as the former operating officer at RIM, he should know better than anyone that the company desperately needs a change. RIM’s share of the global smartphone market shrank from 20% at the end of 2009 to 11% by the end of 2011.
Hewlett-Packard’s Meg Whitman
HP is standing on ice so thin it needs to tread extremely carefully to avoid plunging into the cold dark below. The company bet big on finding a place in the mobile market alongside Apple when it bought Palm for $1.2 billion in 2010. Those plans collapsed in August when its TouchPad tablet, which runs Palm’s WebOS mobile operating system, tanked at retail. The company flip-flopped on whether or not it would abandon the mobile market altogether, and even now under the guiding hand of CEO Meg Whitman, it’s unclear what HP’s plan is for this category. Whitman’s history with eBay (NASDAQ:EBAY) has some hopeful that HP can turn itself around, but HP has more to worry about than a failed mobile business. The PC market continues to shrink as it becomes cannibalized by tablets and smartphones. Gartner predicts that the PC market was flat in 2011, growing less than 1% overall. HP’s share of that market is eroding as well, falling from 18% in 2010 to 17% in 2011. That Whitman’s presence has improved confidence in the company at all is a good first step, but the company needs new product to rebuild.
Yahoo’s Scott Thompson
Meg Whitman isn’t the only executive from the eBay world who has been brought in to cure an ailing company. Yahoo named former PayPal president Scott Thompson its new CEO on Jan. 4. Thompson’s history with PayPal, a subsidiary of eBay, is strong. The Web-payments company saw its membership pass 100 million people under Thompson’s watch. He faces a Herculean task, though. Google and Facebook have diminished Yahoo’s presence as a destination on the Web—for both its search tools and entertainment services. Its share of the search market is just 14.5%, its share of the display ad market has crumbled to just 8%. Carol Bartz was brought on as Yahoo’s CEO in 2010 to try to create a core identity for the company and to trim its operations, a task that proved so difficult that Bartz was dramatically fired from the post. Thompson’s first order of business: ruthlessly trimming staff. After that, it’s unclear. Thompson has promised to further develop Yahoo’s presence on mobile devices, but what form that presence will take has not been revealed.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
