TheStreet Inc. said its chief executive will step down by the end of March, leaving the network of financial news-and-information websites searching for a new leader as it struggles to grow in an increasingly competitive market.
Daryl Otte, who has been CEO since 2009 and a director since 2001, will resign from both positions by March 31 but plans to stay on through his departure to help the company find a replacement and transition to new leadership.
Otte said in a statement that TheStreet has expanded its audience in recent years driven by new technology infrastructure and new distribution partnerships. "This is a good time to hand the reins to new talent to continue our momentum," he said.
TheStreet is unusual in the online-news world because it began charging readers for content when it launched in 1996 and has stuck with that strategy while most other news sites focused on free, advertising-supported models. The company generates most of its revenue from subscribers, who pay for stock-picking advice and other financial information. That strategy has been validated in recent years as numerous news organizations, battered by advertising declines, have begun charging for online and other digital content.
Still, growth at TheStreet has been elusive, underscoring how difficult it is for a relatively small, independent outfit to compete in a crowded field of providers of news, analysis and analytical tools for investors and other financial professionals. TheStreet competes with The Wall Street Journal, Thomson Reuters Corp. and Bloomberg LP, among others. The company's 2010 revenue of $57.2 million was down nearly 20% from 2008.
For the first nine months of this year, revenue rose 2.3% from the year-earlier period. The company reported a net loss of $5.8 million for the first nine months compared to a net loss of $3.6 million for the same period last year.
In a statement, Woody Marshall, chairman of the board, credited Otte for "guiding the company and its rejuvenation over the last three years."
A year ago, looking to reduce expenses, the company signed a new three-year deal with its founder, Jim Cramer, under which the host of CNBC's "Mad Money" agreed to forgo a salary and bonus and instead receive a royalty based on revenue from a subscription service on the site, where he tells readers what trades he's going to make with the funds of his charitable stock portfolio.
This story first appeared on WSJ.com.
Write to Russell Adams at firstname.lastname@example.org