Novell chief executive, finance chief leave company

Novell Inc. ousted its chief executive officer and finance chief after their plan to focus on selling Linux software failed to revive profit and sales growth. The shares rose as much as 14 percent, the most in almost three years.

President Ronald Hovsepian, 45, will take over from CEO Jack Messman effective immediately, Novell said today in a statement. Dana Russell, 44, was appointed interim CFO, replacing Joseph Tibbetts. Director Thomas Plaskett will become chairman.

Messman, 66, and Tibbetts, 53, struggled to transform the Waltham, Massachusetts-based company into a seller of Linux software that could rival Red Hat Inc. Novell, the No. 2 Linux provider, last month said profit may miss analyst estimates as sales trail expectations, disappointing investors for a second straight quarter. The shares slumped 15 percent the day after the May 31 announcement.

"It was overdue," said James Gilman, an analyst with Cross Research/Soleil Securities in New York. He rates the stock "hold" and said he doesn't own it. "For some reason Jack and Joe could not execute. This should have been done a while back."

Novell shares rose 62 cents to $6.62 at 1:30 p.m. in Nasdaq Stock Market composite trading. The shares rose as high as $6.84, the biggest gain since November 2003. The stock fell 32 percent this year before today.

Novell has failed to carve out a strategy for bolstering revenue growth after other businesses were overrun by Microsoft Corp. The struggle has led to turnover in the executive suite including the 2004 departure of Chris Stone, Messman's second-in- command and the force behind the company's Linux push.

Novell's NetWare was popular for departmental servers and file and print functions, one of the first areas where Microsoft's Windows NT succeeded in taking share. Novell shares hit a closing high of $43.06 on Feb. 17, 2000, the day Microsoft released the successor to Windows NT, Windows 2000, and the shares have been dropping ever since.

Novell's word processing ambitions were also derailed by Microsoft's Office suite. Novell, which went public in 1985, bought the WordPerfect word processor for $855 million in 1994. Less than two years later, with WordPerfect losing share to Microsoft's Word, Novell sold the program for $181.5 million.

The company moved into Linux software in an attempt to hold on to defecting NetWare customers.