Online women’s network iVillage should install a revolving door at its New York headquarters — if it has not done so already — to make it easier for top management to exit.
Over the past several days, chief operating officer Allison Abraham departed the company to become president of e-mail marketer Lifeminders.com, Inc., and chief financial officer Craig Monaghan left to become finance chief of auto retailer AutoNation, Inc.
Personnel problems are nothing new for iVillage, which has watched its stock plummet from a high of $113.75 (US$) to Wednesday’s close of $10.69. In January, three former executives filed separate lawsuits against iVillage alleging that the firm lured them from established companies with promises of lucrative compensation packages that never materialized.
All three, who were fired after short stints with the company, settled the suit in March under undisclosed terms.
iVillage CEO Candice Carpenter downplayed the loss of her company’s CFO.
“We’ve understood that Craig would want to return to his roots, which is with Fortune 500 companies,” Carpenter told the Wall Street Journal. “We’ve had the benefit of Craig’s big company experience. That will be lasting, but the timing is bizarre.”
One can only speculate as to what Carpenter means by “bizarre” timing, but many executives consider now to be the perfect time to flee the dot-com land of make-believe and return to a corporate culture where they can plant both feet firmly on the ground.
After all, even though iVillage’s first quarter performance beat expectations — a loss of $25.2 million, or 85 cents a share, compared with a loss of $17.6 million or 96 cents a share a year ago — the company is still losing a great deal of money.
In fact, the Internet is littered with teetering companies that once seemed unassailable. With the likes of CDNow, Peapod, and Drkoop.com begging for cash infusions — and some of the wunderkinder paying the price for early excesses — why shouldn’t top executives retreat to the relative safety of brick-and-mortar companies or privately held dot-coms?
In my mind, the exodus of top management from many dot-coms represents a positive shift away from the freewheeling corporate culture of the digital age and a return to old economy values.
While it sounds absurd, it looks like “showing a profit” is a concept that is coming back into vogue.
Still, beyond simple dollars and cents, dot-com companies have cultivated a reputation for being diffuse, unreliable and unpredictable — to the point that many top New York advertising agencies refuse to take them on as clients. Paper wealth, arrogance and inexperience make for a lethal combination in the business world.
So, perhaps dot-com executives should look inward if they want to understand why so many high-end managers depart after such short tenures. Their “bizarre” behavior does not seem so strange against the surrealistic landscape they are leaving behind.