BlueLight confirmed Mark Goldstein's resignation, which was previously reported by CNET News.com, in a news release Thursday. The company said Goldstein will become a "long-term Internet adviser to Kmart." In the news release, the San Francisco-based company did not say who would take over the CEO post.
Sources said Goldstein, who helped launch BlueLight in December 1999, "stopped overseeing the day-to-day operations awhile ago."
In helping to launch BlueLight, Goldstein was faced with the task of overhauling Kmart's image to appeal to the typically upscale shoppers found on the Web. A discount retailer, Kmart built its brick-and-mortar business by catering to a mass audience.
Under Goldstein's watch, Kmart was among the first large retailers to offer free Internet service. Last year, Kmart began handing out software allowing shoppers to make BlueLight their Internet service provider, a marketing strategy designed to lock customers into spending more time at BlueLight's site.
In March, BlueLight dropped its free, unlimited Internet access service and moved to a fee-based system for its roughly 6 million customers.
Before being named BlueLight CEO, Goldstein worked as the entrepreneur-in-residence at Softbank Venture Capital and before that founded and then sold several companies: Impulse Buy Network, Reality Online and NetAngels.
BlueLight recently said it moved into second place behind Sears.com among the most trafficked of the mass merchandisers.
Predicted to become "category killers," the e-commerce stores of large brick-and-mortar chains were supposed to benefit from the deep pockets, recognizable names and buying power of their parent companies. But the Internet units of big, traditional retailers have not been immune to the ills that have collapsed many e-commerce sectors in the past year.
Other Web offspring that have had a hard time mirroring their offline parent companies' success include Toysrus.com and Barnes&Noble.com.
BlueLight said Wednesday that Troy, Mich.-based Kmart, which owns 60 percent of the Internet service provider, will handle several of BlueLight's operations, and that the changes involved an undisclosed number of layoffs.