Just days after dodging a proxy
contest from a group of dissident shareholders, New York-based domain
name specialists Register.com is parting ways with chief
executive officer Richard Forman.
Forman, who started the company as Forman Interactive in the early days
of Silicon Alley, will hold on to his board seat but his resignation from the
CEO spot is seen as a major coup for Barington Companies Equity Partners,
L.P., the dissident shareholder group that threatened a proxy contest to
replace the company’s directors and rescind the anti-takeover “shareholder
rights plan.”
Peter Forman, who co-founded the firm with his brother 1n 1994, will
assume the president and CEO position, Register.com announced Monday.
The move comes as no surprise to industry watchers who predicted that
senior management changes would accompany the $120 million cash agreement
with Barington Companies.
Under Forman, Register.com spent the early part of this year rejecting several
buyout offers and sources say the agreement with Barington Companies was a
sign that the balance of power had shifted out of Forman’s hands.
Register.com spokerperson Stephanie Marks denied talk that Forman was dismissed from the CEO position. “Richard has been considering this change for some time. Now that we’ve resolve the issue of the proxy fight, he (Forman) and the executive committee felt this is the appropriate time for hm to resign,” Marks told internetnews.com.
The removal of Forman from the CEO spot adds to the long list of
company executives leaving the number two domain name registrar. Last
October, chief operating officer Rajiv Samant was fired after
less than two years on the job.
The CEO-switch comes as Register.com is struggling to compete with rival
URL registrars offering dirt cheap TLD registrations. While Register.com
charges $35 a year to register a .COM, .NET or .ORG domain, competing firms
like GoDaddy Software hawk registrations for as low as $8.95/year.
With cheaper alternatives widely available, Register.com has seen its
core business — registrations and renewals — flatten in recent times.. At
the end of the first quarter this year, Register.com registered, transferred
and renewed approximately 584,000 domain names, a minor increase over the
520,000 domains handled in the fourth quarter of 2002.
While that represents a quarter-over-quarter improvement, the company is
struggling with TLD renewals (approximately 50 percent rate in the first
quarter of 2003).
Register.com has more than three million domain names under management
and also sells add-on services like hosting and domain name management
services SMBs, large corporations, as well as ISPs and telcos.
