Critics say Jim Clark's vision lacks follow-through

In the current dot-com drought, it's easier to see the glass as half empty than half full.

So it goes for Jim Clark, the man credited with creating and walking away from a trio of billion-dollar companies: Silicon Graphics, Netscape Communications and now WebMD.

Clark's resignation from the WebMD board of directors earlier this month has thrown a spotlight on his reputation as a soothsayer with an uncanny ability to predict and bring into being the "new, new thing," to take a phrase from his now-famous biography.

While many analysts say the jury is still out on WebMD, Clark's sudden departure from his third major venture has led some to revisit his status as a divining rod. Others go further, noting that Clark's aura of genius has long been offset by his reputation as an impatient investor with little taste for the nuts and bolts of building a company for the long haul.

"What happened at WebMD? A guy took over who knew something about health care," said Efrem Sigel, an analyst at New Rochelle, N.Y.-based Corporate Research Group. "Clark had the right idea...but he wanted to create a company on the back of an envelope."

Added Prudential Volpe Technology Group analyst Sean Wieland: "Expectations got way ahead of themselves. (Clark is) a visionary guy, and he saw an opportunity. But he was a little naive in terms of the complexity and politics of health care."

Clark, 56, was unavailable to be interviewed or to respond to written questions for this article, according to his publicist. Despite analysts' concerns, he has faithful supporters who describe him as committed and insightful.

Clark has weathered criticism before, when Netscape sagged under relentless competition from Microsoft in the browser wars and eventually agreed to be bought by America Online. In his ghostwritten autobiography, "Netscape Time," he openly admits that many of the accusations are true.

In the book, he refers to his "deep-seated streak of impatience" and seat-of-the-pants attitude toward company-building.

"A lot of very smart entrepreneurs are quite rational about how they take chances; they think it through then work out contingency plans should things go wrong and they need a fallback position. I'm not good at that," he writes unapologetically. "My point of view has always been, Damn the torpedoes...It's a driven state, a mild form of insanity--or at the very least, a kind of selective dumbness."

The criticism has taken on new life in the stomach-wrenching slide in Internet stocks this year, which has scarred many investors--including Clark.

Critics point to the demise of teen Web site Kibu.com as evidence of the visionary's impatience.

Kibu was founded in 1999 and in February attracted a $22 million investment from Clark, former Excite@Home chairman Tom Jermoluk and venture capital firm Kleiner Perkins Caufield & Byers. The company shut down this month and returned money to Clark and other investors, citing the current market jitters.

For some, the incident underscored what Clark himself has described as his opportunistic nature and raised new questions about his status as a market visionary.

"People were working hard, and we thought we were well-informed of what was happening," said one former Kibu employee. "There was always talk of money, of keeping the runway cleared (for takeoff). Then we got the word on Monday that there might be layoffs or a closure, and it was all over in a week...It was a surprise."

Similar questions hang over Clark's departure from WebMD--the culmination of a stalled effort to turn the medical industry on its ear.

The venture started off in 1995 as Healtheon, created with the goal of using the Internet to ease supply chain and documentation bottlenecks in the $1.4 trillion U.S. health care industry--a figure repeated frequently in company promotions signaling the size of the potential prize.

"Everyone was excited about this company in the beginning because of Clark," said Troy Dayton, a health care analyst with Dresner RCM Global Investors in San Francisco. "Anything he touched turned to gold."

The honeymoon came to an end, however, when it became clear that Clark and his team had underestimated the challenges of revolutionizing the medical business.

"Clark learned he couldn't just use his network of contacts to strong-arm people into going his way," said Prudential Volpe's Wieland. "He got frustrated."

Armed with a hefty stock price, Healtheon went on a buying spree as it reached into all aspects of health care, providing medical information to consumers, linking doctors and patients, and creating hard-core business-to-business applications. The consumer side of the business took more prominence following the acquisition of health Web site WebMD, which led the company to change its name to Healtheon/WebMD (eventually shortened to WebMD) and to embark on an aggressive media strategy, including plans to create TV programming.

WebMD "wanted to be all things to all people," said Corporate Research Group's Sigel. "That's not the basis for a successful business strategy."

As the scale of the company's operations grew, Clark began to lose interest and influence, according to analysts.

"Jim Clark had no sway" at WebMD in the end, said Steven Halper, an analyst with Credit Suisse First Boston. "He was not at all involved in setting the company's direction."

Messy breakup
If Clark was growing less influential inside WebMD, he was not shy of using his name in an apparent bid to drum up investor excitement for the company, which began waning early this year.

On April 26, Clark told interviewer Charlie Rose at an Internet health panel in New York City that WebMD expected to bring in $1 billion in revenues and become profitable on a timeline faster than the company was prepared to officially announce. The incident sparked WebMD to issue a statement distancing itself from Clark's comments.

"The company does not endorse published comments by one of the company's directors at a recent conference suggesting that these milestones could be achieved significantly earlier than previously suggested by numerous published analysts' models," WebMD wrote in a May 5 press release. A company representative confirmed that Clark was the director in question.