Xerox technology chief Sophie Vandebroek is placing bets on technologies to spur growth. Image: Xerox

Xerox (XRX) PARC has come a long way. A generation ago, the Palo Alto Research Center famously developed many of the technologies that led to modern PCs from folks like Apple (AAPL) and Dell (DELL), but never got them beyond the lab. Today the unit is determined to get its inventions out of the lab, even if it means sacrificing secrecy.

To underscore that point, the company’s normally secretive Silicon Valley researchers and their colleagues from around the world held an open house this week to show off surprising projects they’re developing. Among them: A blood scanner that uses a twist on laser printing technology to spot rogue cells, a type of paper that can be erased by ultraviolet light and reused, and a new hybrid plastic that’s partly made of corn and grass.

As sales growth slows, the focus shifts to services

HP Executive Vice President Vyomesh Joshi wants to use software and services to drive printing profits. Courtesy: HP

Even during the bad times, Vyomesh Joshi’s printing business at Hewlett-Packard (HPQ) was the go-to place for good news. As recently as 18 months ago, the affable executive vice president’s unit accounted for more than half of the overall company’s operating profits.

But things have changed since HP’s dramatic turnaround took hold. HP’s computing group grew profits 75 percent in the October quarter by stealing market share from Dell (DELL) and riding the popularity of laptop computers. Meanwhile the Technology Solutions Group, which sells servers and other tech plumbing to big companies, is doing well too – last quarter operating profit jumped 31 percent to $1.4 billion. “Because of our footprint, because of our global nature, we are what we talked about in the fourth-quarter call,” Joshi says. “We are meeting our expectations.”

Which means Joshi’s Imaging and Printing Group no longer needs to prop up the rest of HP. It’s a good thing, too – because Joshi has his own transformation to worry about.

Inside HP’s plan to get more bang for its research buck

Prith Banerjee, former dean of the engineering school at the University of Illinois at Chicago, brings new ideas to his role as director of HP Labs. Image: HP

It’s a tale nearly as old as Silicon Valley itself. Nearly 30 years ago, a young Steve Jobs visited the scientists at Xerox’s Palo Alto Research Center and spied the first computer that had a mouse and desktop icons. Jobs soon commercialized similar ideas at Apple’s (AAPL), but Xerox couldn’t seem to take the brilliant concepts from its own labs and turn them into marketable products.

Today Hewlett-Packard (HPQ), the valley’s largest tech company, wrestles with a similar problem. Though HP’s advanced research group once invented wonders such as the scientific calculator, the thermal inkjet printer and commercial LED lighting, these days executives feel HP Labs and its $150 million annual budget could do more to boost the company’s bottom line.

In this example of how “Ads for Adobe PDF powered by Yahoo” will work, this photo club newsletter has ads in a righthand panel. Image: Adobe

We’ve got ads on web pages and ads in e-mail. Next will we have ads in digital documents?

Yahoo (YHOO) is beginning to publicly test a new type of online advertising it hopes will prompt publishers of newspapers, magazines and newsletters to let readers freely access their digital archives. As part of a fledgling partnership the company is announcing today with Adobe Systems (ADBE), Yahoo can now make its contextual text ads appear alongside Adobe PDF documents in a format similar to a search engine.

Adobe Systems (ADBE) CEO Bruce Chizen said earlier this year that the company would release a Web-based Photoshop product, and on Thursday at the Photoshop World conference, the company gave the first peek at its efforts to do just that.

From a glance at Hewlett-Packard’s (HPQ) new high-end photo printer, the Photosmart A826, you’d swear it was a computer.

Hewlett-Packard’s (HPQ) new “Print 2.0” vision for its most profit-rich business unit is pretty confusing, until you consider this: If HP can get us to make more stuff using its inks, printers and software, HP wins.

Hewlett-Packard (HPQ), the top-selling company in Silicon Valley, today will unveil a new lineup of printers, an ambitious Web-printing strategy, and a $300 million marketing campaign to sell it all.