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By Kent Larsen
Resignation of CEO Leaves Iomega's Future in Doubt
ROY, UTAH -- Iomega Corp. CEO Bruce Albertson resigned Monday over
differences with the company's board of directors, including board chairman
David J. Dunn. In the wake of his resignation, investors are wondering what
direction the troubled company will take as it struggles to turnaround its
fortunes and the fall in its stock price.
Albertson, who is not Mormon, became an outspoken figure in Utah in February
when he criticized the LDS Church for "running other peoples lives."
Albertson's criticism seemed to be directed at Utah's liquor laws and the
Church's support for continuing the status quo.
But Albertson's exit from Iomega wasn't because of his frustrations with the
Church or its members, rather it comes because of the company's troubled
future. Known for its Zip drive removable computer storage devices that took
over the category in the early 1990s, Iomega has since struggled to avoid
the image of one-hit wonder. While the company has other products, none have
been as popular as the Zip drive, and the industry has been slowly moving to
higher-volume storage devices, including CDRW drives and DVD drives. In
addition, pervasive connections to the Internet among computer users have
reduced the need for removable storage devices in the categtory.
Under Albertson the company did manage something of a turnaround,
introducing software products that supported the use of its products,
including the Quik Sync software. It also introduced drives for popular new
products like digital cameras and mp3 players. And his efforts nearly
doubling the company's stock price, from $3.25 a share before Albertson took
over as CEO to a high of $6.50 a share. He also delivered a string of five
profitable quarters. However, the profits didn't solve the underlying
problem -- products that dominate a declining category with no strategy for
getting business in a new category.
Meanwhile, the Roy, Utah-based company employs more than 3,000 people, many
of whom are Mormons. Dunn, also a Mormon, is faced with yet another search
for a CEO, his third in just over two years, in the hope of saving those
jobs and the $800 million invested in the company.
Sources:
Iomega shares drop after 2nd CEO in 2 years
Reuters 22May01 B4
Iomega CEO Zips Away
Motley Fool 22May01 B4
Iomega CEO Albertson quits
Reuters 21May01 B4
Iomega Corporation Announces Resignation of President and CEO
PRNewswire 21May01 B4
See also:
Whither Iomega?
Church's Role in Utah Criticized on SlashDot.org
Olympic 'Identity Crisis' in Salt Lake City says Christian Science Monitor
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