I wrote a few days ago about the Intel anti-trust settlement with the Federal Trade Commission. Those words stand unchanged but some readers have asked for more so I have given the deal further thought and have what might be a better context in which to place it — Too Big to Fail. This isn’t “too big to fail” in the Bush/Obama big bank context in which failing and stupid institutions are saved at any cost to the public. Intel, in contrast, literally is too big to fail, at least right now.

Everything about the Intel/FTC settlement screams of one thing — Microsoft. Redmond’s multi-year nightmare with the FTC, DoJ, and the attorneys-general of several dozen states wasn’t lost on Intel, which is a more rational company and doesn’t want a Microsoft-like anti-trust experience. Both companies are guilty and both are paying something for that guilt, but Intel clearly wants to avoid the decade of pain and distraction suffered by Microsoft.

For the record, Intel admitted no wrong-doing in the settlement. But they also promised to specifically change their behavior.

What this settlement (and the previous one with AMD) does for Intel is clear the decks for future action. Now Intel can attack new market segments and be aggressive in existing market segments within the rules of the FTC deal.

Microsoft was paralyzed with the FTC breathing down its neck. Intel is not paralyzed.

Roughly $2 billion in payouts and Intel is a free bird — a rich free bird at that — having proved that crime does pay.

These settlements will effectively pay for themselves in two months at current Intel profit levels.

And as a result, Intel management bandwidth is now opened-up, hopefully not for more mischief.

Under the FTC deal Intel will open some patents to AMD and NVIDIA. This is healthy for Intel. If NVIDIA or AMD dies, Intel automatically becomes a monopoly subject to further regulation. So keeping NVIDIA and AMD alive and at least marginally healthy is in intel’s best interest. That’s an important take-away from this column: Intel needs AMD and NVIDIA.

Here’s the other big take-away: Intel has reached a scale on the cost equation where small volume companies can survive but not compete. AMD and NVIDIA survive by the grace of Intel, not despite it.

Intel’s latest gross profit margin is 65 percent!!! The company could easily cut prices and kill both AMD and NVIDIA. But Intel won’t do that. This realization ought to play an important part in AMD and NIVIDIA strategy. AMD gets that, but I think NVIDIA somehow doesn’t.

If NVIDIA and AMD maintain a few percentage points market share it is healthy for the entire ecosystem. Remember that as-is Intel is earning $3 billion per quarter. That’s Microsoft-scale money without the Microsoft-scale problems of a platform shift that risks leaving that company marooned.

This is all good news. So why hasn’t the market rewarded Intel with a big boost in its share price? Because conventional wisdom on Wall Street says that this freed-up management bandwidth will just help Intel launch another money-losing business. Remember the billions lost on Larrabee?

Conventional wisdom is often correct.

Vacancy at Hewlett-Packard

I’m sorry to have been so out of touch lately. The Startup Tour continues, of course, but this week I also have an Op-Ed article appearing in Sunday’s New York Times that I had to write. It is about Google and Verizon and may give a new perspective on recent events between the two companies. Look for it.

This week brought two other news events worthy of comment — Intel’s settlement with the Federal Trade Commission and Mark Hurd’s sudden departure as CEO from giant Hewlett-Packard.

The Intel story is almost as it is being presented in the trade and general press. Yes, Intel has promised in very specific ways to no longer be evil. No, Intel isn’t being made to give back the money it made as a result of being evil, so to a certain extent crime does pay. Of course some will say the money damages were in part covered by Intel’s recent $1.25 billion settlement with AMD, but the FTC also doesn’t generally impose fines. So if you happen to be guilty of anti-trust I guess it is better to be sued by the FTC than by the DoJ, which does impose fines.

Either way, Intel got away with something and the graphics chip makers in particular should be pissed.

One area where I think the press has it wrong, however, is in its interpretation of Intel’s promise to preserve the PCI Express bus. Third-party graphics cards use this bus and the fear of those companies is that Intel will simply replace PCI Express with some incompatible bus, making the third-party GPU chips and boards obsolete in the process. Now with the new FTC agreement they are promised at least six years before Intel deep-six’s PCI Express.

