Galli, who was most recently president and chief executive officer at Horsham, Pa.-based VerticalNet, has joined old-line consumer products giant Newell Rubbermaid as its new president and chief executive officer, both companies announced Monday.
VerticalNet, an operator of online trading exchanges, said co-founder and chief operating officer Michael Hagan will replace Galli as president and CEO, effective immediately. Galli, also a former executive with Black & Decker, resigned from Amazon last July after spending a little over a year with the e-tailing giant as its chief operating officer and first-ever president.
Galli leaves VerticalNet as the booming market for online trading exchanges has been bogged down by an overall market shakeout and growing skepticism over investing in Internet-related companies.
In research notes, Lehman Brothers analysts clipped their rating on VerticalNet's stock to "outperform" from "buy." Lehman analysts noted that the stock downgrade reflects the negative implications of Galli's departure, the risk that the company may miss its revised fourth-quarter earnings projections and the chance of more bad news in the form of cost-reduction measures.
Lehman analysts said that Galli's departure has negative implications for the company in the near-term, primarily because it's causing turmoil in a company that already faces a series of challenges. Some of VerticalNet's near-term hurdles include the pending acquisition of online financing service SierraCities.com, the difficult market for online advertising and the need to rebuild VerticalNet into a software entity that can compete head-to-head with headline grabbers Ariba and Commerce One.
Hagan will make a better leader for VerticalNet, but it will take time, Lehman analysts added.
VerticalNet recently sold its electronic and computer components exchange, NECX, to technology marketplace Converge. The sale of NECX is part of a plan to help transform the company into a software provider, providing VerticalNet with a more steady revenue stream through software licenses.
Though the projected market for business-to-business online exchanges remains explosive, a number of marketplaces have already gone under. Last September, RedLadder.com, a construction marketplace, shut down because of financial difficulties. Soon afterward, online marketplace services provider Ventro said it planned to shut down its Chemdex and Promedix ventures and lay off about 235 employees.
Galli said he is looking to go back to his roots, which lie in the Old Economy.
"What excites me most about working for Newell Rubbermaid is the opportunity to return to my roots in the durable goods industry, and to apply the skills I've learned in the new economy to an area that I know and love best," Galli said in a statement.
At his new role at Freeport, Ill.-based Newell Rubbermaid, Galli, 42, will oversee worldwide operations and be responsible for increasing growth through new-product development and brand-management initiatives. He also will help lead global expansion efforts in Europe, Asia and Latin America.