United we stand: Mark R. Goldston of United Online watched as a 'nuclear winter' eviscerated the tech sector in 2000. But his company is now thriving.MARK R. Goldston, the chief executive for United Online Inc., is a big-time sports fan. His Warner Center office wall is adorned with autographed photos of Mickey Mantle Noun 1. Mickey Mantle - United States baseball player (1931-1997) Mickey Charles Mantle, Mantle , Ernie Banks Michael Jeffrey Jordan (born February 17 1963) is a retired American professional basketball player. and football helmets of Joe Montana Joseph Clifford "Joe" Montana, Jr., (born June 11 1956 in New Eagle, Pennsylvania), nicknamed "Joe Cool" and "The Comeback Kid", is a retired American football player whose professional career in the National Football League (NFL) spanned the late 1970s through the and Joe Namath Joseph William Namath (born May 31, 1943), also known as Broadway Joe, was an American football Hall of Fame quarterback in the American Football League and National Football League during the 1960s and 1970's. Namath played for the New York Jets for most of his career. . If there were an Internet Hall of Fame, the 51-year-old executive would be a shoo-in. He has quarterbacked the No. 2 dialup Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. to annual sales of $525 million last year, with earnings of $47 million. He's had to call a number of audibles in the five years since he created United Online from the unification of the NetZero and Juno services, including the dot-com bust Refers to the years 2000 to 2002, when the bottom fell out of the dot-com industry and hundreds of dot-com companies went bankrupt. All the rest lost a huge amount, if not almost all, of their stock valuation. See dot-com bubble. of 2000, lawsuits, mergers and the threat of delisting from the Nasdaq market. The firm today is cash-rich and debt-free with a total equity of $322 million. He brought little Internet savvy--but tons of marketing and management knowledge--to United Online. He had been president of the Einstein/Noah Bagel Corp. and the L.A. Gear shoe company. He also did stints at Clairol, Revlon, Reebok Ree´bok` n. 1. (Zool.) The peele. and Faberge, where at 31 he was one of youngest corporate presidents ever. He seems most proud when talking about his wife of 24 years, Nancy Jane, and their twin sons, Adam and Ryan, who are walk-on basketball players at USC An abbreviation for U.S. Code. . Question: Besides all the sports stuff on the wall, you have a bunch of patents. What are those for? Answer: Well, in addition to being a marketer, I'm an inventor. When I was in the sneaker business (at L.A. Gear), I came up with lighted shoes, inflatable pump sneakers sneakers Noun, pl US, Canad, Austral & NZ canvas shoes with rubber soles sneakers npl (US) → zapatos mpl de lona; zapatillas fpl , adjustable heel springs, energy return systems cushioning, all of that. Thirteen in all. Q: Still making money on them? A: Unfortunately, the rules were that you have to assign any inventions to your company because, obviously, you would be conflicted if you were getting royalties on your own invention. I would have billions of dollars in royalties if I weren't an employee. Instead, what I have right now are 14 patents. Q: What's the other patent, the one that's not shoes? A: I just got my first Internet patent, which I applied for four years ago. We got a patent on the ability and technology to show you an ad based on the category or the type of product online right now. So, if you looked at an ad for Ford Motor Co., I could then run over to you an ad for a General Motors car when you're at the Ford site. It's basically predicting what you'll be interested in. Q: How did you become interested in United Online? A: I got a call from a friend of mine who said that Calpers had invested some money with a local venture capital fund called IdeaLab Capital Partners. I didn't know anything about them, but they said, "Would you go out and meet with these guys? We want to know more about this Internet thing that seems to be percolating and we're kind of invested in it." I went out to meet with these guys at the end of the lunch, they said there was a company that they didn't invent, but they had invested in, called NetZero. Q: What did you think of the company? A: It really wasn't a company. It was about 25 people. This was in 1998. And eight years ago on the Internet is like an eternity. Anyway, they had technology they had invented that would run persistent ad above the browser that would give you your connection to the Internet, and if you tried to close your ad, you'd lose your connection to the Internet. So I go out to Westlake Village to see it, and I come into this room with about 25 people and some equipment. I thought I was in the R&D lab. They showed me the technology and said, "That really looks cool. Do you have any revenues yet?" "No." Have you sold any advertising yet?" "No, and we really need to go out and raise some money because we're going to run out of money very shortly." Q: Did you have any idea it would turn into the firm it is today? A: Some people thought it was a midlife crisis midlife crisis n. A period of psychological doubt and anxiety that some people experience in middle age. midlife crisis . Everybody except my wife, who said, "'You should definitely try this." So I shut down my turnaround business, called all my clients and said, "Look, I'm going to go ahead and do this" and they all said, "You are out of your mind." I drive to work the first day and I have a desk in a converted broom closet Noun 1. broom closet - a small room for storing