EarthLink Chairman Resigns; Founder Says He’ll Step In
EarthLink Network founder Sky Dayton will return to the country’s second-largest Internet service provider as chairman after Charles Brewer resigned the position Wednesday.
Dayton founded EarthLink in 1994 after a frustrating experience trying to log on to the Internet. The company grew to employ 2,000 people--most of them in Pasadena--and served about 1.5 million customers when it agreed to merge with former rival MindSpring Enterprises of Atlanta.
When the $4-billion deal closed in February, Dayton gave up his role as chairman to concentrate on ECompanies, a Santa Monica Internet incubator he launched last year with former Disney executive Jake Winebaum. Dayton, 28, said he will continue to work at ECompanies, where he oversees development of consumer-focused e-commerce start-ups.
In a prepared statement, EarthLink said Brewer resigned “to pursue other interests.” His wife gave birth to a girl just last week.
“He just decided it was time for him to move on and do something new,” said EarthLink Chief Executive Garry Betty, who runs the company with President Mike McQuary.
Brewer served as chairman and chief executive of MindSpring before it merged with EarthLink and continued on as chairman after the deal closed. He had discussed leaving the company for about a month before his resignation.
Brewer also liquidated his 3.9% stake in EarthLink. At Wednesday’s closing price, Brewer’s shares would be worth nearly $52 million.
Dayton said Wednesday that his decision to become more involved with EarthLink did not signal any disillusionment with the prospects for ECompanies. The high-profile incubator has yet to create a break-out company, and many observers believe it has not lived up to its initial hype.
“The reality is I’m just going to keep doing what I’ve been doing since the merger with MindSpring,” Dayton said. According to the latest proxy, Dayton owns 3.9% of EarthLink.
As an EarthLink board member, Dayton has maintained his ties with the company and made sure it stayed “on track” with his original vision for the firm as a consumer-friendly ISP.
EarthLink’s stock has lost two-thirds of its value since the merger closed. It hit a 52-week high of $31.44 the week after the deal was finalized and sank to a 52-week low of $10.45 during trading Wednesday. The stock finished the day at $11.13, up 19 cents in Nasdaq trading. The executive changes were announced after the market closed.
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Times staff writer Debora Vrana contributed to this report.
