Things are tough all over.
---------------------- Forwarded by Greg Piper/Corp/Enron on 12/10/2000 10:01
From: Keith Couch on 12/10/2000 11:02 AM
To: Hal Elrod/Corp/Enron@Enron, Brandon Wax/HOU/ECT@ECT, Greg
Piper/Corp/Enron@Enron, John Cummings/HOU/ECT@ECT, Jeff Harbert/HOU/ECT@ECT
Subject: paperexchange CEO resigns
PaperExchange CEO steps down
December 08, 2000 01:35 PM PT
by Adam Feuerstein
Kent Dolby, president and CEO of PaperExchange, resigned unexpectedly
Thursday, adding to the mounting turmoil at the independent Net marketplace
for the pulp and paper industry.
Dolby's resignation, for personal reasons, comes a little more than a month
after the company laid off 14 percent of its workforce in a major retooling
of its business plan. Dolby joined PaperExchange -- 83 percent owned by
Internet Capital Group (ICGE) -- in December 1999.
Bob Brenner, PaperExchange's current chief technology officer, is being
promoted to the CEO post. Duane Desisto, currently CFO and chief operating
officer, will become president.
Company executives, including Dolby, were not available to discuss the
management shifts, but the moves were confirmed by a company spokeswoman.
Brenner's ascension may be linked to PaperExchange's decision to focus less
on its online exchange for excess paper products, and concentrate instead on
developing and selling Internet-based business applications for the pulp and
Dolby may also be a victim of the fickleness of the b-to-b sector. When he
joined the company, independent Net markets were the poster children for
successful b-to-b ventures. But in the ensuing months, industry-sponsored
marketplaces -- ventures set up by big industry players -- have risen to the
top, forcing indie Net markets onto the b-to-b endangered list.
PaperExchange faces considerable competiton from ForestExpress, a marketplace
sponsored by industry giants Weyerhaeuser (WY), International Paper (IP),
Georgia-Pacific (GP), Mead (MEA), Boise Cascade and Willamette (WLL).
ForestExpress may or may not grow into a successful b-to-b marketplace, but
its very existence has dominated b-to-b activity in the pulp and paper
industry, and has essentially frozen any progress PaperExchange was making.
The pickle in which PaperExchange finds itself is also being viewed, by some,
as an indictment of Internet Capital Group.
In September, ICG boosted its stake in the company from 20 percent to 83
percent, in exchange for 4.8 million shares of ICG common stock. The deal
came at a time when ForestExpress was showing signs of life and when indie
Net markets in general were falling into disfavor and were being all but
ignored by most venture capitalists.
ICG's fortunes have tumbled lately because many of its b-to-b investments are
not paying off for shareholders. Last month, the company announced plans to
cut costs, reduce its investment spending and refocus efforts on 15
"developed" companies in its portfolio -- companies that have the best
near-term shot at initial public offerings.
PaperExchange was not named as one of those "developed" companies.
An ICG spokeswoman defends the investment in PaperExchange, acknowledging the
company needs to help in developing its business model further -- a role ICG
is uniquely positioned to play.
"We have accumulated a lot of knowledge about b-to-b that has helped us build
some leading b-to-b businesses," said Michelle Strykowski. "Our investment in
PaperExchange is an educated bet based on that proven experience."
Adam Feuerstein covers e-commerce for UpsideToday. Reach him at
firstname.lastname@example.org. If you would like to submit a letter to the editor
regarding this story, email email@example.com