brooms and other cleaning equipment closet, cupboard - a small room (or recess) or cabinet used for storage space and we went and raised $34 million within four weeks of when I joined, which at that point was the largest private capital round ever raised in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, . Q: Where did you get it? A: Ironically, we went to Compaq computers and Compaq put in $15 million. At the time, I knew that venture capitalists weren't going to want to get diluted, so they matched. And then a bunch of us and other investors put in some money and we were able to raise $34 million in four weeks. Q: Selling Compaq was quite a coup, right? A: The deal was we would let them invest in our company if they would put us on every Compaq Presario Presario is a series of desktop computers and notebooks from Compaq. The Presario family of computers was launched for the consumer marketplace in September 1993. Although HP has since acquired Compaq, the Presario name was not discontinued due to its marketability. Computer. Little NetZero with 25 people in a room in Westlake Village--it almost sounds like a joke. It's like a Little Leaguer saying "I'll let you sponsor my Little League team, if you'll let me pitch for the Yankees." Q: Pinstripes suited you? A: They let us pitch and we didn't do badly. We got $34 million. This was in May 1999. We went from the A round of financing to an IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. led by Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. in 11 months. To my knowledge, that had never been done. Q: You did the IPO in September of 1999? A: I joined in March and by Sept. 24, 1999, we were ringing the bell at the Nasdaq, which is unbelievable--from a single room. That was NetZero and everything was hunky hun·ky 1 n. pl. hun·kies Offensive Slang Used as a disparaging term for a person, especially a laborer, from east-central Europe. dory. We were rockin' and rollin'. And then the nuclear winter hit. Q: You mean the dot-com bubble Refers to the late 1990s during which countless Internet companies were riding an enormous wave of enthusiasm that pushed their stock valuations into the stratosphere even though they never made a penny. bursting? A: The Internet crashed and burned in March and April of 2000. So we sold 10 percent of the company to Qualcomm for $144 million in cash, which for us was like a private placement and like a secondary offering. We still had $140 million of our IPO money left, giving us $284 million in cash during the nuclear winter. At the end of the lay, it turned out to be a godsend god·send n. Something wanted or needed that comes or happens unexpectedly. [Alteration of Middle English goddes sand, God's message : goddes, genitive of God, God , because we were able to power our way through this Internet darkness, watching our stock and everyone else's plummet. We were eviscerated. Q: How did you turn NetZero into United Online? A: Everyone said that we were two skunks trying to breed a mink. Turned out they were right. The Wall Street Journal actually wrote an article saying that, and somebody else said we were like that Monty Python skit, where the knight keeps getting limbs hacked off and all the time he's saying. "Don't worry, it's just a flesh wound flesh wound n. A wound that penetrates the flesh but does not damage underlying bones or vital organs. ." Since that day, we've morphed the company about four times. We're nothing if not resourceful. Q: What's behind that resilience? A: We firmly believe in our strategies, but we know enough to write them in pencil because we are in a very dynamic industry that is constantly changing. We're a hugely profitable company. Between NetZero and Classmates Classmates can refer to either:
Q: How many employees are there? A: About 1,100 hundred worldwide, about 500 here. We have exceptionally low turnover. It's a great place to work. My theory is to hire the best people, compensate them well and keep them in an environment where they feel stimulated and happy and they will be loyal. And they have been. Most of our top executives have been with me from the beginning. Q: What was your career turning point? A: It was probably when I became president of Faberge at 31 years old. It taught me to have respect for the guys I competed against on the Internet. When I got into the Internet business, there were a bunch of CEOs that were 30 years old. These were tiny little companies. And I said to myself, "Don't dismiss these folks as competitors because of the age of these guys running them." It was also a turning point because it had always been my brass ring to try to be the president of a big consumer product company. I had wanted to do it by the time I was 45. Q: What has been your biggest career challenge? A: Probably coming into an industry I knew zero about. That was at a time when there was no manual for operating an Internet company because no one else had any experience, either. Pretty much like the 49ers that were panning for gold. They came out West and didn't know if they were drilling for dirt or gold. My biggest challenge was recalibrating myself as I moved from a large enterprise business into a raw startup that had to generate new capital every month just to stay in business. Q: What was the most radical difference at United from your past with Clairol and Revlon? A: Those companies existed before I got there. This was a company that we were building brick by brick. We didn't really have a company. We didn't have any revenue. So we basically had to hire a team of people and come up with a business model that would be salient, generate