Ragy Thomas Succeeds Ousted CEO Al DiGuido at Epsilon Interactive

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Alliance Data Systems Corp. canned Al DiGuido, CEO of its Epsilon Interactive unit within the Epsilon family, promoting chief technical officer Ragy Thomas to the top post at the e-mail marketing and automation technologies firm.

This sudden dismissal comes as Epsilon undergoes a major reorganization and acquisition spree, with $600 million in recent investments. This includes the planned purchase of database firm CPC for $70 million in response to a growing need for data within a changing marketplace.

"Al was instrumental in getting the interactive part of Epsilon to where it is today," said Michael Iaccarino, president/CEO of Epsilon, the parent company.

Mr. Iaccarino declined to comment on why Mr. DiGuido was fired or whether the bottom line was an issue. But he said Mr. Thomas was the right leader for the new direction the firm would be taking.

Mr. DiGuido was not available for comment.

Mr. Thomas's appointment coincides with a restructuring of Epsilon into four internal business groups under the main Epsilon brand, all of which report to Mr. Iaccarino. Mr. Thomas will lead the interactive channel of the Epsilon parent firm.

The other Epsilon channels include the strategic database services group, led by Bryan Kennedy; the agency direct services, headed up by David McRae; and the new CPC channel, which is slated to be called the Epsilon Data Services Group and run by current CPC president, David Thornbury.

Interestingly, a Google search for "Al DiGuido Fired" brings up an opinion piece that Mr. DiGuido published on ClickZ.com called, "Consumers to Retailers: You're Fired." In the piece, Mr. DiGuido said that being fired is seldom a surprise and that there are often warning signals.

Mr. DiGuido is a well-known speaker and e-mail industry evangelist. He shepherded the sale of Bigfoot Interactive last September to Alliance Data Systems, which bought the e-mail specialist for $120 million and renamed it Epsilon Interactive. Mr. DiGuido led Bigfoot.

The following November, Epsilon followed up on the Bigfoot purchase by buying Frequency Marketing Inc., a firm focused in marketing services and technology for the design, implementation and management of loyalty marketing programs. In April, Epsilon Interactive bought DoubleClick's e-mail unit for $90 million.

And this past August Epsilon bought Big Designs Inc., a design company with clients like Time Warner, A&E Networks, Hearst, American Express and Polo Ralph Lauren. Then, of course, there is the CPC acquisition.

Beyond such moves, Epsilon has recently hired new executives like Julia Hochberg, vice president of strategy and planning in the New York office, and Ted Wham, senior vice president and general manager of operations for its expansion into the European e-mail market.

Mr. DiGuido's dismissal is the second major CEO departure this week. The Sharper Image Inc. CEO Richard Thalheimer was axed after the specialty retailer has steadily been losing revenue over the last two years.

However, turnover at the CEO level is not a new phenomenon around buyout periods.

"As other mergers in this sector have illustrated, this type of management change is not uncommon," said David Daniels, research director at JupiterResearch, New York. "InfoUSA made similar changes about a year or so ago with Yesmail when the company acquired @Once."

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