Lycos chief scores "outrageous coup"

Although Lycos is being bought by Terra Networks--not the other way around--Davis winds up in the driver's seat of a $500 million-a-year Internet empire with about 50 million unique users in 37 countries.

Davis' rise is a case study in persistence. After the humbling experience of seeing one announced buyout slip away last year, today's $12.5 billion acquisition may be exactly the deal Davis has been waiting for.

"Here he was with a stock that ran up on Internet mania...only to be thrashed in the USA Networks deal," said one industry source who spoke on condition of anonymity. "For the guy to turn around and get $97 per share, it's an outrageous coup."

Davis not only married off Lycos to a major international presence, but the deal brings his personal fortunes closer to hand. In fiscal 1999, Davis was granted options to buy 1.925 million Lycos shares, according to a November filing with the Securities and Exchange Commission. These options immediately vest "in the event of a change in control of the company," the filing states.

Despite the promise of a big payday, Davis is not as flashy as some other Internet CEOs. Rather, those who know him say he's unpretentious, tough and determined to turn Lycos into a major force on the Internet. And it's this style that many who have worked and done business with him cite the most.

From January 1982 to January 1993, Davis worked at computer manufacturer Wang Laboratories in various sales and marketing positions. He later joined Cambex, a manufacturer of computer-related products, where he served as vice president of sales until he joined Lycos.

Davis serves on the boards of several local community organizations and on TheMan.com, which bills itself as a "lifestyle resource for socially active, time-constrained men."

He joined Lycos in 1995 as the company's first employee. Like many portals, Lycos started as a Web search and categorization site. Using technology developed by Carnegie Mellon University, and with Davis at the helm, Lycos rode the wave with other search engine notables such as Yahoo, Excite and Infoseek.

Co-workers describe him as a relentless builder, with a resilience that showed especially in the aftermath of the scuttled USA Networks deal. The two companies had publicly unveiled an $18 billion merger agreement in February 1999. But when Lycos shares dipped on the announcement, the deal ran into deadly resistance from David Wetherell, CEO of minority shareholder CMGI.

Since then, Davis has turned away from megadeals, instead acquiring a handful of smaller Web companies, such as Quote.com, Sonique and Gamesville. Lycos also has built its own new services, including a music site, an online multimedia site, and a free Internet service provider.

Although Lycos has been able to boost its services, one former employee said Davis never succeeded in creating a clear vision for the company. Rather, Davis drove deals without considering the bigger picture of where the company was headed, this person said, depleting management's morale and energy.

"There definitely has been a void within Lycos in setting a vision and direction of what the company will turn into," said this former employee, who spoke on condition of anonymity. "Bob has not been able to do that himself or recruit and retain people to develop that strategic vision."

Others say Davis has done a good job in building an Internet company with traffic numbers and a breadth of services rivaling those of top-tiered Web portals such as America Online and Yahoo.

Merging with Terra is "the next best thing after the failed USA Networks deal," said Emily Meehan, an analyst at the Yankee Group. "I would think they would've stayed as a U.S. powerhouse. This will make them instead a global powerhouse."