Well PointCast has found their CEO and he is a good one. Look for the Pointcast IPO to get to the gates quick and come out swinging. This is the second of the two of my personal "Best of 97 IPO's," the other is Realnetworks.
PointCast Lures SBC Official
As Its Latest Chief Executive
By DAVID BANK
Staff Reporter of THE WALL STREET JOURNAL
PointCast Inc. named David W. Dorman, executive vice president of SBC
Communications Corp., as president and chief executive officer. The move makes it the latest in a wave of Silicon Valley start-ups to lure a high-profile corporate leader with the promise of riches when the company goes public.
Mr. Dorman, a veteran of Sprint Corp., headed the Pacific Bell unit of
Pacific Telesis Group before SBC acquired the Baby Bell last year. He said he was attracted by the opportunity to leave the regulated world of telecommunications for the entrepreneurial challenge of the Internet.
PointCast, a closely held Sunnyvale, Calif., company founded in 1992, is a pioneer in so-called "push" broadcasting of news and information over the Internet.
The company claims 1.2 million regular users of its information services, which include general news as well as channels for special interests and industries. In March, negotiations broke down between PointCast and News Corp., which had offered as much as $450 million for the company, according to people familiar with the talks. Chris Hassett, PointCast's founder, stepped aside as chief executive in June but remains chairman.
The 43-year-old Mr. Dorman, who earned $1.3 million in salary and bonus in 1996, didn't disclose the terms of PointCast's offer but said it included significant equity in the company. "I gave up a very handsome cash compensation package and left lots of stock options on the table," he said. "This will not be a good deal for me unless we make this a successful company, meaning we do an initial public offering and create durable revenue streams and growth."
Mr. Dorman was recruited by David Beirne, a well-known corporate
headhunter who recently became a partner at Benchmark Capital in Menlo
Park, Calif., a venture-capital firm that holds a 24% stake in PointCast. Mr.Beirne has hired several other executives from big companies to start-ups, including former McCaw Communications Corp. head James Barksdale as chief executive of Netscape Communications Corp. and former AT&T Corp. president Alex Mandl as head of telecommunications start-up Teligent Corp.
"This is every bit as big" as those placements, Mr. Beirne said. "There are very few people who have managed multibillion-dollar businesses and also startups. [Mr. Dorman] has the ability to go toe-to-toe with Barksdale and [Bill] Gates and all the others."
Mr. Dorman, who started his career as a software programmer, was an
early employee of what became Sprint. In 13 years, he rose to become
president of Sprint Business, one of the long-distance carrier's largest business units. He joined Pacific Bell as president and CEO in 1994 and was considered a likely heir to Pacific Telesis Chief Phil Quigley. After the acquisition by SBC, he was given responsibility for SBC's Internet and long-distance businesses. But SBC's culture favors longtime company insiders, and analysts said Mr. Dorman was unlikely ever to gain the top spot.
Mr. Dorman said he also was contacted as a candidate for the
chief-executive position at Apple Computer Inc. He said Apple was
offering only stock in the computer maker, without a signing bonus or
severance package. In addition, he said he was dissuaded by the presence of Steve Jobs, Apple's founder, who has returned as the company's interim CEO. "I don't think it would be a very healthy environment to have the founder be there," Mr. Dorman said. Apple couldn't be reached for comment.
At PointCast, Mr. Hassett has retreated to a limited role on the board,according to PointCast executives. "It's not a co-CEO situation," Mr. Dorman said.
At PointCast, Mr. Dorman faces major challenges to distinguish the
company from a raft of competitors seeking a share of the small but growing advertising revenues on the Internet. In addition, push technology, through which users can subscribe to a personal menu of information, has become a standard part of new Web browsers from both Netscape and Microsoft Corp. PointCast, which is featured on Microsoft's new browser, is seeking to distinguish itself by offering information tailored to specific industries, such as health care and finance, and by offering advertisers detailed reports and television-style 30-second spots.
PointCast also has faced a backlash from some corporate network
administrators, who found that the flood of information was clogging their systems. The company responded by distributing a "proxy server" that companies can use to reduce the overload and by offering corporate customers the ability to create internal channels to distribute information to their employees.
"I think the Internet is the most important new medium to be created in our lifetime," Mr. Dorman said. "And I believe PointCast has the potential to be one of the most important services available on the Internet."
PointCast hasn't disclosed its financial results, but Kevin Harvey, a board member and partner at Benchmark Capital, said revenue has tripled since the beginning of the year. He said he is confident that the company can complete an initial stock offering with higher market capitalization than News Corp.'s reported offer of $450 million. |
