3Com Seeks New Exec To Run Daily Operations
San Francisco Chronicle - Wednesday, June 3, 1998
3Com Corp., the Santa Clara computer networking company, said it is
recruiting a new senior executive to help manage day-to-day operations.
The company has interviewed a handful of candidates since it began the
search in late April. Depending on his or her qualifications, the person
3Com hires could become chief operating officer or president, under
Eric Benhamou, 3Com's current president, chief executive and chairman.
Benhamou is said to be seeking more time to focus on strategic issues
while off-loading some of his daily responsibilities. His job has
grown far more complex since 3Com acquired U.S. Robotics last year,
roughly doubling the company's size and giving it a huge new stake in
the consumer market.
In addition, 3Com has been buffeted by severe price competition in
many of its product lines and by slower than expected demand for its
latest generation of 56K modems.
The company's slumping profits contributed to a collapse of its share
price, from nearly $35 in early May to a close of $24 yesterday.
Martin Pyykkonen, an analyst with CIBC Oppenheimer, said 3Com has
failed to make up in volume for drastic price cuts on modems and
network interface cards, which let computers plug into company networks.
The price of such cards has fallen by half over the past year, he said.
3Com has also failed to gain significant market share for higher-end
corporate networking equipment, which enjoys higher margins,
Pyykkonen said.
The challenge for a new chief operating officer, Pyykkonen said, will
be to help 3Com improve its manufacturing efficiencies and retail
distribution of mass production items like modems. The new hire will
also have to find ways to drive new product development without raising
expenses and squeezing profits.
c1998 San Francisco Chronicle
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