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HP, Compaq Deal Puts FCB on the Defensive

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NEW YORK -- Foote, Cone & Belding could stand to be the biggest loser should Hewlett-Packard go through with its plans to buy Compaq, sources said.

Traditionally, agencies that work with the acquiring company have the edge in maintaining the relationship. That, combined with remarks from HP CEO Carly Fiorina last week, doesn't bode well for FCB's future on the brand, sources said last week.

At a news conference, Fiorina said the HP brand would become the dominant one and intimated that Compaq could disappear altogether or at least be relegated to a "sub-brand."

"If the Compaq name is going away, so is the agency," said one source. But another executive said working out agency relationships would not be top of mind for Fiorina.

Executives at HP and Compaq had no comment on the future of their advertising accounts.

Indeed, the "sub-brand" possibilities for FCB on Compaq remain, as does the possibility of the merged entity's account eventually being put in review, sources said.

If that were to happen, FCB could be the weakest contender, said Marty Brandt, president of ProBrand. "HP has done brilliant advertising; Compaq has struggled for years," he said. "[Its] 'Inspiration Technology' [campaign] is not too inspiring."

HP's shops include Publicis Groupe networks Publicis and Saatchi & Saatchi, and Publicis & Hal Riney in San Francisco. The first two handle image advertising overseas, while Hal Riney handles worldwide product and promotional work. Goodby, Silverstein & Partners in San Francisco handles most of the estimated $160 million U.S. account. Publicis Groupe's Optimedia has worldwide media duties.

FCB won the $350 million global Compaq account in May 2000, and another source said the agency "is not just going to walk away," even if the Compaq name disappears.

Agencies on both accounts learned of the proposed deal through news reports last week, and at least one roster-shop executive was looking on the bright side. He said his initial reaction was, "Good, it's a bigger client on the horizon." --with Justin M. Norton and Todd Wasserman