In a sudden departure, Millennial Media founder and CEO Paul Palmieri left the Baltimore mobile advertising company Monday to work for a prominent Maryland venture capital firm.
Palmieri said in an interview his resignation had been in the works for months, though it became effective immediately with an announcement by the company. He joins New Enterprise Associates in Chevy Chase as a venture adviser for technology startups, though he remains Millennial's largest individual shareholder.
Michael Barrett, most recently a Yahoo executive, replaced Palmieri as Millenial's CEO, the company said.
The news of Palmieri's resignation came as the company also announced that it expects to outperform its previous financial projections for the fourth quarter of 2013. Millennial is scheduled to detail its fourth-quarter earnings Feb. 19.
Millennial's stock surged nearly 10 percent Monday to close at $7.36 per share.
The company has been under pressure to do something about its flagging stock price. Initially sold in March 2012 for $13 a share on the New York Stock Exchange, the stock shot up to about $25 the first day but soon began a steady retreat.
Palmieri departs seven years after launching Millennial, combining backgrounds at Verizon Wireless and Advertising.com to dive into the market of building advertising networks on cellphones and smartphones and selling the space to marketers. Under his watch, the company drew $65 million in investments and went on to a $130 million public stock offering in 2012.
The leadership change comes as Millennial continues to compete with tech giants Google and Facebook for shares of the mobile advertising market and as it works to integrate its significant acquisition of competitor Jumptap, a deal completed last year.
"We've been through quite a journey here," Palmieri said. "I think for me, I was looking to say, 'OK, what's the next thing for me, and what am I passionate about?' For me, it was really about entrepreneurs."
Palmieri worked with the company's board of directors to select Barrett, a veteran of companies including AOL, Fox Interactive Media, and AdMeld, a startup that auctioned online advertising space and was sold to Google in 2011. Barrett joined Yahoo in June 2012 as chief revenue officer but left several months later amid continuing executive turmoil there.
"Paul and the team here built a fabulous company," Barrett said in an interview. "It was an opportunity too good to pass up."
In November, Millennial closed its mostly stock deal worth about $174 million for Boston-based Jumptap, an acquisition it expected would provide it with information on more than 100 million mobile phone users so that advertising can be more narrowly tailored to the right audiences.
The addition of Jumptap helped raise Millennial's expectations for the fourth quarter, though Palmieri said it could lead to some job cuts this year as the two companies cut workforce redundancies.
Last month, Millennial renewed the lease on its 96,000-square-foot headquarters at the Can Company in Canton for 10 years, for $1.8 million annually with an option to extend it as much as another decade, according to Securities and Exchange Commission filings.
The company also approved a raise for Palmieri in November, according to an SEC filing, increasing his base salary from $325,000 to $520,000 and his annual bonus target from 75 percent of his base salary to 80 percent of it. Palmieri said annual reviews of executive compensation at the company were occurring as usual, separate from any discussions about his departure from the company.
Palmieri said he expects to stay close to the Baltimore technology industry in his new role. NEA General Partner Patrick Kerins said in a statement that the firm welcomed his expertise in mobile location and ad targeting technology, and Palmieri said he looks forward to putting that to use in Baltimore and elsewhere.
"I'm really excited to mentor and work with entrepreneurs as they attempt to kind of do what we did here at Millennial," Palmieri said. "I think Baltimore has a great opportunity to be a tech hub."
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