MediaSpan Group is getting bigger and richer, but it now will grow without its founder and chief executive.

The company, which provides online services to media firms, announced Tuesday that it has added a $4.5 million investment from its current venture capital backers and has acquired First MediaWorks of San Clemente, Calif., which specializes in providing online programs, database development and e-mail marketing to radio stations nationwide.

MediaSpan also said Chief Executive Steve Vetter, who helped launch the company two years ago, has stepped down to pursue other interests. Frank Campagnoni, the company’s chief technology officer since last July, has been named president and chief operating officer.

Campagnoni, who previously held management and engineering positions at General Electric, AT&T, IBM and Sun Microsystems, actually assumed his new position in February and says that the other changes have been in the works for some time as well. But the company chose to announce everything at one time rather than “dribble information out” over the course of several weeks, he says.

Vetter’s resignation comes on the heels of Chief Administrative Officer Sam Whitt’s departure. Whitt announced Monday that he was joining the Sanford Holshouser law firm in Raleigh and would become a partner in Southern Capitol Ventures.

Building from scratch

In April 2001, Vetter was hired as president of faltering, which sold software and built and managed Web sites for newspapers and other companies and groups around the country. A month after Vetter joined the company, it went into Chapter 11 bankruptcy, and he and KOZ’s venture firms bought the assets and joined it with parts of other failed dot-coms like NextAudio to create MediaSpan.

The company has gone on to acquire pieces of more successful operations such as Harris Publishing and Citadel Communications and has built a stable of more than 3,000 print and radio clients, which it assists with pre-press and community-based online content.

Vetter says he accomplished everything he set out to do when he assumed the helm of MediaSpan – establishing a strategic growth plan, arranging financing, forming a management team and achieving profitability – so it is a good time to move on to something else.

With a financial background and having managed a number of mergers and acquisitions, he is looking at opportunities to work for an investment bank or a private equity firm.

“My preference is to work with many companies instead of just one,” he says, adding that he plans to maintain his Greensboro residence. “I think I can do what I want to do without leaving the Triangle and Triad regions.”

Vetter still holds an equity stake in MediaSpan and says he will be available to the company as a consultant.

Radio, TV push

The addition of First MediaWorks will increase MediaSpan’s client roster by about 50 percent, including Infinity Radio, ABC Radio Networks, Entercom and the Armed Forces Radio Networks. The combination of the two radio operations, which will be based in California and headed by First MediaWorks Chief Executive Chad Meisinger, will provide MediaSpan with a larger scale to provide more services, Campagnoni says.

“In Internet services, scale is an important element,” he says. “Two smaller businesses can’t be as effective or profitable or provide the same level of service as one larger one.”

The deal also will push MediaSpan into the television market for the first time, Campagnoni says.

“We have aspirations of being a diversified media technology company,” he says. “We’re doing well in radio, have a nice footprint in publishing. … We have no imminent plans, but clearly TV is an area where we’ll look to expand in the future.”

New funding

Terms of the deal aren’t being disclosed, although Campagnoni says it involves a combination of MediaSpan stock and cash. Part of the latter comes from a new $4.5 million investment from Durham-based Southeast Interactive Technology Funds, Covesco-Seteura and Rustic Canyon Group.

The same group of venture firms put together an $8.5 million first round of financing for the company 15 months ago, and the latest infusion is being made on the same terms as that deal, according to Campagnoni.

No major changes in staff will occur at MediaSpan’s Durham headquarters following the integration of First MediaWorks, Campagnoni says. The company also plans no searches for executives to help him manage the company, he says, noting Rustic Canyon Managing Partner Tom Unterman will provide strategic assistance while serving as company chairman.

Whitt leaves:

MediaSpan Group:
First MediaWorks: