AdReady, the Seattle online advertising startup, has eliminated three of its top executives and laid off other high-level staffers as it makes a bid to become profitable.
Stepping down are CEO Karl Siebrecht; Senior Vice President of Sales, Service and Marketing Randy Wootton; and Senior Vice President of Product and Business Development Matt Carr. Carr and Wootton, both of whom worked in ad exec roles at Microsoft, joined the company 16 months ago.
Siebrecht, the former aQuantive executive, took over the CEO role in 2009 from co-founder Aaron Finn. He remains the CEO for now during a transitional period as the job gets handed to Aaron Averbuch, AdReady’s former vice president of technology. Siebrecht will remain on the board.
Why all of the changes?
Madrona Venture Group’s Greg Gottesman, an AdReady board member, tells GeekWire that the cutbacks were made in order to position the company for profitability.
“It was time to get the company to start generating cash, versus burning cash,” said Gottesman. “The idea was to focus the company, and Karl felt that Aaron was ready to assume this role and we thought the fit was a good one.”
He added that AdReady will be able to operate from a position of strength as a profitable company, something that’s especially important in the online advertising arena. With the changes, Gottesman said that AdReady will become “nicely” cash-flow positive on an operating basis.
The news follows a layoff at the company in February in which about 10 people lost their jobs. At the time of that reduction, AdReady employed about 40 people. It now has about 22 staffers.
“The business continues to grow, and we want to make sure that we are a profitable, growing business,” Siebrecht said at the time.
AdReady has raised about $17 million from Madrona Venture Group, Bain Capital and Khosla Ventures.
We’ve speculated in the past that AdReady could be a possible buyout target, and sometimes pruning such as this could make it attractive to potential acquirers. Gottesman conceded that a profitable company is certainly more enticing to suitors.
“There’s no question that acquirers are more interested in profitable companies, then ones that are burning cash,” he said “Other than if you are Instagram, that goes pretty much across the board. But that wasn’t the rationale for this.”
