SAN FRANCISCO (04/03/2000) - It's not just the big traditional companies that are losing top executives to the Internet's flavor of the day, the emerging business-to-business market. Now the Net's own success stories are losing them, too.
Debra Chrapaty, chief media officer of online brokerage E-Trade, will become the president and COO of BigVine.com, which provides an online marketplace for businesses to barter their excess inventory in exchange for goods and services.
Chrapaty confirmed that Friday is her last day at E-Trade. "It's an exciting and wonderful opportunity for me," she says of BigVine.
Chrapaty joined E-Trade in 1997 as chief information officer, running the company's technology operations through its rapid growth in 1998 and 1999.
Before that, Chrapaty was CIO of the National Basketball Association. Her efforts at E-Trade were heralded by many in the industry; InformationWeek named her 1999's CIO of the Year. In October, Chrapaty was named E-Trade's chief media officer and was responsible for building up its presence in the digital financial-media industry - an initiative that CEO Christos Cotsakos has been promoting for more than a year.
But so far, E-Trade hasn't delivered any new financial-media products or services. "We are doing a lot behind the scenes," E-Trade spokesman Patrick DiChiro says of the digital-media strategy. "We prefer not to announce things that are under development." Several sources close to E-Trade suggested that Chrapaty might not be moving to BigVine entirely on her own initiative. Despite her efforts, E-Trade's infrastructure was unable to keep up with the demand generated by the company's ubiquitous and costly ad campaigns.
As online trading traffic soared, E-Trade's system suffered a number of headline-making outages. E-Trade brought in Joshua Levine, a seasoned Deutsche Bank technology executive, to replace Chrapaty as CIO last fall. "It's obvious they felt she wasn't the best person for the job," says a source at E-Trade who asked to remain anonymous. "Why else would the CIO of the Year get demoted?"
Chrapaty says she helped hire Joshua Levine to replace her in the position of CIO and that the decision to move to the digital media group was hers.
"My move to digital financial media was not a demotion," she says. "It was an opportunity to take the company to a new place in the post-PC era. It was a change I made willingly. It wasn't a position to minimize my impact on the company. I did it in consultation with Christos." Chrapaty's departure leaves a void in E-Trade's efforts to expand its media efforts, which include pushing its brand, products, services and original content across all types of media.
New customers will be lured to E-Trade through its home-grown content on television, radio and in print. The company plans to launch a magazine and is in talks to develop a deal with Fox Entertainment, which counts Cotsakos as a board member. E-Trade bought two startups last year that executives say are integral to its media strategy: ClearStation, a community site focused on stock analysis, and Abrio, an online-calendar company. But it's not clear how those companies would fit into the plan.
Some observers say E-Trade's plans will prove sound as broadband access becomes more readily available to the individual investors that make up most of the company's client base. "E-Trade is the most aggressive company in the space," says Scott Appleby, an analyst for Robertson Stephens. "What sometimes happens is they make premature announcements." As E-Trade grows in its ambitions and initiatives, BigVine's fledgling status might be a better fit for Chrapaty. The company's list of heavy-hitting investors include VC powerhouse Kleiner Perkins Caufield & Byers, American Express, investment banking veteran Sandy Robertson and executives from investment company Kohlberg Kravis Roberts. None is known for hiring second-rate executives.
"Debra is part of the first-generation E-Trade," says a source close to Chrapaty. "She's not part of the gray-haired pedigree they've brought in. I think she's leaving on a high note." Greg Dalton contributed to this story.