Kevin Randolph, chief executive of Asia Online, a company he transformed from being a non-descript internet access company into an integrated one-stop-shop for internet solutions, has left the company, according to people familiar with the situation. It is not immediately clear whether he resigned or was fired.
The move comes just weeks after Credit Suisse First Boston cancelled the Hong Kong-based company's plan to list up to $100 million in shares for the first time on Nasdaq, citing hostile market conditions. Asia Online provides internet access, web hosting, network integration and systems applications to small and medium sized Asian businesses looking to expand regionally or across the Pacific.
In an interview immediately after the listing had been cancelled, Randolph expressed confidence in the company's future. He said the company had some $50 million in the bank, and could continue to grow, albeit more slowly, until the markets improved.
"Many of us are very shocked and upset," says one staffer, who asked to remain anonymous. "Nothing has been officially announced yet."
Analysts say the company is well positioned to take advantage of Asia's rapidly growing market for web hosting and integrated services. A web hosting company houses, manages and upgrades the computer servers needed to run web sites. According to International Data Services, a research house, Asian companies are set to spend $27 billion on information technology services by 2004, up from about $12 billion in 1999.
Randolph, 51, joined Asia Online in 1998 when it was called Asia Communications Global. It was founded by two institutions and a couple of Chinese businessmen. Randolph was initially hired as a consultant. His job was to recapitalize the company and get as much out of it as he could for the investors. Instead he decided to keep it going. Softbank of Japan sustained its investment and Randolph invested $100,000 in return for 8,713 shares of series A preferred stock. Randolph also received a salary, including $10,000 in living expenses, of $360,000.
At his time of joining, Randolph also bought 1,062,500 shares of common stock for $0.02 a share. Asia Online has the right to repurchase a portion of those shares since Randolph is leaving before March 2002. Randolph's shares represent just under a sixth of the company's 7 million shares of outstanding common stock, or 3.4% of the company. Softbank, the biggest investor, holds nearly 29.4% of the company.
Randolph is an entrepreneur and engineer who has worked at numerous companies including Bank of America and Interactive Network a wireless interactive television game company he co-founded. His departure will be a blow to Asia Online, which had attracted some heavy-hitting venture capitalists such as Pequod Capital, GE Capital and Softbank Technology Ventures. As much as they were backing the idea, they were also backing the international management team Randolph had put together and led. Together they've pumped $143 million into Asia Online since its formation in December 1998.
Still there were signs Randolph might not be in it for the long haul. His family still lives in California and Randolph, who commutes back and forth, has been living out of suitcases and myriad hotels for the last year and a half. His resume is an eclectic mix of stints at investment companies, media companies and internet companies. His typical modus operandi is to fly into a situation, fix what needs fixing, organize an IPO if necessary, and fly on to pastures new.
But Randoph had given no indication, to reporters at least, that he was getting ready to fly the coop. On the contrary, he was becoming increasingly enmeshed in Asia's culture, and that was beginning to show up in the company's results.
In the first six months ended June 30, 2000, the company generated just 51% of its revenue from internet access; 44% came from web integration and web development and 5% from web hosting. Randolph's goal was to eventually generate 50% of the company's revenue from "annuity" businesses such as web-hosting and 50% from professional services such as systems integration and web development. The company operates data centres of different grades in 10 centres across Asia with a total capacity of 35,000 square feet.
Neither Mike Dunn, the company's spokesman, nor Randolph, could be immediately reached for comment.