– Eric Auchard is a Reuters columnist. The opinions expressed are his own — The stock price seems to be the only thing growing at Hewlett-Packard, the world’s largest computer company. HP shares have risen 75 percent this year, despite few signs of a revival in technology spending.The company, best known as a supplier of computer printers, has suffered a 19 percent drop in sales of hardware and ink supplies. In good times, this produced the bulk of HP’s profits, but it’s the financial engineering under Mark Hurd, the company’s chairman and chief executive, that seems to be the main driver now.So far, he has cut 16,000 of the planned 25,000 redundancies. It has taken roughly $3 billion in restructuring charges. This has masked underlying sales and profit weakness in its personal and corporate computer divisions.Excluding the impact of the acquisition of computer services company EDS nearly a year ago, the company’s remaining businesses declined nearly 20 percent during the fiscal third quarter ending in July.Hurd remains vague about when the recession may hit bottom.”We’re encouraged by the stability that we’re beginning to see in the market but not yet at a point that we’re ready to call it a turn,” Hurd told investors on a conference call following HP’s quarterly report.The benefits from cost-crunching at EDS have kept the company muddling along through 2009. HP reported total revenue for its third quarter ended in July fell 2 percent worldwide, but grew 4 percent, excluding currency effects.Investors, which have returned HP’s stock to $44 — near pre-financial crisis levels — are now counting on a 2010 rebound to support the stock.Hurd says U.S. businesses appear to be spending again on new projects and upgrades of aging computer infrastructure. But Europe has yet to show improvement.Europe, which accounts for nearly 40 percent of the Silicon Valley-based company’s global revenues, declined 12 percent in the latest quarter, hurt by the weaker dollar over the past year. This was partly offset by 8 percent growth in the Americas and strength in China.”The U.S. is beginning to do refresh work and you’re seeing that show up in the numbers. Things are still not as robust in Europe,” Hurd said.The company is deferring questions about its longer-term outlook until September, when it holds its annual analyst meeting. Outside of a strong cyclical rebound, HP needs to answer how it plans to grow after it finishes with cost cutting at EDS.The danger next year could come from any success it shows in signing new, long-term contracts at EDS. That’s because upfront investments needed during the first year of big consulting deals can be steep, with payback only coming later in the life of what are typically five-year contracts.Half of HP revenues now come from maturing businesses like printers and PCs. No cyclical rebound in these businesses can disguise the need for the company to reinvent itself in new growth markets. Restructuring magic tricks can’t support the stock much further.– At the time of publication Eric Auchard did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. —

Some tech links to start the week:

I am seriously considering changing my byline to Zing, what with all the media attention a certain search engine is getting.

The New York Times looks at the ups and downs of turning brands into verbs. The jumping off point is Bing, Microsoft’s effort at verbal one-upsmanship over Google, Twitter and over generic daily activities. The software giant must alter deeply ingrained computer habits to succeed. In the meantime, my original questions about Bing remain.

The more substantial news this week would be if Microsoft finally inks a search and advertising partnership with Yahoo Inc. It’s not easy to overcome deal speculation fatigue — it’s been a year-and-a-half since Microsoft sought to acquire Yahoo outright, and a year since it dropped back to Plan B and sought out a more limited partnership deal. Boomtown reported Friday that Microsoft is down to a few short strokes away from signing.  Henry Blodget makes the point that Microsoft may have to pay up far more than the $1 billion it was offering a year back for such a deal.  Closing a deal now suggests renewed desperation on Microsoft’s part after the paltry gain it received from Bing in June market share statistics for U.S. web search.Beyond the personalities and the history that have kept Yahoo and Microsoft apart, there is the little matter of an advertising recession  that will delay any short- or medium-term rebound in either company’s online advertising fortunes. AOL Chief Executive puts any resurgence in online advertising out to 2011 in an interview published by Reuters on Sunday.UBS has published its quarterly survey of corporate technology spending intentions. The study of 100 U.S. and European CIOs finds these buyers slightly more optimistic about their budgets during the second quarter than they were earlier this year.  Among the more interesting findings:

• U.S. spending appears to be improving while European discretionary IT spending is declining.
• IBM and HP/EDS will take the lion’s share of any increased spending by CIOs on computer service, while Accenture, CSC and Indian software services companies all stand to see far less.
• Only a handful of software companies can expect to see increased net spending in the next 12 months: Microsoft, SAP, Citrix and Oracle , to a far lesser degree. Out of favour are technologies such as security, software as service and voice recognition.
• Dell saw a big gain among buyers more likely to spend with it.  The Q2 survey showed 21 percent of buyers more likely to buy, up from 12 percent in Q1. UBS pins this increase on Dell’s willingness to slash pricing.

