June 26, 2007 9:46 AM PDT
EarthLink gets a new CEO
Rolla Huff, 50, succeeds former CEO Garry Betty, who died in January from complications with cancer. Betty was 49. Michael Lunsford has been interim CEO, and he will continue to serve on the company's executive team, Earthlink officials said.
Huff takes the top job at EarthLink as the company comes under pressure in its municipal Wi-Fi business and for its huge investment in mobile virtual network operator Helio.
EarthLink said in April that it would cut spending for expanding municipal Wi-Fi and instead refocus its strategy to build out networks in cities where it already has contracts. The ISP has won Wi-Fi contracts in 13 cities, including San Francisco, Philadelphia and Anaheim, Calif. Executives said the company would consider taking on new contracts only in larger cities such as Chicago or Los Angeles, where, presumably, the chances of turning a profit are higher.
EarthLink's decision to scale back expansion of its muni Wi-Fi projects came just as the company announced a loss of about $30 million, mostly from costs associated with its investment in the cell phone company Helio.
EarthLink jointly owns Helio with SK Telecom of South Korea. Each company has already committed to invest $220 million in the company. And EarthLink said it might spend another $50 million on the joint venture.
Huff, who has been known to cut loose unprofitable businesses, could be just what EarthLink needs as it tries to control costs and expand its business.
"Rolla is a proven leader who has delivered results for customers, employees and shareholders over two decades," Sky Dayton, founder of EarthLink and CEO of Helio, said in a statement. "I think he is the perfect CEO to have at the helm during this very important time in EarthLink's history."
From 1999 to 2006, Huff served as the chairman and chief executive of Mpower Communications, which offers voice and data services to business and consumer markets. He also served as president and chief operating officer, and earlier as chief financial officer, of Frontier, until its acquisition in 1999 by Qwest Communications International. Huff has also worked for a number of other communications companies and at one point served as chief financial officer of AT&T Wireless.
Huff also said he has purchased 100,000 shares of EarthLink stock at a cost of roughly $750,000 to show his confidence in and support of the company.
"EarthLink is one of the Internet's great brands, with millions of loyal subscribers, more than a billion dollars in annual customer revenue, a core business that generates substantial free cash flow, a strong balance sheet, and a great team of people dedicated to superior customer service," he said in a statement. "I believe EarthLink has the elements to create substantial shareholder value."
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