The tumult typified the company?s difficult year, in which core members of its management team left and plans to file an initial public offering were shelved, dimming the prospect of chairman and investor John Sculley?s return to prominence after his ouster from Apple Computer?s CEO post.
All of which leaves industry watchers wondering: Is Live Picture out of focus?
Analysts think it might be. "Their problem is more of an execution problem than a vision problem," said Rob Enderle, vice president with Giga Information Group. "My sense is it's a firm without focus."
Live Picture, which last summer boasted 180 workers, is now down to 120 employees. The company cut less than 40 positions several weeks ago, said Kate Hutchinson, senior director of corporate marketing.
Officially, the company pared its operations to concentrate on its Zoom and LivePix divisions, cutting such areas as its in-house Internet publishing operations as part of restructuring.
In the midst of these changes, CEO Mitchell resigned. Company officials said the move owed to the reorganization and those placed in charge of the divisions. Mitchell joined the company in June last year, with plans to focus on client-server imaging solutions.
Co-founder Mark Kalow is serving as interim CEO.
But Mitchell's departure marked the latest exit among Live Picture's management team. Several months ago, both the vice president of marketing and vice president of worldwide sales resigned, after joining the company shortly after Mitchell's arrival, Hutchinson said.
Meanwhile, Live Picture's chief financial officer, who was brought aboard to help the company go public, has been on a leave of absence to attend to a death in the family.
Last summer, with its regulatory documents drawn up and ready for filing, Live Picture decided to cancel its IPO plans as the markets tanked, forcing the company to find alternative financing. In October, Live Picture raised $10 million in a ?mezzanine round? of financing, but the figure was far short of what the company had hoped to raise by going public, said one company executive.
"We had expected the money from the IPO, but with less money, we had to revise our plans and that lead to the restructuring," said the executive, who requested anonymity. "We had a case of musical chairs where there were too many executives for positions and various projects were dropped."
According to Live Picture treasurer Scott Kleinberg, however, the restructuring and the withdrawn IPO plans were independent of each other, and the mezzanine financing met the company's working capital requirements.
Chairman Sculley said the withdrawn IPO meant Live Picture hit a "bump in the road.
?Live Picture is still as attractive of a company as it was a while ago and we've now got expenses down to where are revenues will be," he observed.
But one former Live Picture employee said the restructuring has come too late in the game.
"When the IPO plans were canceled [last summer], I think the company realized the gravy train was gone and the oxygen was going to run out," said the former employee. "It forced them to focus, but they should have done it a long time ago. If this was a sick patient, they should have cut off its hand six months ago and the patient would be fine now."
That sentiment is shared by another former Live Picture employee.
"The company lacked a clear strategy," said the former executive. "The issue has always been which things to focus on. John [Sculley] would have ten great ideas but he couldn't chose which one to do and instead would try to do them all."
Sculley, who in 1994 made an ill-fated investment in East Coast wireless company Spectrum Technologies after his 1993 departure from Apple, is thought by some industry watchers to be counting on Live Picture to restore his reputation in the tech industry. But Sculley contends he is not involved in the company?s daily operations.
"I'm just an investor and chairman. My role is to help advise them in business development and open doors for them," he said.
"It's the CEO who decides what the company focuses on. I can't do that. I'm busy with 20 companies I'm invested in and I'm also sitting back here in New York."
Hands on or not, analysts have doubts about Live Picture's revamped strategy.
Under the restructuring, the company's Zoom division will sell image servers that allow customers to use standard Web browsers to zoom in and out of high-resolution images, 3D graphics, and 360-degree panoramas without special software or plug-ins. The division also includes Internet and consumer applications based on the Zoom imaging technology.
LivePix, meanwhile, focuses on consumer technology for editing and incorporating images into a range of products from birthday cards to calendars. Its templates are intended for use by home offices and small businesses to manipulate images for letterheads and business cards.
?LivePix has one of the best project solutions for things like collages, and was also the first one to partner with interesting content companies like Warner Bros., but it doesn't have the brand equity and marketing dollars," according to Suzanne Snygg, an industry analyst with Dataquest.
"LivePix doesn't have a strong presence with [manufacturers], and [has] an even weaker presence with retailers. Although I'm optimistic about the market, I'm not optimistic for vendors beyond the top three," she said, placing LivePix outside that group. Among its rivals, Microsoft has brand equity and Management Graphics Incorporated (MGI) is known for its marketing savvy.
The decision to focus on Zoom technology, which allows users to zoom in and out of an image and do edits at different layers of the image, makes more sense, analysts said.
"Their Flashpix is appropriate for the Internet, since there is a problem to be solved," Snygg said. "Users can get a small image on the Internet and zoom in and out of it. I'm optimistic for Flashpix as an image server solution."
Still, the technology is not so useful on the client, or desktop, side. That's because editing requires saving the work at all the different layers of the image, Snygg said.
Sculley argues Live Picture is going after the right markets. "The Zoom business is in its early stages. While most images on the Internet are GIF and JPEG, it's beginning to transfer to high-resolution images managed off of servers," he said.
As for the company?s LivePix business, there?s a large potential for working with partners and manufacturers to distribute licensed content from companies such as Warner Bros., receiving revenue for every template sold.
Whether it?s the right way to go or not, Giga's Enderle said Live Picture faces hurdles in attracting further funding. "This company probably won't survive alone. But the question is if another company will find enough interest in them," Enderle said.