Fiorina, 46, took the helm of HP just over two years ago after leaving her post as president of Lucent's largest and fastest-growing division with more than $20 billion in annual revenue.
One of the few women to hold a top post in the tech industry--or in corporate America, for that matter--"Carly" and HP's board anticipated it would take three years to reverse the company?s sliding fortunes.
With one year to go, that quest has proven largely quixotic, as Silicon Valley pioneer HP has been buffeted by a brutal price war in PC and printer sales and by stiff competition in servers and services.
In July, the troubles culminated in an announcement that HP would cut 6,000 jobs and that sales would fall below last year's levels by 14 percent to 16 percent.
"Think of all geographies as weak. There are no exceptions," Fiorina explained at the time. "I don't think we can call when a recovery will occur."
In some ways, the July announcement highlighted Fiorina?s dilemma: The hardware business is sliding, but the company has been unable to expand into the services market in any significant way.
Last September, for example, Fiorina sought to aggressively push into services by acquiring the consulting business of PricewaterhouseCoopers in a deal valued at up to $18 billion.
The acquisition was touted as allowing HP to provide businesses with everything from servers, services and software to systems for e-commerce and Internet operations. The primary competition in those markets were IBM, which maintains one of the largest consulting groups in the world, and Sun Microsystems, a hardware manufacturer that is also pushing into consulting.
In an apparent vote of confidence in her gambit, less than two weeks after the acquisition was acknowledged publicly, Fiorina was elected to HP's board of directors.
However, in a stunning setback, the proposed deal was withdrawn in November, sparking speculation about Fiorina's effectiveness.
Despite HP's ongoing troubles, one of the company's directors recently explained why the board has taken a patience-is-a-virtue approach with Fiorina.
"In the early summer of 1999, when we were interviewing Carly (for the CEO post), we discussed it would take a minimum of three years to turn things around and there would be lots of ups and downs," George Keyworth II, an HP director and also chairman of public policy research institute The Progress & Freedom Foundation, said in an interview. "We are absolutely behind her and know there will be challenges.
"We asked Carly to make a series of changes that were long overdue--something we called a major modernization of the company," Keyworth said. "We felt we had missed the Internet and wanted to reinvigorate the company."
While HP's shares have sunk by about two-thirds from their peak, Keyworth noted that the entire industry has been depressed. "The financial performance is not where we want it to be, but, overall, its performance is very much in tune with the times," he said.
Because the downturn has been so widespread, Keyworth also said Fiorina's three-year recovery plan may have to be extended.
Whether Monday's proposed $25 billion acquisition of Compaq will buy her the time to get her plan back on track is up to employees, customers and shareholders to determine.
Forrester Research analyst Charles Rutstein said concerns about Fiorina's future were legitimate. "The Street was getting remarkably tired of the story Carly was not turning around HP," he said. "There was some reason to expect some change of management there.
"On the other hand, this opens up some breathing room," Rutstein said. "There's now at least another year in which Carly can prove she can do this job. If nothing else, she bought herself some more time."
CNET News.com's Joe Wilcox contributed to this story.