Six months after MindSpring merged with EarthLink, the combined company's chariman has resigned. More significant, perhaps, is that the seat is being filled by EarthLink's founder, fresh from founding an Internet incubator that may hold the keys to the future of the No. 2 ISP.
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Whatever Brewer's other interests and new ventures may be, their pursuit will be helped by the sale of his EarthLink holdings, despite the stock currently being some 80% below its all-time high. As part of EarthLink's previously announced stock repurchase plan, the company will buy 2.845 million of Brewer's shares. Sky Dayton, who founded EarthLink in 1994, will become the company's chairman, a position he held until the MindSpring merger.
As founder, chairman, and CEO of MindSpring, Brewer guided the company's growth through a series of acquisitions, while building its reputation for quality service and strong customer support. Few services are more important than connectivity when it comes to making the Internet run.
What makes the Internet access business increasingly difficult, however, is the need to make one provider of an essentially commodity service stand out from another, a task made more difficult by EarthLink's roots in the world of low-speed access as the demand for high-speed access races ahead.
A family connection
By itself, Charles Brewer's resignation may not mean much; high-level, post-merger resignations aren't unusual. More significant -- potentially, at least -- is Sky Dayton's return to the chairman's seat.
Dayton is retaking the EarthLink chairman's seat some 14 months after founding Internet incubator eCompanies in June 1999 with former Walt Disney (NYSE: DIS) executive Jake Winebaum. As chairman of Walt Disney's Buena Vista Internet Group -- the umbrella over Disney's Internet properties -- Winebaum had a hand in building Disney.com, ABCNews.com, ESPN.com, and Go.com, a company he helped create through his role in Disney's acquisition of InfoSeek. Both EarthLink and Disney were founding investors in eCompanies.
According to Wednesday's announcement, the 29-year-old Dayton will continue his "day job" at eCompanies, raising questions of if and how Dayton's two jobs might converge. As an incubator for developing and investing in Internet start-ups, eCompanies is a magnet for the dreams and schemes of Internet entrepreneurs. And it is just such new ventures, with presumably novel or at least superior approaches to end-user services, that in combination with EarthLink's Internet access and good reputation could help differentiate the ISP's utility-like connectivity service. Dayton is known for his creativity and may well find synergies between his two corporate offspring.
The return of EarthLink's founder from his latest venture -- at a time when his first baby is under duress and its stock can't get no respect -- echoes the return of Steve Jobs as Apple's (Nasdaq: AAPL) "interim CEO" several years ago. It remains to be seen whether Dayton's renewed involvement with the company -- albeit only as chairman, rather than in a more hands-on position -- will have the same influence and weave the same magic on EarthLink.
Your Turn:
Does the resignation of EarthLink's chairman matter? Does the return of the company's founder, and the family connection to his Internet incubator, hold promise for a renewed strategic direction for the No. 2 ISP? Share your thoughts on the EarthLink discussion board.
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