Optical components

Avanex's Major Coup

5:25 PM -- Judging from the early returns on our message boards, I'm not the only one surprised and disappointed to see Jo Major get kicked out of Avanex Corp. (Nasdaq: AVNX). (See Avanex Axes CEO Jo Major.)

It's odd to see a company admit to firing a CEO. Major, by most accounts, had done quite a good job turning Avanex around. Yes, it's taken four years and counting -- not including the space between the Alcatel Optronics deal and Major's arrival -- but things weren't exactly ice cream and cupcakes in optical components during that time. (See Smiles Abound at OFC/NFOEC.)

Ray McConville, who wrote today's story about Major, speculates that a disagreement over merger strategy did the trick. That seems more than plausible. Consider our report from the The Optical Society (OSA) Executive Forum in February:

"If you look at how many of us it takes to make up 80 percent of the revenues in this industry, it takes like 21 of us," Major said, noting that a more ideal situation would have three or four players holding 20 percent shares each. "It may take a little while to get there, but those are the kinds of endpoints you need to see before the industry's going to get fixed."

I'm convinced Bookham Inc. (Nasdaq: BKHM; London: BHM) and Avanex tried to merge circa 2006, and couldn't pull it off. Now, with Finisar Corp. (Nasdaq: FNSR) and Optium Corp. (Nasdaq: OPTM) on the verge of combining, a lot of middle-tier players are in danger of becoming less relevant to their big customers. Maybe Major had a plan too bold for the board to accept.

Major has been one of the most liked and respected CEOs in this sector, and we were right to call it a "coup" when Avanex lifted him out of JDSU (Nasdaq: JDSU; Toronto: JDU). We'll keep an eye out for him at the next OFC/NFOEC. Former CEOs have a habit of turning up there.

— Craig Matsumoto, West Coast Editor, Light Reading

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