• by adam.m , Michael Deibert , August 9, 2005

Heidi Diamond, who had served as president of Martha Stewart Living Omnimedia (MSLO) since August 2002, announced that she was stepping down late Friday.

Diamond was credited with spearheading the company's partnership with NBC Universal and taking an active role in negotiations with Warner Home Video on a new line of company how-to DVD's to go on sale in October.

Under Diamond's watch, MSLO recently announced that it would be partnering with Discovery Communications to re-broadcast the company's new syndicated television series on The Learning Channel, which Discovery owns and operates, as well as a 13-part original home improvement series.

Although MSLO has also forged partnerships with Sirius Satellite Radio--which is set to broadcast a Martha-inspired channel--and Kmart Corporation, which is set to market a new line of furniture endorsed by the media personality, the company is widely held to be going through a rough patch since Stewart's release after serving five months in federal prison as a result of an obstruction-of-justice conviction in the ImClone Systems stock-trading scandal.

The credit rating agency Standard & Poor's recently downgraded the company's stock from sell to strong sell, citing an "unsustainably high" share price--around $28--"based on unrealistic investor expectations."