In his fireside chat with Wall Street, IBM chief Lou Gerstner said there were few things deemed unthinkable at Big Blue. Perhaps it's time to think about exiting the PC business. The idea isn't revolutionary, and it isn't simple. Exiting the PC business would be heresy to a lot of folks that still refer to PCs as "IBM compatibles." On the other hand, IBM's PC business is quite a drag. Just minutes into Gerstner's talk Tuesday, he noticed an analyst using a Dell laptop. That's not a good sign. "We will do what it takes," said Gerstner, referring to the company's PC business. "We won't allow it to be a continuing drag on the business." The only real question is how long will IBM be patient with the PC business. Gerstner didn't detail the extent of losses on the PC business, but it's clearly in the red. IBM's PC business has been a disappointing for several quarters. The PC business certainly isn't "one of those glorious high cash flow businesses," said Gerstner. And it's not like IBM hasn't been trying to fix its PC business. The company exited the retail consumer PC business in the US. But you can still buy Aptivas direct at IBM.com. Meanwhile, Gerstner is "still troubled by the commercial desktop business." Simply put, if it isn't a ThinkPad, folks aren't buying. In the first quarter, IBM's hardware revenue fell 11 percent, mostly because of flagging PC sales. Gerstner acknowledged that "there is a lot to do and a lot more to prove" when it comes to the PC business. The CEO even said the company hasn't proven to itself that it can make money selling commercial PCs. So why do it? IBM can't exit the PC business right now, because PCs still play a role in Big Blue's one-stop information technology goal. IBM provides the services, the servers and the middleware. Exiting the PC business could leave IBM with a hole in its lineup -- even if it's just a gap of perception. At some point, IBM will face a big decision. The company is restructuring the PC business, but it's not clear Big Blue will turn it around. Gerstner may be in denial, even though he acknowledged that the PC business financials aren't pretty. He pointed out that IBM's PC losses may not be as bad as they appear. Gerstner noted that "outside the box" revenue falls into other areas for IBM. Add-on revenue streams could fall under services on IBM's revenue breakdown. PC financing revenue is lumped in with Big Blue's financing category. It's a fair point. Every PC vendor relies on "outside the box" revenue. Gateway gloats over non-PC revenue. Dell sells storage systems and peddles software on its site. Compaq and Apple also have extra non-PC revenue. Part of the problem is IBM's PC cost structure -- and it's not clear what the company can do. The company can't simply shut down the indirect channel, especially since 70 percent PC sales derive from indirect channels. "It's enormously complicated," he said. "You can't just throw out the indirect channel when you depend on it for sales." IBM said it is trying to revamp the sales network, but that doesn't mean it will work. Compaq hasn't succeeded at going direct and neither have other PC vendors. Dell and Gateway have been successful PC vendors only because they started out direct -- there wasn't any baggage to eliminate. Gerstner said he won't allow the PC business to drag down financial results. How long can Gerstner hold out? IBM reiterated that it would post high single-digit revenue growth and double-digit earnings growth for the company. "It's not in our model," said Gerstner. "It's not necessary to us." Big Blue is boring, but consistent. Despite allowing EMC and Sun Microsystems push it around, IBM can take a punch. It restructured, was hit by a Y2K lockdown and still managed to meet its targets. That focus could pay off as dot-coms and other one-time Wall Street wonders crash and burn. In today's market, IBM looks downright contrarian. On acquisitions, Gerstner said IBM won't shy away from big purchases, but isn't going to pay nosebleed valuations for earnings-impaired startups. "I don't see the need to chase big acquisitions," he said. "We'll only do it if it makes sense for shareholders." Gerstner even mocked all the pro forma earnings talk that inevitably accompanies acquisition announcements. You could call it the earnings minus all the bad stuff approach. The IBM chief also shot down companies' silly love affair with "tracking stocks." He said IBM has no interest in tracking stocks. "You either have a business or you don't," he said. "We'll find ways to monetise for shareholders." Gerstner said the sale of its global networking business to AT&T is an example of monetising a division without doing a tracking stock. And finally earnings and cash will matter even more. "There will be more and more appreciation for companies that drive cash flow and build an earnings track record," he said. Amen, Mr. Gerstner. Amen. What do you think? Tell the Mailroom. And read what others have said. See ZDII for US tech investor news. See techTrader for more technology investment news, plus quotes and research.