IBM's shift from hardware to services (1993)
With mainframe sales collapsing and losses mounting, new chief executive Lou Gerstner steered IBM away from selling machines toward software and services. He kept the company whole rather than breaking it up, betting on a very different revenue mix.
IBM cut tens of thousands of jobs and posted heavy losses during the transition.
Services became IBM's largest business and the company returned to sustained profit for years.
Baidu faces the same test: rebuilding its revenue base around a new business while the original engine fades, without losing money faster than the new one grows.
