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HP aims to reinvent printing business for Web

Some analysts have theorized that the Internet will lead to the paperless office, but Hewlett-Packard isn't going to sit back and let that happen.

SAN FRANCISCO--Some analysts have theorized that the Internet will lead to the paperless office, but Hewlett-Packard isn't going to sit back and let that happen.

In a series of new alliances announced today, the computing giant will work to integrate its huge printing business into e-commerce transactions and Internet use.

Under HP's vision, documents will be sent electronically and then printed, a reversal of the current systems in which documents are printed, then faxed or mailed to their destinations. ImageTag, NewspaperDirect, PrintCafe, Mimeo.com, Stamps.com, FedEx and EncrypTix.com have all signed on to work with HP.

"There will be millions of new reasons to hit the print button," HP chief executive Carly Fiorina said in a news conference today.

HP has either invested in the new partners or will share in those companies' revenue streams, Fiorina said. Those ties are classic examples of HP's "e-services" vision of tight alliances between itself and companies that provide services over the Internet.

The alliances today won't cause an immediate increase in HP's printer business, but the company's market dominance means it can afford to spend energy pursuing longer-term projects, said ARS Market Intelligence researcher Chris Barnes.

"This isn't going to make people run out tomorrow and double their print output, but it does set a stage for a potential of things to come," Barnes said. "When you own 60, 70 or 80 percent of your market, you tend to have the resources to devote to growth in these areas."

Through today's deals, HP hopes to preserve a franchise that plays a huge part in its bottom line. HP's printing and imaging business brought in $5.1 billion in revenues in HP's most recent quarter, a 13 percent increase over the year before. "Net revenue growth was driven primarily by strong sales of printer supplies," the company said in an SEC filing.

Increased revenue will come from printer sales and from greater demand for cartridges, ink and other products.

"(This) definitely will have an impact on the usage of printer consumables, including paper," Carolyn Ticknor, head of HP's printing and imaging division, said in an interview today.

Insurance policies, bank statements, plane or concert tickets, manuals, coupons, customized newspapers, catalogs and stamps all will be printed at the location of the person who wants them, Ticknor predicted.

If successful, it will mean a lot more ink. On average, printing documents from the Web takes two to three times as much ink per page as does printing ordinary files such as word processing documents, and printing digital photos uses 10 times the ink, HP chief financial officer Bob Wayman said in February.

HP's competitors also stand to gain from its advocacy of increased printer use. But the company, being bigger, will gain more, Barnes said.

In addition to the partnerships, HP announced two new printing products. One, the JetDirect 4000, is a special-purpose appliance to manage print jobs in corporate networks. The other is a device that will let medium-sized businesses take advantage of the software HP obtained through its acquisition of Dazel a year ago.

Dazel's technology allows documents to be faxed, emailed or delivered electronically depending on what the recipient prefers. It also tracks the delivery to make sure it succeeded.

The new printing initiatives and partnerships announced today include the following:

• NewspaperDirect allows people to print several newspapers even if they're far from where those newspapers normally circulate. The service is available in several hotels.

• Stamps.com and its subsidiary EncrypTix will let people print concert tickets, boarding passes, traveler's checks and other items with an actual value. Stamps.com already offers such services for U.S. postage.

• PrintCafe is an online marketplace where customers can bid for large print jobs. The service will use HP's electronic deal-making "e-speak" software.

• Mimeo is offering an outsourced printing service to let customers send print jobs electronically to its printing facility in Tennessee. The printed materials are sent from there by FedEx to their destinations. HP will pre-load Mimeo software on some desktop and laptop computers.

• FedEx will let people print electronic mailing labels with ink jet printers. Previously, customers could use only laser printers. HP is FedEx's "printer of choice" for such tasks, FedEx said.

• ImageTag will offer software to print special bar codes on documents so that when the documents are scanned, a computer will know automatically which electronic filing cabinets the document should be stored in and who should be allowed access to those documents.