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No one at Compaq or HP seems to be under any illusion about the arduous tasks ahead--blending their cultures, cutting costs ruthlessly (the target is $2.5 billion by 2004) and cracking the services market. Compaq founder Canion, for one, is cautiously optimistic. "These are strong companies being judged in a tough time," he says. At the very least, his baby's new mom has managed to defer judgment for a little while longer.
--With reporting by Cathy Booth Thomas/Houston and Julie Rawe/New York