Eric Benhamou: The Saga Of Palm (Part 6)

SM: Was there was a lot of vision overlap between Palm and Handspring at the time of the acquisition? EB: Yes, this meant that essentially we were buying them back to have access to the smartphone product which was the Treo. The first Treo was an interesting product, but not a great product. It was the Treo 600, which had not been launched yet. In our opinion, it had great promise. This was what we were acquiring when we bought Handspring.

SM: In terms of pricing, did you get a discount because Handspring was in trouble? EB: No, I would not say we got a discount. I think we paid a fair price. Even though Handspring probably did not have that many options left, I think we paid a fair price in part because we wanted the team that we were acquiring from Handspring to feel that they were rejoining Palm with credibility, not because they had been squeezed out of options or had backed themselves into a corner. There was a question of dignity that we had to manage; we were planting the seeds for a more effective integration.

It was still a difficult thing to negotiate. When you have former founders who come back into the company who do not come back as CEO or top level executives, it is difficult. Jeff did not really re-engage as a full time employee. He became Chief Scientist, but not on a full time basis. Donna did not engage in a management slot at all, electing to remain as a Board Member. Nevertheless we had to integrate management teams and boards just like we had to integrate the two organizations at rank and file levels.

SM: How did you handle the issue of CEO? EB: This was a time when I thought Todd had demonstrated his worth and should become the CEO leading the combined company. I went back to my chairman role, and Todd was promoted to CEO. He oversaw the integration of Handspring which I think by and large was quite successful. We had relatively few casualties; we held on to the key talent. We introduced the Treo 600 which was a good product, the leading in its category, and we followed it with the 650.

We managed to gain very strong market share in the US. We did not have the carrier relationships we needed outside of the US. Even there, we became a close second to RIM in the smartphone markets. The post transaction period, the 2004 / 2005 timeframe, saw pretty good performance by the company. At some point, we had a difficult decision to make and Todd left the company as CEO.

SM: Why was that? EB: I am not sure how much of the boardroom discussions to disclose. Basically, several board members felt he did not have the vision required to lead the company into the future even though he had the operational skills at the time.

[To Be Continued]

[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 6 in the series : Eric Benhamou: The Saga Of Palm
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