Verity seeks answers
CEO is ousted as company continues its intranet push
By Jim Kerstetter, PC Week Online
Verity Inc. carries one of the best-known names for intranet search technology, boasts licensees across the industry and has a brand-new product on the market.
So why can't the Sunnyvale, Calif., market leader turn a profit?
Verity board members were asking exactly that earlier this month when they forced the immediate resignation of Philippe Courtot, their high-profile president and CEO for the past five years, and replaced him with Gary Sbona, formerly an executive with Regent Pacific Management. Courtot will continue, at least temporarily,
as the company's chairman.
To many industry observers, the less-than-amicable divorce was a shock, despite the company's poor financial numbers. Courtot, in an interview with PC Week last week, was reluctant to discuss details of his departure. But he indicated that he was equally surprised with the ouster.
"There were things that should not have happened," Courtot said.
A Verity spokeswoman said the company was pleased with its technology direction and the recent launch of the IntelliServ intranet search engine. But Verity has not turned a profit since 1995, and the board wanted a "stronger operations person" at the helm.
Verity's financial results for the fiscal year ended May 31 would seem to back those concerns. Total revenues were $42.7 million, up 39 percent from the year before.But the net loss for the year, due to several acquisitions--including Cognisoft Corp., 64K Inc. and the Keyview technology from FTP Software Inc.--was $17.9 million, a huge fall from the $313,000 loss of fiscal 1996.
Still, Courtot believes Verity management pushed the panic button too early, since Verity, like many of its search competitors, has taken longer than expected to adapt to the intranet boom.
"If you look at our competition, the entire marketplace is not growing that fast," he said. "I think the market has slowed down a bit for the intranet."
Courtot said he expects to get "back into the race" as quickly as possible, likely in a scenario that would return him to what he still sees as the emerging market for search technology.
No company--including competitors such as Lycos Inc. and Infoseek Corp., which are retooling their business plans to compete for the intranet--is going to have an easy time convincing corporate America of its worth, he said.
"It's a huge challenge for them to be in that space," Courtot said, noting that vendors have to demonstrate real expertise for corporate applications. "You don't go into the enterprise that easily." |
