Spring cleaning

Contact: Brenon Daly

For many tech companies, it’s time for a bit of spring cleaning. Specifically, there’s been a fair amount of sweeping out of corner offices. Last week saw Time Warner turn over the reins of its struggling AOL unit to a former Google sales executive. (Yes, we share the puzzlement around Tim Armstrong’s move.) Today, Internap Network Services got a fresh face at the top as wheeler-dealer Eric Cooney had his first day as chief executive at the beaten-down networking company. And in just two weeks, John Thompson ends a decade-long run as CEO of Symantec, turning over the security and storage giant to current COO Enrique Salem.

Amid all these moves, we wonder if the sweeping changes in companies’ executive suites will be accompanied by some sweeping out of companies’ portfolios. In the case of AOL, we’re pretty sure that the new appointment will hasten a sale of the unit. (My colleague Thomas Rasmussen noted last summer the concerning ‘lack of urgency’ at Time Warner over AOL, even as subscribers continued to plummet.) When Symantec announced last November that Salem would take the top spot, we speculated that NetBackup, Symantec’s backup and recovery unit, could find its way onto the auction block.

But what about today’s appointment at Internap? We wonder if the new leadership might not take a fresh approach to its underperforming content delivery network (CDN) unit. Internap’s big move into CDN came in October 2006, when it paid $217m in stock for VitalStream Holdings. Internap has acknowledged that it overpaid for the company, writing down a chunk of the purchase price.

And, as my colleague Jim Davis noted in a Tier1 report last week, the performance of Internap’s CDN business has lagged that of its rivals. In fact, Internap’s CDN unit has posted revenue declines for three straight quarters. We would hasten to add that the company’s just-appointed CEO has a solid M&A record behind him. In his previous post as head of Tandberg Television, Cooney oversaw a number of acquisitions before selling the company to Ericsson in early 2007. Could he be planning some dealmaking around Internap’s CDN business?