& 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. 
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
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.
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (0) comments


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
LRTV Interviews
Heavy Reading: Big Video to Disrupt

1|6|17   |   4:39   |   (1) comment


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's Adi Kishore talks about the challenges of managing and monetizing bandwidth-intensive video, and how service providers will need to transform their networks to cope with the big video explosion.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Ericsson: 5G Heralds 'New' New Economy
Mari Silbey, Senior Editor, Cable/Video, 1/12/2017
Next Plugfest Gets G.fast Closer to Market
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 1/13/2017
TV's Paradox: No HDR Without 4K
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Cable Has One Thing Verizon Needs
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.