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Brain drain strikes Sun-Netscape Alliance

A brain drain strikes iPlanet, the Sun-Netscape alliance that was formed after AOL's 1998 acquisition of Netscape, according to skinformants at prominent start-ups and inside AOL as well.

Like any leader of a Silicon Valley enterprise, I am periodically faced with the unhappy task of putting down a revolt.

Last night, my 12-year-old son Vermel, his classmates Ammonia Blossom and Jai Pegue, and my indefatigable but not, it turns out, terribly loyal secretary and personal assistant, Trixie Pixel, handed in their resignations en masse.

"Our earnings and our earning potential have diverged markedly in the past several quarters," my son said, speaking for the group. He went on to say that I could, and I quote, "take this job and shove it."

Hard words to hear from one's own flesh and blood, but nothing, I thought, that a hike in the tyke's allowance couldn't smooth over. America Online should have my problems!

Turns out that AOL engineering resumés are flying around the Valley. The curriculum vitaes clogging T1s up and down Highways 101 and 280 belong to the Netscape geeks AOL turned over to iPlanet, the name of the Sun-Netscape Alliance that was formed after AOL's 1998 acquisition of Netscape. Or so we hear from skinformants at prominent start-ups and inside AOL, as well.

"About 30 engineers resigned over the past few weeks," estimates one of our well-placed skinsiders.

One iPlanet engineer reported: "One e-commerce team has gone from about 50 employees to less than five in the last month." He described the workplace as a sinking ship.

"We knew there was going to be some turnover because of the stock options vesting in April, but then it became like the Titanic," he said. "It took on too much water. Then it was like people started to panic."

Some employees also fear that AOL will prohibit transfers from iPlanet to AOL proper to help stem the bleeding.

"There are so many rumors flying around, partly because there's so much squabbling between AOL and Sun at the VP and higher level," said the Rumor Mill's Geek Throat, who is not long for this iPlanet. "But no one can quite figure out what's going on. It's like the stock market. Everyone's thinking how they can cover their ass and get out of there. Now even the Sun people are looking for other jobs. They don't want to get saddled with what's left after the rest of us leave."

iPlanet representatives say the turnover rate is on par with the rest of the Valley (meaning it's bleeding profusely?), but they would not talk numbers with us.

"On an annualized basis our attrition rates are normal for the Valley," said one. "We had an awesome quarter, and people are getting really energized by all the recent successes. That's getting people pumped up, and hopefully that will help with the attrition rates."

Why the hurry to scurry? It's no secret that the alliance had a rough first year. But iPlanet insists it has turned the corner this year, boasting that it has 70 percent of the LDAP directory market, that 60 percent of Fortune 100 customers are using the iPlanet Web Server, and that the new year has brought a slew of product releases.

But in addition to corporate culture clash, AOL endured a heavy vesting schedule this month, turning a ton of formerly illiquid pieces of paper into real (however devalued) stock options.

Another incentive to am-scray from un-Say is that iPlanet employees in product management, marketing and engineering are being moved from Netscape's campus in Mountain View to Sun's Santa Clara offices. Bummer, dude! Add to the above the tight-as-a-drum engineering labor market, and you have all of the ingredients for a bad case of brain drain.

Speaking of brain drain, has anyone seen CFO Thomas A. Vanderslice Jr.? We certainly can't find him, and we've looked everywhere, starting with Forbes Digital Media's online masthead. Last week his name was listed among other top executives, but this week it's gone.

First we tried calling Vanderslice, figuring he stood a high probability of being able to apprise us of his whereabouts. No luck. Last week, there was no message on his voice mail, but a friendly operator eventually picked up the line and said he was out of the office, that she didn't know when he was coming back, and that his mailbox was full.

"What kind of chief financial officer wouldn't be checking his messages?" Trixie mused as we puzzled through the evidence.

Having given up on speaking to the man himself, we resorted to PR, where a Forbes flack said the company did not "comment on personnel issues." As if I'd asked anything really personal...

Speaking of no comments, that's just what we got from the foundering music e-tailer CDNow when we asked representatives about the rumor that the company was on the verge of being acquired. Our sources wouldn't say who's buying but did offer that Viacom, MTVi, Time Warner and Sony are not bidding.

Send me your rumors and I'll do your bidding every week--if I can keep my staff from bolting.