Network Associates' new leader may not bring a far-reaching vision to the folds of the security services company, but he aims to change the company where it matters most: the bottom line.
With 24 hours under his belt as chief executive at troubled Network Associates, George Samenuk's strategy boils down to two words: stock and sales.
"The IT space that we are in -- security and services -- is the hottest thing going," said the 45-year-old IBM veteran. "But we need to get the shareholder value up and we need to improve sales execution."
The new chief has his work cut out for him. Network Associates stock plummeted 68 percent to $3.75 a week ago, after the company announced a revision in its accounting practices would turn an expected operating profit into a net operating loss of $130m to $140m, or about 41 cents a share. Previously, analysts had been forecasting a gain of 31 cents a share for the quarter.
On top of the massive shortfall, the company canned three of its top executives this month, including William Larsen, the intensely competitive former chief executive.
The financial reversal comes as a result of a change in accounting procedures. The company's new accounting method has ceased counting shipped products as sold until the company's distributors have actually pushed the products out the door. Network Associates estimated the change would strip $120m -- almost 14 percent of its previously estimated annual revenue -- from its coffers, until it could close the sales.
Samenuk knows his job is to build trust and get the product sold.
"It is basic blocking and tackling," he said, pointing to the company's $650m in cash and strong brands as strengths.
In addition, he expects the economic slowdown won't hurt the security sector as much as it has other technology markets. "For today's companies, if it's a question about putting in new PCs or enhancing network security, most are going to go with security."
Before joining Network Associates on Wednesday, Samenuk headed surplus business-equipment auction site TradeOut.com as chief executive. He joined the company in January 2000, two months after a group of investors -- including eBay -- put $29m in venture capital into the startup.
Two months later, the company filed for an initial public offering with the Securities and Exchange Commission. A TradeOut representative said the IPO was on hold until the market became more favorable.
Before joining TradeOut, Samenuk headed IBM's Americas Unit as general manager. He spent more than 22 years at the computer giant.
Network Associates sells security software and services to consumers and businesses. Its five business units include McAfee, Sniffer Technologies, PGP Security, Magic Solutions and MyCIO.com.
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