Black & Decker veteran leaps from tools to Web

Fired executive now No. 2 at Amazon.com

June 26, 1999|By William Patalon III | William Patalon III,SUN STAFF

Joseph Galli, a passionate marketer forced out two months ago as head of Black & Decker Corp.'s power tools business, has been named the first president and chief operating officer at one of America's hottest growth companies -- Internet retailing giant Amazon.com Inc.

In doing so, Galli chose cyberspace over potato chips: After agreeing to become North American president of Pepsico Inc.'s Frito-Lay unit late Thursday, Galli quickly changed his mind and accepted the presidency of Amazon, sources said.

Galli, 41, will report to Amazon founder and Chief Executive Officer Jeff Bezos. The appointment, effective immediately, is part of a move by the Seattle-based company to strengthen its management team as it expands into new businesses such as online auctions, toys, pet supplies and even pharmaceuticals.

"I feel like the luckiest guy alive," Galli said last night. "I'm so excited about this job."

Bezos, 35, said Galli is a "passionate, hard-working person who starts with the customer and works backward. He obsesses over giving the customeran end-to-end experience."

Galli, who plans to keep his Glyndon home because he has family in Maryland, says he will live in the Seattle area. Though he and Bezos began talking about six weeks ago, sources said Galli accepted the job late Thursday with the Purchase, N.Y.-based Pepsico -- signing an employment letter -- but later decided to go with Amazon.

Galli declined to discuss his dealings with Pepsico. Pepsico could not be reached for comment yesterday.

"He made a choice to go with the next-generation business model instead of a premier example of the existing business world in Pepsi," said Prudential Securities analyst Nicholas Heymann, who knows Galli well from covering Black & Decker.

Said Galli: "This is a chance to be a part of the `New Economy.' "

Galli's new job jump-starts a career that was temporarily squelched in April when he was fired as head of Black & Decker's power tool business, having lost favor with Nolan D. Archibald, the company's chairman and chief executive officer.

Galli had hoped to ascend to the top spot at the Towson-based company, where he had worked for 19 years. Archibald replaced Galli with an executive recruited from General Electric Co.

Associates say Galli was crushed by the firing, although they repeatedly assured him he would parachute into a job with much more power and prestige.

Galli has repeatedly declined to discuss his departure from Black & Decker, and he still speaks highly of the company.

Whatever happened, Bezos said, "It worked out well for us."

Black & Decker insiders describe Galli as a messianic marketer who worked long hours and enjoyed having close contact with customers. They said his vigor energized employees -- all the way down to secretaries and members of the firm's DeWalt power tool "swarm teams," who drive their trademark yellow-and-black trucks to stores such as Home Depot to demonstrate how well the products work. The DeWalt tool line, aimed at professionals such as carpenters, is Black & Decker's biggest success story, part of the $3.1 billion power tools and accessories business Galli ran.

The question now is whether Galli's marketing touch will transfer into cyberspace, where Amazon faces an array of competition from brick-and-mortar stores such as Wal-Mart Stores Inc. to other online commerce companies such as auctioneer eBay Inc. and bookseller barnesandnoble.com.

That's why it was crucial for Amazon to recruit a marketing guru for its top management team.

"It's a very good move in the sense that he has expertise in marketing and is an entrepreneurial type," said Eugene Fram, the J. Warren McClure marketing research professor at the Rochester Institute of Technology College of Business. "He's moving into an evolving organization, the future of which we don't know. But they have a lot of money, so they have the resources to do some [creative] things."

Both Galli and Bezos said the former Black & Decker executive's international experience will help Amazon as it continues its growth by expanding overseas.

Viewpoints on Amazon's prospects are diverse. Some believe it will become the Wal-Mart of the Internet, a one-stop place to shop for books, toys, music and many other products. But others see the stock -- which closed yesterday at $110.1875, down $3.4375 -- as greatly overpriced, given the competition it faces and the fact that it won't turn a profit this year or next.

Amazon's share price has fallen precipitously from an April 27 high of $221.25, but remains well above its 52-week low of $21.6719.

Some analysts are worried that the firm is changing its business model by investing heavily in warehouse and distribution centers -- making it vulnerable because its operating costs will be much higher than expected.

CEO Bezos said the investments will pay off: The facilities are much more than Amazon needs right now, but he expects the company to need the extra capacity as it grows.

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