EX-HP DIRECTOR’S BOOK OPENS WITH SCANDAL
EX-HP DIRECTOR’S BOOK OPENS WITH SCANDAL
2007-11-07 at 11:36:00 am #21046
Ex-HP Director’s Book Opens With Scandal
NOV 07 SAN FRANCISCO — Tom Perkins co-founded the firm that helped spawn Google, Amazon and Genentech. He married — and divorced — romance novelist Danielle Steel.
And his resignation from Hewlett-Packard Co.’s board revealed the spying that rocked that Silicon Valley institution.The venture capitalist has been relatively quiet since the effort by HP’s hired security consultants to ferret out boardroom leaks by spying on employees, media and directors exploded last year. Now, at 75, Perkins is returning to the spotlight with a memoir that starts with the HP scandal.A week before “Valley Boy: The Education of Tom Perkins” goes on sale, Perkins marveled at how the affair still generates headlines even though most of the criminal cases have been settled and the computer company’s business was largely unaffected.”These ladies just can’t stop taking whacks at me,” Perkins said of former HP CEO Carly Fiorina and Chairwoman Patricia Dunn, who left the board in the wake of the scandal. In an interview published last week, Fiorina called bringing Perkins back to HP in 2005 the worst mistake of her career.Perkins — a self-described “player,” “smooth operator” and “billionaire who writes books” — is usually direct like that, and self-assured. “Valley Boy” is his fourth book, after a textbook on laser science, a treatise on rare antique sports cars, and the novel “Sex and the Single Zillionaire.”
Sometimes, he can be brutal, a venture capital colleague said.
“If you want to stand up to him, you’d better be ready to, A, have your reasoning lined up and, B, be ready for a very emotional confrontation,” said Franklin “Pitch” Johnson, 79, who has known Perkins since the 1970s when they funded Tandem Computers, where Perkins remained deeply involved.A 1953 electrical engineering graduate of the Massachusetts Institute of Technology with a Harvard MBA, Perkins said his greatest legacy will be co-founding the iconic venture capital firm Kleiner and Perkins in 1972. From an $8 million fund, it grew over the following three decades into the multibillion-dollar force now called Kleiner, Perkins, Caufield and Byers.
The 525 businesses the firm has helped nurture include AOL, Amazon Inc., Sun Microsystems Inc., Intuit Inc., Verisign Inc., Google Inc. and Genentech Inc., where he stayed on as chairman of the board for 10 years. What set apart his style of funding companies, he said, was an intense involvement in forming their strategy and management from the start.Perkins’ on-again, off-again history with HP goes back decades. In 1963, co-founders Bill Hewlett and Dave Packard invited him to become the administrative head of the research department. He was the first general manager of its computer business.He says that when he rejoined the board — for the last time — at Fiorina’s urging in January 2005, the celebrity CEO and the board were struggling over the direction of the company since it acquired Compaq Computer Corp. Fiorina was out a month later and Dunn took over as chairwoman.”She still doesn’t get it: The day she was fired, the stock went up,” he said of Fiorina. “The employees were in the parking lot singing, ‘Ding, Dong, the Witch is Dead.’ And she still doesn’t understand that she bears some responsibility for that. It’s amazing.”
Fiorina’s spokesman did not return calls seeking comment. Dunn’s spokesman said she has commented about Perkins only to correct the record.
Perkins said he pushed the new chairwoman to think strategically. Instead, he says, she insisted on focusing on audits, legal compliance and the media leaks that started with Fiorina’s departure and continued after her replacement as CEO, Mark Hurd, was hired.Perkins said he worried that minutiae were obscuring the bigger picture — that HP was continuing to struggle with intense competition, a sagging stock price and low morale more than three years after completing the purchase of Compaq.
“Dell Computer was killing us at the lower end of the market and IBM was beating us up at the higher end of the market, and the whole corporation was getting scrunched between these two very excellent, growing, powerful companies,” Perkins said he kept reminding the board.Perkins quit the HP board in May 2006, after Dunn revealed that security consultants — by using false pretenses to obtain phone records — determined fellow director George “Jay” Keyworth had spoken with the tech news site CNet.com. Keyworth was asked to resign but didn’t.
Perkins insisted last week, as he did in 2006, that the story that appeared was harmless.
Keyworth left the board when the spying became public in a September 2006 regulatory filing. The filing was prompted by an August letter from Perkins, who said he might tell the Securities and Exchange Commission that HP was violating disclosure rules by not saying he quit over the spying.”I just felt that what the company was doing … and the sacrifice of Director Keyworth, who in my opinion was the best director on the board, was throwing him to the wolves over essentially nothing.”Perkins learned in the interim that investigators had pretended they were him — or pretexted, as they’d done with journalists and other directors — to get his personal phone records.He still guards his privacy in some matters — what private boards he belongs to or how much his sailboat cost, for instance. The memoir is a smattering of vignettes, including an account of commissioning the 289-foot, three-masted clipper ship — the world’s largest sailboat.”Valley Boy” also includes a mock Q&A about his experience as novelist Danielle Steel’s fifth husband.”It was the intensity and the chaos,” he said during the interview in his Embarcadero Center office to explain their divorce. “Danielle and I still love each other. We see a lot of each other, and it’s really too bad that it didn’t work, but it didn’t.”