Internet advertising firm Zulu-Tek, having just bid adieu to two senior officials of its Softbank Interactive Marketing unit, announced today the appointment of a new president and chief operating officer.
Perhaps as a prelude to a rumored merger with Enhanced Services - a Houston company whose subsidiaries include laptop repair and multimedia development firms - Zulu-Tek announced that Kevin Rogers would assume the role of president and chief operating officer. Rogers was formerly president and COO of the LapTop Solutions division of Enhanced Services.
The current chairman and CEO of Zulu-Tek, former auto industry executive Ronald Meatchem, has returned to his native Australia and is no longer involved in the company's day-to-day operations, according to sources. Some Zulu-Tek investors have been told, prior to any public announcement by the company, that Enhanced Services CEO Steve Lair will be taking Meatchem's place as head of a combined Zulu-Tek/Enhanced Services operation.
Neither Lair nor Rogers, or any Zulu-Tek representative returned phone calls today.
The latest developments follow on the heels of last Friday's resignations of the two top executives at Zulu-Tek's Softbank Interactive Marketing subsidiary, Chief Financial Officer Lawrence Howorth and Vice President of Development Ted West. Both men cited personal reasons for leaving.
"It�s voluntary," said West. "We�ve been presented with a lot of opportunities."
Both Howorth and West joined Softbank at its inception in June 1996, and had been running the company since the departure of chairman and founder Andy Batkin and CEO Caroline Vanderlip, who left shortly after the company was sold to Zulu-tek.
Zulu-Tek is a Newport, Rhode Island, company that got into Net advertising last year with its acquisition of a small interactive ad technology called echoMedia. Since purchasing Softbank Interactive on New Year's Eve from its parent Softbank Holdings - the US arm of the Japanese conglomerate Softbank - it has issued several press releases comparing itself to the category leader and initial-public-offering success story, DoubleClick.
But while Zulu-Tek focuses attention on its good partners in the industry, the stature of Softbank Interactive, which accounted for the majority of Zulu-Tek's $39 million in revenue last year, has withered. The Chicago office of Softbank Interactive Marketing closed in February following the resignation of its last eight employees. The phone at Softbank Interactive's Dallas office has also been disconnected. Softbank Interactive�s European offices closed earlier this month, after all of its employees resigned to form a new ad sales company.
At the company's Boston office, manager Ronna Sadow described the atmosphere as "business as usual," before adding, "[West and Howorth] were our only contacts at SIM, so now we really have no one to get information from."
Told about Sadow's comment, West responded, "[Zulu-Tek's] gonna have to take a lot of quick action."
West, who was cleaning out his desk at Softbank Interactive's San Francisco office on Monday, gave few reasons for his own departure, but said that he had stayed on after the company was acquired by Zulu-Tek in part to represent shareholders who own the 35 percent of Softbank Interactive not held by Zulu-Tek.
"SIM still has minority shareholders who are every bit as important as Zulu-Tek," West said. Howorth could not be reached for comment.
West also confirmed reports that Steve Lair, a Silicon Valley executive formerly with Acer America Corp., Texas Instruments, Toshiba America Information Systems, Inc., and Dataquest, would be "stepping in as CEO of Zulu-Tek and SIM."
Lair�s arrival on the scene was presaged by a press release last week about a significant investment in Zulu-Tek by Houston-based Enhanced Services Co., which owns the LapTop Solutions computer repair firm and NB Digital Solutions, a multimedia development company. The announcement named Lair as "new Group CEO," although it did not specify what group he would preside over. According to West, Lair has been meeting with employees of Zulu-Tek and Softbank Interactive over the past few days. Lair could not be reached for comment.
While the 9 March release offered no specifics on how or when Zulu-Tek and Enhanced Services might come together, some Zulu-Tek investors are under the impression that Lair is already running the combined company. According to a number of readers of the Silicon Investor bulletin board, that notion was confirmed via email from Tom Burgess, president of echoMedia.
"Burgess has said that Lair will run a combined company," said Jeffrey Smurlick, an investment advisor in Toronto who has been following Zulu-Tek's stock on the over-the-counter market since last summer and who remains bullish on its prospects.
No official announcements of either a merger or Lair's appointment have been made, though Burgess said on Monday that "Lair is running the group as we bring [the two companies] together." Speaking from a plane headed to California, Burgess said "there's definitely that potential," of a Zulu-Tek-Enhanced Services merger.
Lair had no affiliation with Enhanced Services prior to his appointment as the company's CEO on 9 March - the day the Zulu-Tek investment was announced, according to David Lilja, an associate at Creative Business Strategies, which handles some public relations duties for Enhanced Services. "I think we'll see a series of announcements that will clarify all this and make it more black and white," Lilja said.
Meanwhile, Meatchem, named as interim CEO of Zulu-Tek last year, returned to Australia over a month ago, according to sources. Calls to him at Zulu-Tek�s Newport offices were not returned. Calls to other Zulu-Tek representatives, including investor relations contact Julie Hooks, outside public relations representative Bob Maples, and attorney John Miller also went unanswered.
And while Zulu-Tek denies that Australian financier Pattinson Hayton, who has a long history of legal entanglements, is running the company, sources say Hayton met with Softbank Interactive employees at Internet World last week in Los Angeles to discuss strategy.