The biggest surprise is the gulf emerging between the U.S. and Europe over plans to upgrade to the next version of Windows 7, due out in October, UBS finds. More than half of Europeans have no plans to upgrade to Windows 7, while closer to a quarter of U.S. buyers have yet to make plans. (Click to enlarge graphic)

There needs to be at least a hint of political scandal for serious public policy discussions to qualify as news these days. Which is why reports that patients in the UK’s national healthcare system might be granted some some say in managing their personal health records after the next election gets largely lost in discussion of close ties between Google and Britain’s Conservative Party. This is a shame, because public debate over the promises and perils of electronic health record technology are long overdue. ******The tempest concerns Steve Hilton, considered one of Tory party leader David Cameron’s closest aides, who is married to Rachel Whetstone, Google’s vice president of global communications. The suggestion in some reports is that these links will make it difficult for the party to include Google in any plan to give citizens the choice of storing their health records with private companies such as Microsoft or top UK private insurer Bupa. Google would have to get busy quick, as currently, its health records service is designed only for the United States. And it has had trouble gaining traction there. As an opposition party, the Conservatives’ views on the subject are relevant because they currently enjoy a wide lead in polls over who might win the next national elections.******Electronic health records could offer broad benefits, if ever implemented.  But many issues must be resolved. The medical profession has long resisted adopting any plan that would help patients second-guess treatment decisions by their physicians. There remain vast problems with how to incorporate old medical records with any degree of accuracy into an electronic record. There are nagging questions about how to create common formats to share all the different types of information that might be included in a health record — from scribbled prescription orders to faxes to database records to X-rays and so on. There are commercial issues over how to balance the interests of patients, medical providers and “payors,” or insurers. Then there is the chicken and egg question of how to get these institutions involved and who will move first. Perhaps the most cripling issue is patient privacy and how to ensure that intitmate personal information is not released. ******In an April speech at the Conservative Party’s spring conference, Cameron spoke of replacing the National Health Service’s (NHS) centralized patient database with a distributed patient health record system that grants some powers to patients to manage their own information. He claims a private plan would “cost virtually noting to run”, in contrast to the Labour government’s £12.7 billion current upgrade of health information systems that does not include measures to give patients more control over their records.***

“People can store their health records securely online, they can show them to whichever doctor they want. They’re in control, not the state.***And when they’re in control of their own health records, they’re more interested in their health, so they might start living more healthily, saving the NHS (National Health Service) money.***But best of all in this age of austerity, a web-based version of the government’s bureaucratic scheme services like Google Health or Microsoft Health Vault cost virtually nothing to run.”

***Paul Stevenson, a spokesman for the Conservative Party on health policy, confirmed his organisation has commissioned an independent report by the British Computer Society looking at issues involved in implementing a more decentralised approach to electronic patient records. He declined to comment on specifics of the party’s plan, but said a response to the BCS report will be released in a few weeks time. “What the report does look at is how to move to a bottoms-up approach in NHS computing rather than a top-down approach,” Stevenson said.******The public’s attention span is never long for complex medical issues.  Note the relative inattention paid to public health preparations since the global swine flu panic of April. As we head into the silly season of late summer news, expect medical privacy scare stories to reach a fevered pitch.  The near-term prognosis is not good. ******(Images: TheInsider.com; Times Online; Google Health)

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 New iPhones, expected next week, are likely to be overshadowed by the triumphal return of Steve Jobs as chief executive of the technology group.

No company and its products are more inseparable from its leader than Apple and Steve Jobs. His obsession with sleek design and an always hard to define “cool factor” has produced an unmatched string of hit computers, music players and, recently, phones.    

Lower prices rather that lots of fancy new features should headline the launch of new iPhone models at Apple’s World Wide Developer Conference in San Francisco on Monday.

What we do know is that Apple plans to introduce a new version of its software, iPhone 3.0, with 100 new features.

Netbook is a remarkably clear and memorable terrm as far as most computer industry jargon goes. Which is why, as with any hot product category, it’s hard for the computer industry to agree on exactly what it means.

Most people who started using the term over the last two years say it refers to a new class of tiny, low-cost, Web-connected computers.  That’s at least what Intel thought when it adopted netbook last year as a generic term.  

For this simple act of clarity, Intel must be punished. The ghost of Psion, the old handheld digital organizer maker, sued Intel for trademark infringement. It turned out Psion trademarked the term as far back as 1996 and sold a line of computers it called netBooks earlier this decade before discontinuing the line.

Microsoft Corp has never much liked the term, in part because the most succcessful early netbooks relied on Linux software rather than Microsoft’s own products. Microsoft is counting on its upcoming Windows 7 operating system to crush Linux-based models.

There’s not much news coming out of D7, the Internet executive chat fest, other than that Yahoo’s new CEO is willing to accept “boatloads of money” to sell the company’s Web search business, if Microsoft were willing to pay. They are still talking, sort of. But that is so-o-o last’s year’s story. Move on.

Confererence organizers Kara Swisher and Walt Mossberg are looking to stir up a debate by declaring that the Web 2.0 era of the internet is over and Web 3.0 is underway.  

We think something major is happening at the intersection of tech and media, and we think it deserves its own new hyped-up name: Web 3.0.

Their definition of Web 3.0 centers on the rise of cloud computing and the delivery of a host of Web services to easy to use mobile devices running simple clean software. The iPhone, Blackberry, Google, Twitter. In the absence of news, let’s dredge up an old buzzword.