NBCi president, other execs leaving portal company

As previously reported by CNET News.com, Sanctis had been expected to resign. He has not accepted any offers from other companies, according to sources, and his position will not be filled.

Late Friday, NBCi chief executive William Lansing also confirmed an earlier News.com report that three additional top executives have also resigned: executive vice president of sales and marketing John McMenamin, senior vice president of sales Greg Regis, and vice president of marketing Stacy O'Connell.

NBCi also is expected to lay off additional employees, Lansing said without providing specific numbers. "We told analysts that we wanted to get down to around 600 people by the end of the year and we're in that general range."

At its peak last summer, the company employed 950 people.

The layoffs mark an expansion beyond the company's August announcement of a 20 percent staff cut by the end of the year. At that time, the company employed around 800 people.

"I've enjoyed working with (Lansing) these past seven months and, as we've streamlined the company together, it has become evident there is overlap between our two positions. So, I have elected to leave NBCi to pursue new opportunities," Sanctis said in a statement.

Management changes, cost cutting and strategy shifts have become increasingly common among Web portals as they struggle to achieve profitability amid fierce competition. NBCi, for example, is battling with giants such as America Online, MSN and Yahoo.

Media companies in particular have encountered a mine field when venturing onto the Web. Walt Disney's Go.com recently launched a new version of its site to focus on entertainment and leisure, and AltaVista has retreated to a search focus.

In an interview before the announcement of Sanctis' resignation, Lansing said NBCi is undergoing a "top-to-bottom" restructuring effort. Among the options: cutting marginal businesses, considering outsourcing of some of its departments, possible layoffs as part of its previously announced 20 percent work force cut, and changes to its operating structure.

NBCi, which reports quarterly earnings next week, is looking to remove lines of business that won't contribute to profitability in the next year to 18 months, as well as at redundancies in its operations following the merger of Xoom.com and Snap, Lansing said. For example, the company has multiple email platforms and is moving to a single platform.

Although analysts expect the company to become profitable in mid-2002, NBCi is hoping to accelerate that schedule, Lansing added.

Six months ago, the company restructured its operations from business units to functional groups, such as a sales group and business development group.

Meanwhile, sources said Sanctis, 37, decided to resign mainly because his stock options are worthless and he has received a number of job offers over the years. Sanctis received an options grant last year of 500,000 shares with a strike price of $52.50, according to the company's June proxy. The stock now trades around $5.

Sanctis, who has served as president since November 1999, was one of the original NBC executives to spearhead the network's Internet ambitions.

However, other sources said Sanctis and the other executives are being forced out as part of the cost-cutting drive. The executive cuts will also give Lansing more control over operations.

"He will build a different sales force, but not at those levels," one source said, referring to Lansing. "He's a very hands-on manager."

Sanctis joined NBC in 1993 and held various management positions over a three-year period, including general manager of NBC Digital productions. In 1996 he served as senior vice president and general manager of NBC Multimedia, a wholly owned subsidiary that oversaw the network's Internet and new-technology operations.

Sanctis then was tapped as chief operating officer of Snap a month after NBC acquired a stake in the Web portal in 1998. Snap was created by CNET Networks, publisher of News.com.

A year later, NBC raised its Internet profile by acquiring a stake in Xoom, a home page publishing site. The company soon combined Xoom with Snap to form NBCi, which went public in November 1999. Sanctis was given the additional title of NBCi president that year.

Although NBCi's stock price reached as high as $106 a share, its stock has taken a beating since April, when Internet companies began falling out of favor with investors. In June, the company warned that its losses in the second quarter and the year would exceed expectations because of falling advertising revenue.

The prognosis took a turn for the worse in August when the company unveiled plans to cut about 20 percent of its work force by the end of the year.

Sanctis' departure tops a list of several high-level resignations. Chris Kitze, former chief executive, resigned in March to take a vice chairman role. Kitze is no longer a board member and was succeeded as CEO by Lansing, a General Electric veteran who was CEO of Fingerhut before joining NBCi.

John Harbottle, former chief financial officer, resigned in May to accept another job in Arizona. Anthony Altig formally took over as chief financial officer last month.

CNET Networks, publisher of News.com, has a stake in NBCi.