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March 28, 2011 at 4:05 PM

RealNetworks CEO abruptly quits, stock dives

Barely a year after taking the job, RealNetworks Chief Executive Bob Kimball has resigned, the company announced today.

Kimball was in the process of restructuring and rebuilding Real, which has zigged, zagged and lurched through several management changes over the last two years.

Real announced the change after regular trading closed Monday. Its stock dove today after the market opened. At last check it was down 7 percent, to $3.67.

Company executives said Kimball left on his own accord after largely completing the restructuring. They said he decided after more than a decade at Real that he wanted to do something else and spend more time with family.

The move comes as Real’s entering an intense several years that will test its plan to operate as a smaller company that’s more focused on phone companies and other business customers, as well as games and consumer services.

During Kimball’s tenure, the company also developed a new online media service that may compete with upcoming media services from Amazon.com, Google and Apple, but the company’s stock has bobbed below $4 for most of his tenure as chief executive.

During 2010, sales fell 29 percent to $401.7 million and the company reported an operating loss of $34.5 million. Its margin improved to 64 percent, up from 60 percent the year before, when it lost $237.2 million.

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A former IBM attorney, Kimball was Real’s chief lawyer for 10 years until founder Rob Glaser resigned as chief executive on Jan. 13, 2010. Kimball stepped in as acting chief executive, then was chosen as the permanent replacement.

Glaser said he’s not interested in becoming chief executive again and will remain chairman. He praised Kimball, saying “he’s been associated with some of Real’s most important and exciting developments.”

“I’m hightly empathetic to the fact there comes a time when you want to step back and get on a different boat,” Glaser said.

Kimball is “a great guy and the company will miss him but we built a strong bench, we built the company up for success particularly in this next chapter,” Glaser said. “I think it’s fair to say that’s a different kind of animal and it’s something where you need to sign up for a three, four-year cycle around that.”

The transition shouldn’t slow Real’s rebuilding, Glaser said. Hiring a new executive from outside the company is actually “likely to accelerate change,” he said.

Kimball wasn’t available for an interview but issued a statement in the press release, saying that he “took on this role to lead a restructuring and transformation of RealNetworks into a more lean, efficient and effective business and we have completed that phase of RealNetworks’ transformation. Over the past year we have simplified our business, removed more than $70 million in annualized operating expenses and created an entirely new, award-winning product called Unifi. We are delivering on our promise to build products people love.”

Real’s executive vice president, Mike Lunsford, 43, will serve as interim chief executive while Kimball’s replacement is found. Lunsford said he’s not interested in the permanent job.

Lunsford (left) was interim chief executive of Earthlink before joining Real in 2008. He has led the company’s core business including RealPlayer, Helix and enterprise messaging services provided to phone companies.

Lunsford also recently began leading Unifi. The service is close to launching with phone company Vodafone Germany and a U.S. launch is planned for mid summer.

No major changes are planned while a new chief executive is found, “to keep things consistent and stable here,” Lunsford said.

There was no fallout that led to Kimball’s resignation, Lunsford said. “No, this is entirely Bob’s doing,” he said. “We’ve had a difficult year with the restructurings, resimplification, all those things. Signing up for the next part – which is the ongoing and hard work to grow the company – is just a daunting task for anybody.”

Comments | Topics: bob kimball, CEO, digital media

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