September 15, 2006 10:34 AM PDT

Week in review: Dunn leaving, but probe continues

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Hewlett-Packard's "pretexting" investigation into media leaks cost Chairman Patricia Dunn her job.

Following two days of meetings by HP's board of directors, the Silicon Valley icon announced that Dunn, whose probe of board members, employees and journalists created a firestorm of controversy, had agreed to resign her post. The board has appointed CEO and President Mark Hurd to take over for Dunn, who will continue to serve as chairman until January.

HP also announced that George Keyworth is resigning from the board, effective immediately. Dunn earlier this year had identified Keyworth as a source of media leaks.

Over the course of the week, it came out that the investigation to find the source of media leaks involved possibly illegal access to phone records of the company's directors, at least nine journalists and, potentially, many other people. As a result, federal and California state prosecutors launched investigations, and civil lawsuits and criminal charges are possible.

Some CNET readers expressed satisfaction with the decision, but others were disappointed that Dunn's departure wasn't immediate.

"So she steps down as chairman, but still remains on the board? What punishment is this?" wrote one reader to the TalkBack forum. "They just don't get how serious of a crime this is."

HP's probe also extended to the company's employees. In a videotaped message to staff, Dunn said the same techniques that were used to obtain details about HP directors and journalists were also used on two employees. An HP representative confirmed that two current employees had their personal records targeted, but would not identify them or say which records were accessed.

The Department of Justice has launched a probe into the techniques HP used to identify the source of media leaks, and a U.S. House of Representatives committee is planning a special hearing on the company's conduct. On Friday, the panel asked Dunn and HP general counsel Ann Baskins to appear at the Sept. 28 hearing.

Media in the mix
Apple Computer overhauled its digital music and video offerings, introducing new iPods in three categories and announcing plans to make movies available for purchase through the iTunes store.

Movies from four studios owned by The Walt Disney Company will be available on iTunes 7, the new version of the download software, the same day they are released to DVD, Apple CEO Steve Jobs said in outlining the new offerings at a product showcase in San Francisco. Preorders and movies purchased in the first week will cost $12.99; the price then bumps up to $14.99 for new releases.

Special coverage
Showtime for Apple
At event in S.F., it's all
about iPods and movies.

Apple also plans to introduce a product in the first quarter of 2007 that lets consumers stream their movies or music to televisions, Jobs said. The new device, code-named iTV, has 802.11 wireless built in. It will sell for $299 and works with PCs and Macs. "We think it completes the picture here," Jobs said.

Meanwhile, Microsoft took the wraps off its Zune media player, though what's underneath is largely what enthusiasts had come to expect. The device, which the company anticipates will be ready in time for the holidays, will come in three colors and be capable, via its built-in Wi-Fi, of sharing full-length songs with other nearby Zune devices, the software giant said.

See more CNET content tagged:
chairman, Steve Jobs, Patricia Dunn, pretexting, Week in review


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Company Probity
We live in a society that demands transparency and trust and HP has promoted itself on adherring to the highest of values. To suddenly deal with such public breach of trust and tarnishing of its image, at the highest level, in such a soft-handed way suggests a cover-up and a knowing, wink-wink, "everything's going ot be ok" approach. Well, consumers vote with their feet. There is only one reasons why we may choose HP products over any cheaper clone using identical chips and almost the same quality and it has nothing to do with the pricing point. We liked the company. We liked what they were trying to do and what they stood for. When they fail our trust at such high level ... well, Dell is only a click away. Never mind investor confidence and share price wobbles, try swallowing dropping sales next quarter and then we'll see what price they can put on trust, image and the way they view their standing in society and its values, as a company.
Posted by davidamerland (7 comments )
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So Dunn was fully aware!!!
>>>Dunn said the same techniques that were used to obtain details about HP directors and journalists were also used on two employees<<<

Then there's no two ways about it... she either steps down upon her own accord or gets booted out by the rest.

Otherwise... it shows HP has an incompetent board of directors which needs to be replaced ASAP!!!

Posted by wbenton (522 comments )
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