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Case
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Reference no. IMD-3-0765
Published by: International Institute for Management Development (IMD)
Originally published in: 2001
Version: 10.09.2003

Abstract

This is a general management case that deals with issues such as leadership and the role of strategy in a dot.com company. NetRadio, founded in 1995, was the first company to broadcast music over the Internet. It aimed to produce and deliver custom music, information and original programming to the global Internet community on a continuous 24- hour-per-day, 7-day-per-week basis. The case describes the several challenges that Ed Tomechko, the Chief Executive Officer (CEO) of NetRadio, faced when he took over the company in January of 1999. In short order, he was also asked by his Board to take the company public. Tomechko did so successfully, raising $33 million in a tough Initial Public Offering (IPO) market. Despite all of these efforts, the NetRadio stock lost nearly 90% of its market value in less than a year. Particpants will be challenged by this case to think about how to assess the performance of a dot.com company and its CEO. The NetRadio case can be used as a standalone teaching tool or in conjunction with a short supplement and a four part video series (IMD-3-0765-V) that has been developed to complement the case. The first part of the video, 'Taking Charge of NetRadio', presents Tomechko and the key challenges that confronted him when he took charge of NetRadio. The second part of the video, 'The First Year After IPO', together with a short case supplement, 'Ed Tomechko's Scorecard' (IMD-3-0766) describe Tomechko's accomplishments. The third part of the video provides a short update on the case. The fourth is an interview with Tomechko on the challenges of running a stand alone dot.com company. A sequel is available 'NetRadio. com: Transforming a Dot.com Pioneer Update October 2000 to March 2001' to accompany the case.
Location:
Industry:
Size:
1999 sales of USD1.4 million
Other setting(s):
2000

About

Abstract

This is a general management case that deals with issues such as leadership and the role of strategy in a dot.com company. NetRadio, founded in 1995, was the first company to broadcast music over the Internet. It aimed to produce and deliver custom music, information and original programming to the global Internet community on a continuous 24- hour-per-day, 7-day-per-week basis. The case describes the several challenges that Ed Tomechko, the Chief Executive Officer (CEO) of NetRadio, faced when he took over the company in January of 1999. In short order, he was also asked by his Board to take the company public. Tomechko did so successfully, raising $33 million in a tough Initial Public Offering (IPO) market. Despite all of these efforts, the NetRadio stock lost nearly 90% of its market value in less than a year. Particpants will be challenged by this case to think about how to assess the performance of a dot.com company and its CEO. The NetRadio case can be used as a standalone teaching tool or in conjunction with a short supplement and a four part video series (IMD-3-0765-V) that has been developed to complement the case. The first part of the video, 'Taking Charge of NetRadio', presents Tomechko and the key challenges that confronted him when he took charge of NetRadio. The second part of the video, 'The First Year After IPO', together with a short case supplement, 'Ed Tomechko's Scorecard' (IMD-3-0766) describe Tomechko's accomplishments. The third part of the video provides a short update on the case. The fourth is an interview with Tomechko on the challenges of running a stand alone dot.com company. A sequel is available 'NetRadio. com: Transforming a Dot.com Pioneer Update October 2000 to March 2001' to accompany the case.

Settings

Location:
Industry:
Size:
1999 sales of USD1.4 million
Other setting(s):
2000

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