& cplSiteName &

Synacor CEO Quits as Financials Plunge

Alan Breznick
3/6/2014
50%
50%

Synacor's stock price sank as much as 10% Thursday before recovering a bit. The company reported disappointing earnings for the fourth quarter and the full year, and its longtime chief executive, Ron Frankel, abruptly announced that he would resign.

Synacor Inc. -- which provides TV Everywhere authentication technology and web portals to a such large and midsized cable operators and telcos as Verizon Communications Inc. (NYSE: VZ), Charter Communications Inc. , CenturyLink Inc. (NYSE: CTL), Suddenlink Communications , and WideOpenWest Holdings LLC (WOW) -- reported that its net income for the quarter dropped 75% from a year earlier to $200,000. The vendor's revenue fell 8.7% to $29.4 million as its main sector, search and display advertising, came in $3.1 million lower than it did a year earlier. (See Synacor & Mediacom Extend Deal.)

The Buffalo, N.Y., company took an even bigger financial hit on its annual results. It reported a net loss of $1.4 million for the year, versus a profit of $3.8 million in 2012. Revenue slipped 8.4% to $111.8 million, due to an $11 million shortfall in search and display ad revenue.

Curiously, on an earnings call with financial analysts late Wednesday, Synacor executives did not provide much insight into the causes of the disappointing financial results beyond a little discussion about how changes in Microsoft Corp. (Nasdaq: MSFT)'s Windows 8 operating system affected its search business. Nor, surprisingly, did analysts press the executives all that much on the reasons for the quarterly and yearly declines.

Instead, Synacor officials highlighted metrics where the company did make progress, such as subscription-based products. They also spelled out some initiatives meant to boost the company's fortunes in 2014 and beyond, including a next-gen TV Everywhere search and discovery platform, an enhanced Cloud ID authentication program, a personalized service for Android devices, and more personalized web portal start pages.

"I think we have some fantastic new products, and our customers are demanding those products," Frankel said on the call. "And we just need to launch them, get them out in the marketplace… Our pace of launching the new products is a key question."

However, in a telling note, the CEO announced his resignation several minutes later. Frankel, who has run Synacor since 2001 and has steered it through several acquisitions (along with an IPO two years ago), said he will step down once the company finds a successor. He did not say why he was resigning.

Frankel, who will remain on the Synacor board of directors and become an adviser to the company, said he expects the search for his replacement to take at least 4-6 months. "It's a little hard to say" how long it will take. "I mean, we just kicked it off."

Analysts questioned whether Synacor, which has been bulking up through acquisitions over the past few years, might now put itself up for sale. Executives said that, even though a sale could always be an option, it's far more likely that Synacor will remain a buyer. (See Synacor Acquires Teknision.)

"We continue to regularly look at acquisitions," said CFO Bill Stuart. "You will probably see some activity on our part over the course of this year as a buyer," assuming the right opportunities are available.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
albreznick
50%
50%
albreznick,
User Rank: Blogger
3/11/2014 | 10:19:58 PM
Re: Too bad
Yep, Craig. That's true.  Synacor did, and still does, seem well positioned. Just seems another video tech company caught in the crosswinds of cable change right now. I wonder what Ron will do next.  
albreznick
50%
50%
albreznick,
User Rank: Blogger
3/11/2014 | 10:17:52 PM
Re: Satisfactory answer?
I agree. Mitch. I thought the analysts should have presed Synacor officialsmore as well. Not sure why they didn't.
craigleddy
50%
50%
craigleddy,
User Rank: Blogger
3/7/2014 | 10:51:43 AM
Too bad
Sorry to hear this. Synacor has good people and seems to be in the right place, but execution and integration with cable tech is never easy. Ron worked hard to build this company and I wish him good luck. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/6/2014 | 7:17:44 PM
Satisfactory answer?
If I were an investor on that call, I'd want to hear more about what Synacor was doing to fix its problems and not about what went well. Although perhaps the CEO's resignation answered that question. 
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
Alan Bateman, Director, Agile Transformation
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
Burt Klein, DevOps Strategist, Tech Mahindra
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Between the CEOs
CEO Chat: UXP's Gemini Waghmare

8|26|16   |     |   (0) comments


Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Google Fiber Can't Be Called a Failure
Carol Wilson, Editor-at-large, 8/26/2016
FirstNet: A Billion-Dollar Boondoggle?
Dan Jones, Mobile Editor, 8/26/2016
WiCipedia: Should Men Be Included? & Olympians Face Discrimination
Eryn Leavens, Special Features & Copy Editor, 8/26/2016
Is There No Stopping Huawei?
Iain Morris, News Editor, 8/26/2016
Google Fiber Downsizing Not Confirmed
Mari Silbey, Senior Editor, Cable/Video, 8/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.