As reported last night by CNET's NEWS.COM, PointCast announced today that it has begun a search for a new CEO and that cofounder and current chief executive Hassett will become chairman of the privately held company. The company made the announcement today in a conference call with reporters.
PointCast executives today hinted that they are looking to the media industry for a replacement for Hassett, a move that would be consistent with their oft-repeated goal of developing less software over time and focusing more on the core information services from which the company derives the majority of its revenues. Executives are also seeking an experienced operational manager who can help PointCast expand its business as it prepares to file for a much-anticipated initial public offering.
According to Andy Rachleff, a general partner at venture capital firm Benchmark Capital and a PointCast board member, it made sense for the company to look for an executive from the media industry since that is the direction the company has clearly headed.
"We're evolving the business model to a more classic media business model. We would benefit by getting somebody from the media industry," he said. "If you look at what America Online has done, they're a pretty good model. Look at what happened to the value of AOL after they hired Pittman and Tartikoff."
Rachleff declined to comment on specific candidates for the job.
Jaleh Bisharat, senior vice president of marketing at PointCast, said that Hassett and PointCast's investors, which include venture capital firms Benchmark Capital and Mohr Davidow Ventures, were all involved in the decision to look for a new executive. A number of major media companies are also investors in PointCast, including Knight-Ridder, Times Mirror, and Gannett International Communications.
"It's not unusual that a company gets to a certain size and then looks to bring in extremely seasoned management to complement what skills are already in place," Bisharat said in an interview.
Indeed, such management changes are far from uncommon in the world of high-tech start-ups. Months after founding Netscape Communications, Jim Clark hired a experienced executive, Jim Barksdale, to take over the role of CEO. Clark remains chairman of Netscape.
PointCast has hired David Beirne, a headhunter formerly with high-tech recruiting firm Ramsey/Beirne, to find a replacement for Hassett. Beirne, who also recruited Barksdale for Netscape, recently joined Benchmark Capital, one of the original investors in PointCast.
Recently, PointCast bolstered its executive ranks by hiring Phil Koen as chief financial officer, a move that was widely seen as a prelude to an IPO. Previously, Hassett had acted as CFO.
While it's unclear how heavily Hassett will participate in the day-to-day operations of the company he founded, company executives and investors said he will still be involved in PointCast's strategic planning.
PointCast is facing increased competition from Netscape, Microsoft, and smaller push firms like Wayfarer Communications, so it will undoubtedly look for a tough executive who can help it stay ahead of the pack. Before founding PointCast, Hassett was manager of research and development at Adobe Systems.
In related news, Knowledge Plus Multimedia Publishing (KPP) sued PointCast and Globe Information Services for up to $280 million over refusing to use KPP as a special media partner.
Under the claim, the multimedia company alleges that Globe Information Services, a division of Thomson Canada, breached its contract to have KPP develop 12 new commercial channels for use on an exclusive basis on the PointCast Canada Network.
But PointCast purportedly refused to use KPP as the "special media partner." That, in turn, allegedly prompted GIS to repudiate the agreement. KPP alleges that GIS and PointCast conspired to exclude KPP from the Canada Network.
PointCast has not been served with a copy of the complaint and will not comment until its lawyers can review the case, said Stephanie Gnibus, a spokeswoman. GIS officials referred calls to KPP.
The plaintiff is seeking reimbursement of lost profits and damages to the tune of $280 million and punitive damages of $10 million.
The channels in question included information on forestry, pulp and paper industries, agriculture, oil and energy, mining and metals, gaming and casinos, and construction. They were designed to provide industry news, information, and related links to Web sites.