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Tuesday, October 12, 1999 Published at 16:46 GMT 17:46 UK

Business: The Company File

Compaq exudes confidence

The world's biggest PC maker has been in some difficulties

by Richard Quest at Telecom 99 in Geneva

The chief executive of Compaq Computers, the world's largest maker of PC's, has only been in the job for a couple of months - but he's already making waves.

The telecoms revolution
He's trying to re-invent Compaq, which in recent years has lost money as it struggles to come to terms with the Internet, and more quick-footed competitors.

The last chief executive, Eckard Pfeiffer, was sacked by the board of directors who had lost confidence in his ability to turn around the giant PC maker.

Michael Capellas:"We have a bunch of hidden jewels"
Now Michael Capellas is focusing on what works and getting rid of what doesn't.

Speaking to the BBC at Telecom 99 he said "we have unbelievable assets and we need to be clear about which businesses we are in and which we are not. "

Internet focus

With that in mind he has already re-directed much of the business and given it a new Internet focus.

[ image: Compaq head Michael Capellas]
Compaq head Michael Capellas
Mr Capellas is in no doubt, the Internet is at the heart of Compaq's future.

"We are just at the dawn of the Internet age, and the current carriers are still a lot of 'bubble gum and binding' companies which are keeping it together," he says.

Instead he talks about "taking the internet to the next stage" where giant companies like Compaq with their huge resources would play more of a role.

For instance, he believed that e-commerce, still in its infancy, would be "explosive" and that's one of the areas where Compaq would make its money.

Big challenge

He has his work cut out for him.

Compaq now has a stench of failure about the company.

Its share price is down more than 30% from its highs, and newer, nimbler companies seem to be eating its business.

That doesn't worry Mr. Capellas. He believes that the main thing that is needed to turn the company around is better marketing and presentation.

"Am I concerned that we have to drive public relations? Absolutely. Am I personally committed: Absolutely. Can it be done. Absolutely," he said.

The company's shareholders are certainly hoping he is right.

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