While everyone’s paying attention to Microsoft-Nokia and Android-KitKat there was a fairly significant development in Local this morning. ReachLocal founding CEO Zorik Gordon resigned.
It’s quite likely he was asked to resign. Here’s the language in the press release:
ReachLocal, Inc., a leader in local online marketing and commerce solutions for small- and medium-sized businesses (SMBs), today announced that Zorik Gordon has resigned as chief executive officer and as a member of the Company’s board of directors to pursue other entrepreneurial opportunities. David Carlick, Chairman of the Board, has been appointed interim chief executive officer effective immediately. The Board has commenced a search for a new chief executive and will consider both current members of management and outside executives.
“I am extremely proud of the company we have built over the last 10 years. We have grown from a small one room start-up to a global company with more than 20,000 customers and a run-rate of over $500 million in annual revenue,” said Zorik Gordon.
“Speaking for myself and the rest of the ReachLocal Board, I want to extend heartfelt thanks to Zorik, a co-founder of the company, for his dedicated service to ReachLocal. His tireless leadership since 2003 led to the creation of a market-leading publicly traded company that has generated over 100 million leads for customers in 15 countries,” said Mr. Carlick. “ReachLocal will continue to invest in growth and product innovation, and we are confident that the Company remains well-positioned for future growth and success.”
ReachLocal had been growing the top-line and reducing losses but the company was still not profitable. It had just launched a major new consumer-product in ClubLocal and was diversifying its revenues away from pure reliance on SMB marketing products.
It’s possible that Gordon truly wanted to pursue “other entrepreneurial opportunities” However the language of the release suggests his resignation was involuntary. In my last conversation with him I didn’t detect a desire to pursue other opportunities, he seemed upbeat about ClubLocal.
Although the top-line has been growing it must be that all is not well at ReachLocal. Perhaps ClubLocal is perceived as a distraction from the core business or that core business is not going well. Perhaps SMB churn remains high and isn’t improving.
Sometimes founders and CEOs need to step aside to make room for new leadership. That’s possible, but the above has a very abrupt quality suggestive of a problem that needs to be remedied.
What is your sense of the health of the company and its business?