revenue and reduce our burn. And while we were doing all that, we had to convince investors, private investors, that they should invest their capital in a four-year payback into our company. That's very different from going to work for Revlon when it's troubled. It's still a powerhouse. People thought I was nuts for doing this, giving up a tremendous business to go work for a very small amount of money. Q: You took some heat early on, right? A: People were saying, "You're giving away Internet access? It sounds ridiculous. It sounds like pro bono Short for pro bono publico [Latin, For the public good]. The designation given to the free legal work done by an attorney for indigent clients and religious, charitable, and other nonprofit entities. work." I find it ironic that as much money as we make today, our original free businesses are very profitable. I had to endure a lot of personal criticism. You really start to find out who your friends and your supporters are. My wife, Nancy Jane, was great. From the beginning, she said "People are going to be throwing stones." Q: You grew up in Chicago? A: And Atlanta. I lived in Skokie, Ill. My sophomore year in high school we moved to Atlanta Slang for a 404 error on the Web, which is a link to a missing page. The area code for Atlanta, Georgia is 404. See 404 error. . Remember Community Discount in Chicago? My dad was the president of Community Discount, so my dad was one of the guys that started all that. Q: Did it influence you? A: One of the reasons I went into consumer packaged-goods marketing was that my father was one of the major retailers of consumer packaged goods product. So I knew that I didn't want to be on the side that was selling it at the store level. I wanted to be the guy creating the product. It has a huge influence on my life. My dad died right when I got out of graduate school when I was 22. Q: It must have been tough uprooting at that age? A: When we moved to Atlanta, it was right next to "Pistol" Pete Maravich. He was a rookie then. So I rationalized it was OK to move to Atlanta because they had (baseball star) Hank. Aaron and (basketball star) Maravich. I used to play basketball at the YMCA YMCA in full Young Men's Christian Association Nonsectarian, nonpolitical Christian lay movement that aims to develop high standards of Christian character among its members. with Pistol Pete and I used to caddy A plastic container that holds a CD or DVD disc for added protection. The bare disc is placed in the caddy, and the caddy is inserted into the drive. A caddy is not a jewel case. A jewel case protects the disc for transportation. A caddy protects the disc while reading and writing. for him, actually. Q: What's your typical day like? A: Hectic. I have several meetings during the course of the day. I give myself time to firefight fire·fight n. An exchange of gunfire, as between infantry units. because we own five different companies and lots of things come up. I would say that very few of my days are the same. This is a very high-powered, fast-paced business. I never know what I'm going to read about when I wake up with my competitors. Q: What person do you admire the most? A: Probably growing up, my Dad was a huge role model. But I would say that when I was growing up, my most admired person was Mickey Mantle. Then as I got older I learned more about the life he led, I'm not sure that would have been the same. But when I was a little boy I would say that my most admired person was Mickey Mantle ... and John Kennedy. Q: What about (Chicago Cubs star) Ernie Banks, up there on the wall? A: I can relate to Ernie. I was one of the original 1969 Bleacher Bums. I was there. That was me. I still have my yellow hard hat. "The Cubs Will Shine in '69. The Cubs Will Be Heavenly in 1970. Let's Play Two in '72." There used to be a preview show in Chicago before the season and they always had Ernie. And we would always say, "This is gonna be our year." That's why we have character. I'm 51 years old and the Cubs have never won in my lifetime. Q: And they probably won't. A: But it builds character. Q: What kind of money does someone in your position make? A: What do you mean by that? Someone says 'What's your job worth?' What's it worth when you start it off with 24 people and you have no revenue and you have no capital. And now you have a company that's worth close to a billion dollars and your company had $135 million in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become . What's that worth? You do your job. You post your result. The market, if you're a public company, values you every day. It's no secret. If you think the market doesn't value your company correctly, then you look at your product. Mark R. Goldston Title: Chairman, President and Chief Executive Company: United Online Inc. Born: 1955, Skokie, Ill. Education: B.A. from Ohio State University Ohio State University, main campus at Columbus; land-grant and state supported; coeducational; chartered 1870, opened 1873 as Ohio Agricultural and Mechanical College, renamed 1878. There are also campuses at Lima, Mansfield, Marion, and Newark. , M.B.A. from Northwestern Career Turning Point: Being named chief executive of Faberge at 31 Most Admired People: Mickey Mantle, John F. Kennedy "John Kennedy" and "JFK" redirect here. For other uses, see John Kennedy (disambiguation) and JFK (disambiguation). John Fitzgerald Kennedy (May 29, 1917–November 22, 1963), was the thirty-fifth President of the United States, serving from 1961 until his assassination in Personal: Married, with twin college student sons |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion