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Can Whitman save H-P?

Fresh off an unsuccessful and costly run for California governor, Meg Whitman last fall took the helm of Hewlett-Packard Co. as its fourth chief executive in little over a year.

The storied technology giant was in desperate need of a turnaround after a series of missteps and internal dysfunction. For Whitman, who failed to catch on with voters after spending $144 million of her own money, it was a chance to return to familiar territory in Silicon Valley, where she had first made a splash with auction site EBay Inc.

But six months into her tenure at HP, analysts say they've yet to see real improvement at one of the world's largest computer makers. Many are concerned by Whitman's assertion that it could take years.

"If we had to grade how she's doing so far, I'd say it's mixed," said Shaw Wu, an analyst at Sterne Agee. "People aren't really sure if she's the one."

Whitman hasn't impressed Wall Street yet. HP's stock has fallen nearly 10 percent this year, while the tech-heavy Nasdaq has soared 18 percent. In February the company reported a 44 percent decline in profit and a 7 percent drop in revenue in its first full quarter under Whitman.

"The company hasn't really articulated much of a strategy yet," said Richard J. Kugele, a tech analyst at Needham & Co.

Whitman, 55, declined to be interviewed for this story.

But she has been frank about the company's troubles, telling analysts in February that "we underinvested in innovation for the last several years and we've been late to market too often.... The business is being pressured on multiple fronts."

HP was founded in a Palo Alto garage in 1939 and today employs about 350,000 workers. In addition to its personal computers, servers and printers, the company became known for an egalitarian culture dubbed the "HP Way" by founders Bill Hewlett and Dave Packard.

But the firm has fallen behind its rivals in recent quarters. Profits and employee morale have slumped, and instability at the top has added to HP's woes. Former CEO Mark Hurd, credited with rebuilding the company after the tumultuous tenure of Carly Fiorina, abruptly resigned in 2010 after accusations of sexual harassment and falsifying expense reports to conceal a personal relationship with an independent contractor.

Hurd was succeeded by an interim CEO. Then came little-known Leo Apotheker, who lasted 11 months. His time at HP was marred by unpopular decisions, including a plan to exit the company's tablet and PC businesses, and reports of infighting on the board. HP shares plummeted 46 percent during his tenure.

After Apotheker's ouster, HP turned to Whitman, a company board member. The billionaire had proved she could grow a business after joining EBay in 1998 and turning it from a start-up with 30 employees into an $8 billion household name with 15,000 workers.

"I'd bet on her over most people in the world to go fix something, but she didn't take a slam-dunk for sure," said longtime friend Maynard Webb, whom Whitman hired to be president of EBay Technologies in 1999; he later became chief operating officer.

Since she took the job, Whitman has reversed some of the changes Apotheker introduced, most notably his plan to spin off the PC operations. She streamlined several business units and has pledged to release HP's WebOS mobile operating system as open-source software by fall.

Like many big-name tech CEOs, Whitman opted for a $1 annual salary. She also received stock options, currently valued at about $14.8 million, that hinge on her ability to improve the company's performance.

"She's come in and really made a concerted effort to bring back the HP Way," said a business planning analyst in the company's Cupertino, Calif., office.