Marchex today announced major leadership changes, as both CEO Pete Christothoulou and Board Chairman Clark Kokich have resigned from the company.
The Seattle-area advertising analytics company is now led by an “interim office of the CEO” headed up by Anne Devereux-Mills, a Marchex board member since 2006 who will also take over as chairman of the board.
In an interview with GeekWire, Devereux-Mills said that the changes stem from recent struggles Marchex has dealt with over the past several months. It laid off 10 percent of its 375-person staff in August after missing estimates for the company’s second quarter earnings report, which caused shares to drop more than 17 percent.
“We really wanted to give a kickstart to an already-solid base by bringing in some new eyes to take us to the next level of profitability and growth,” Devereux-Mills said.
Christothoulou joined Marchex in 2003, shortly before it went public in 2004. He became president in 2011 and CEO in February 2015.
In a statement, Christothoulou said he is “proud of the organization we’ve built and the culture centered on “‘customers first.'”
“The company has a great opportunity fueled by incredible people and I’ll continue to be a supporter,” he said.
Christothoulou provided more comments in an email to supporters, noting that he had “incredible run” at Marchex. From the email:
Over the last several years I had the opportunity to lead a team that built something from scratch into a pioneering +$100M mobile business trusted by many of the world’s largest, most respected brands. It’s been an amazing, rewarding experience to lead and serve the more than 300 friends who are the soul of the company and together transform the business into one of the great, truly client-centric cultures in Seattle and certainly the industry. Even when it was hard it was fun.
The company continues to have a great opportunity fueled by incredible people. I’m a huge believer in the possibilities and will continue to be a resource to the company and people.
Christothoulou, who took over after longtime leader Russell Horowitz stepped down last year, told investors in August that the company was disappointed with its most recent financial results, which included a GAAP net loss of $68 million (a majority of which stemmed from a non-cash charge related to previous acquisitions).
Christothoulou said a “small number of large clients made adjustments to their marketing budgets, changes which unfortunately reduced what they will likely spend on our call marketplace this year.”
“These changes affected us in Q2 and also limit the growth we expected in the second half of the year,” he said on the company’s earnings call. “This is the principal reason for our revised 2016 outlook. We have historically relied on a small number of large multi-million dollar clients to generate a significant portion of our revenue. As a result, we are susceptible to marketing budget fluctuations from a handful of clients, which is what impacted our call marketplace.”
Kokich, a former CEO and chairman at Razorfish, joined Marchex as chief strategy officer in 2013, but left that role in February 2015 when he took over as chairman after Horowitz stepped down.
Remaining board members include Devereux-Mills, Nick Hanauer, Dennis Cline, Ian Morris, and M. Wayne Wisehart.
Late last month, Chief Product Officer Ziad Ismail also stepped down, taking a new role at on-demand trucking startup Convoy.
In June 2013, co-founder John Keister left the company.
Devereux-Mills will lead the interim office of the CEO with support from Horowitz, who is no longer on the board but remains as a “consultant.” Chief Financial Officer Michael Arends; Chief Administrative Officer Ethan Caldwell; and Chief Revenue Officer Gary Nafus will also be apart of the new office. The board will begin a search for the company’s next CEO. Devereux-Mills said Marchex is looking for a “transformative leader.”
Marchex, which went public in 2004, operates search, display, and call advertising analytics. It helps clients like AT&T, Bank of America, and Zillow calculate the effectiveness of their advertising campaigns.
In late 2012, Marchex split into two separate public companies, one operating under the name of Marchex and the other under the name of Archeo, which consisted of a domain name and advertising marketplace.
In April 2015, it sold more than 200,000 domains to GoDaddy as it domains were no longer core to Marchex’s focus.
The company is now increasingly focusing on mobile performance advertising.
Devereux-Mills, who has nearly three decades of global advertising and marketing leadership experience, said Marchex wants to return to profitability. She said the company’s recent struggles — shares are down nearly 40 percent in the past six months — are the result of a combination of factors. She said Marchex sits at the “apex of answers” for helping brands track their digital advertising, but the company “hasn’t been as effective in letting people know there is a solution.”
“We are inventing something new, and that takes a lot of constant attention,” she said. “A lot of times we get it right and sometimes we need to tweak it to get better. We are in a tweaking moment.”
Marchex has eight job openings on its website. The company, valued at about $120 million, had more than $104 million cash on-hand as of Sept. 30. Here’s a look at its stock price over the past year:
