Espuelas Out as StarMedia CEO

StarMedia Network Inc. , the Web portal targeting Spanish and Portuguese speakers, on Tuesday announced the departure of CEO and founder Fernando Espuelas.

Espuelas, the Uruguay-born entrepreneur who became one of the poster boys for the ‘Net boom in the late 1990s, will retain his role as StarMedia chairman but the day-to-day operations have been turned over to current president Enrique Narciso.

No reasons were given for Espuelas’ sudden departure, which comes at a time when the New York-based firm is struggling to cope with the tough advertising environment.

StarMedia, which saw its stock price dip below $1.00 in recent days, depends almost entirely on advertising revenue. In its second quarter earnings, the company said pro
forma losses narrowed to $30.6 million (41 cents per share), down from last year’s loss of $41.5 million, or 63 cents per share.

While the company’s second quarter loss narrowed more than expected, StarMedia’s revenues were somewhat flat, increasing by a mere 3 percent to $14.2 million. In the same year-ago quarter, the company raked in $13.8 million. The company was expecting revenues to come in between $14 million and $16 million.

StarMedia said improvements in its cost structure (which included layoffs earlier this year) helped reduce the net loss.

The company said it had 23.2 million unique users worldwide during the month of June 2001 from its, LatinRed, and Cade brands. This was down 34 percent from the 35.2 million users reported during the quarter ended March 31, 2001. It said this was a result of previously announced efforts to reduce costs associated with Network applications that have proved difficult to monetize.

In his last statement as StarMedia boss, Espuelas hinted at seeking “new challenges and new vistas.”

The company’s new CEO, Enrique Narciso, has been serving as president since June 1, this year. A native of Venezuela in South America, he previously served as general manager StarMedia Mobile, the company’s wireless arm.

Before StarMedia, Narciso served as managing director for Latin America of Alpha Investments, a hedge fund based in New York.

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