If only it were that simple. What the agreement actually says is that Intel has to preserve PCI Express for six years but not that it can’t introduce a new — and incompatible — graphics bus.

And that’s exactly what Intel will do. They’ll keep PCI Express but then add a new bus that’s wider and faster and generally better all-around. Even a mediocre Intel GPU that works on the new bus will have more than a fighting chance against NVIDIA or ATi (AMD) cards that work only with the older bus.

Why doesn’t the FTC see this? Because when it comes to the technical internals, they are stupid.

And speaking of stupid, super-smart HP CEO Mark Hurd got the boot this past week for filing improper expense reports and hitting-on a marketing consultant. There is no doubt that Hurd is (was?) the best big PC company CEO of his generation, a true genius who brought HP back not from the brink as Steve Jobs did at Apple, but back a long way back to PC market dominance while Dell self-destructed in response. But Hurd also appears to have had few friends at HP or he could have ridden-out this boneheaded thing or at least held on a bit longer.

Brilliance combined with power can lead to isolation and eventually to arrogance.  Hurd was arrogant.

I recall being asked to make a film for HP in the early days of Hurd’s reign and the people I spoke with fairly high up in the company were afraid of the guy. And now he’s safely out of the way so HP can return to sleep if it chooses.

I’m not saying Hurd should have stayed, just that his departure probably was worth the 10 percent drop in market cap that followed the announcement of his resignation.

The best way for HP to recover from this is, of course, to find a CEO even better than Hurd. That’s exactly what they did the last time, when Hurd replaced the hapless Carly Fiorina.

It will be much harder this time for HP to do the same.

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The U.S. Federal Trade Commission this week announced rules for bloggers who take money and various other forms of booty in exchange for reviewing products. Somehow I missed this business of selling one’s soul. But I think it is a good idea to take a moment and be straight with my readers about the limits of my journalistic ethics in this space.

I don’t take money for reviewing products because I don’t review products.  Never have, never will. So don’t send me any products, okay?

Publishers send me early copies of a few books per year, generally hoping I’ll either provide a quote for the book jacket or write a positive column about it.  I do accept such books but rarely write about them. If I give a quote it is never for money, mainly because I didn’t think anyone would pay. I was probably right about that.

I once sent a book of mine to Joe Bob Briggs only to have him give it away on his web site.  Tacky.

While it is true that I write for money, in the case of this page the only money comes from those ads you haven’t been clicking on.  I have no idea what those ads will be, by the way. They are served automatically by IDG Technet, which sends me each month a check that is pitifully smaller than I was led to believe it would be.

If you want to suggest a topic to me and accompany that suggestion with a gift or a check, it pretty much guarantees I won’t write about what you want me to. This is all part of my reverse psychology plan to get Microsoft to pay me $1 million to never write anything about them again.  So far that strategy is not working.

Bear Stearns (remember them?) once offered me money to participate in a conference call with their customers.  I had done such a call before for free to talk about my Google shipping container data center column but felt too much like a talking dog and didn’t want to do it again.  So they offered money.  I said “no.”  And of course Bear Stearns is now dead.  So be careful what you ask of me.

I write for other publications like the New York Times and they pay me, but so far that pay is not from vendors except in the case of Perforce Software, where I write a column for their company newsletter. But I’ve never written about Perforce here.  Until now that is. Does that mean the FTC will now arrest me specifically because of this disclosure? Sounds like a Star Trek episode.

Most of my income actually comes from giving speeches and participating in events like brainstorming sessions, many of which happen at companies I have written about.  Often I learn things at these events that are worth writing about, though strictly within the bounds of whatever non-disclosure agreement I’ve signed (violate NDA = wife takes kids and leaves).  So in this sense I do take money from companies I might write about.  But the companies never give me money specifically to write (except for Perforce, above) and they often don’t like at all what I end up writing. Screw ‘em.

The FTC rules say nothing about giving speeches or selling one-page screenplays for $2 million.  If they expand the rules in that direction, of course, I may yet be in trouble.

In that case there’s always pizza delivery.