COMMENTARY -- Terra Lycos (Nasdaq: TRLY) former CEO Robert Davis had to step down to get any respect from Wall Street and Silicon Valley. It's ironic how you don't appreciate good CEOs until they split.
As you might recall, Davis was the first employee of Lycos. He built it from the ground up to be one of the top five Web powers. On Wednesday, Davis turned into something called a "non executive chairman" and handed the keys of Terra Lycos to Executive Chairman Joaquim Agut. Davis was supposed to run the newly merged Terra Lycos and create a global powerhouse. Instead, he shared power with Agut.
But two-headed CEOs never really work out. So Davis now becomes a venture capitalist and a strategy consultant. And he finally gets a little appreciation on the way out.
As CEO, Davis wasn't flashy. And he didn't come from that dot-com CEO training academy where a tan and a lame business model made you a genius in 1999. Davis was just a stand-up guy that built Lycos and delivered a lot of upside earnings surprises.
Investors and the press really didn't appreciate underdog Lycos or Davis all that much. My theory is that there was a bias against a portal based in Waltham, Mass., far away from hip Silicon Valley. How dare Lycos create a Web giant on the East Coast. Meanwhile, many of Lycos' moves -- building a network and combining content and commerce -- were panned as silly.
In fact, Lycos really didn't get any attention until its failed merger with USA Networks (Nasdaq: USAI) and the infamous spat with CMGI (Nasdaq: CMGI). In many accounts of the merger fiasco, Davis was portrayed as a CEO outgunned by USA Networks chief Barry Diller.
All that changed in recent weeks. As word of Davis' departure leaked out, suddenly Wall Street and the press started viewing him as the linchpin to the company. How would Terra Lycos survive without Davis? In just a few days, everyone seemed to realize Davis has always been ahead of the game.
Sounds kinda familiar doesn't it? Davis and his USA merger attempt greased the skids for AOL Time Warner and the Primedia-About.com combination.
But at the time, investors hated it. CMGI, the Internet incubator that made its name with an investment in Lycos, panned the deal. CMGI honcho David Wetherell said USA was getting Lycos on the cheap. The USA-Lycos deal didn't add up under Internet math. Where's Wetherell and his Internet math now? The amazing thing is that Lycos kept its focus during this ongoing soap opera.
Now Davis leaves those headaches behind. It's Agut's turn to fight an uphill battle to win over Wall Street. Many analysts sounded perplexed Thursday about how Terra Lycos will be run with its two top execs based in Madrid.
Will Terra Lycos lose its U.S. employees? How will the media business survive? It's bad enough to have an Internet giant based in Massachusetts, but Madrid?
It's all a bit myopic. Terra Lycos is a global company with a huge partnership with European media giant Bertelsmann and $2.4 billion in cash, but the peanut gallery can't get over the fact the company isn't based in the U.S. The bias against Terra Lycos' new management was clear even before Davis cleaned out his desk. It's no surprise that Agut sounded agitated by all the questions about his aptitude to run the company without Davis.
"This machine will be working in a perfect way," said Agut.
We hope you're right Mr. Agut -- just don't plan on getting any respect for your efforts.TDAIN
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