The Outsider 93
board members also represented the clients, so Elon didn’t
have much influence regarding the company’s future di-
rection. “What they should have done is put me in charge,”
Elon said. “That’s OK, but great things will never happen
with VCs [venture capitalists] or professional managers.
They have high drive, but they don’t have the creativity
or the insight. Some do, but most don’t.”^71
In 1998, Zip2 began to discuss with the company City-
search if they could merge into a larger, more competitive
company. Citysearch was involved in the same business
area as Zip2. If the companies merged, they thought the
larger company could compete with Microsoft’s Sidewalk
- another similar service. Zip2’s board approved the merge
and published the deal in a press release. But the merge
never happened. Elon had talked with Charles Conn, who
was the CEO of Citysearch. While the original plan was
that Elon remained in the new company, Elon thought
Conn would force him to leave the company after the
merge. So Elon and his brother decided to say no to the
merger of the two companies.^263
The failed merger resulted in that Zip2 forced Elon to
give up his position as the chairman of the company and
Sorkin lost his job as CEO. Derek Proudian, who was the
first venture capitalist to invest in Zip2, took over as CEO.^71
In April 1999, Compaq bought Zip2 for $307 million in
cash. It was the largest sum up to that point ever paid for
an Internet company.^57 Elon made $22 million since he and
Kimbal owned about twelve percent of the company.^59 The
reason why Compaq bought Zip2 was that they wanted to