As transcendent as the company's product and design decisions were, its business decision-making was always problematic.

It all started when the founders of Palm raised money for the first product launch by selling the company to modem giant U.S. Robotics in 1995. The founders gained the cash they needed, but lost full control of both the company and the product -- forever.

One year after U.S. Robotics was acquired by 3Com in June 1997, the founders left the company in disgust and launched Handspring, which eventually developed the first good mass-market smartphone, the Treo. 3Com made Palm an independent, publicly traded company in March 2000. In January 2002, Palm disastrously spun out its software division as an independent company called PalmSource. Then, in August 2003, the company merged with Handspring and renamed itself PalmOne. In April 2005, the company, now called PalmOne, spent US$30 million to buy the "Palm" trademark from PalmSource, and changed its name back to Palm. In December 2006, Palm paid $44 million for access to the Palm OS source code it used to own, so it could make its own software again.

See the trend?

Palm merges with another company only later to be spun off. The company ignores the founders' direction, only to later acquire their startup and take up their direction. Palm spins out the software division only later to buy back the rights to it. Palm gives up the Palm trademark only to later buy it back.