Bill Ruckelshaus’s varied career as a consultant, PepsiCo executive and Silicon Valley investment banker prepared him well for the task of taking InfoSpace, a survivor of the dot-com bust, and reinventing it as Blucora, which now has a diverse portfolio of online companies with estimated 2013 revenues of $477 million, more than double its 2011 sales.
EARLY YEARS: I was born in the Midwest, one of five children. My mom and dad were from Indianapolis, Indiana. We moved to Washington, D.C. [where Bill’s father, William D. Ruckelshaus, was the first director of the U.S. Environmental Protection Agency under President Nixon]. After Watergate, we moved to Seattle and Dad took a job at Weyerhaeuser. He had once been stationed at Fort Lewis and remembered the Northwest fondly. I was then in seventh grade. I always tell people I grew up on the mean streets of Medina, Washington.
LESSONS: Our parents taught us to laugh and not take ourselves too seriously. Dad would say, “You shouldn’t worry too much about what other people are thinking about you because more often than not, they aren’t.” They also talked a lot about the importance of effort and of consulting your conscience to do the right thing.
CAREER: Out of college [Princeton], I worked at Booz Allen Hamilton in their environmental practice, helping corporations think of the environment actively and offensively instead of as a compliance exercise. I went back to business school [University of Virginia], then worked at PepsiCo’s Frito-Lay group in Texas. It was a very profitable and innovative group within the company with quality people. The group owned disparate businesses that were allowed to operate autonomously while also being held accountable to corporate objectives. Then I worked on mergers and acquisitions for Credit Suisse in Silicon Valley. It was the late 1990s, when the internet was just getting off the ground, and there was a technology explosion. I worked on a $30 billion transaction involving the merger of two large internet companies. That was a baptism by fire. The spreadsheet can tell you one thing, but if it’s a merger of two equals, it’s important for the two cultures to match up. They didn’t and the merger didn’t happen.
EXPEDIA: After the tech crash, I left banking and joined Expedia to run their acquisitions, business development and strategic planning. At the time, they were overtaking Travelocity in the market so it was a great entry-point operating role. It was a very successful internet company. They were evangelical about how the internet would transform people’s lives by offering a 10-times improvement in the user experience; they were great software developers with a product sensibility that kept customers at the center of what they were developing; and they were extremely competitive. They got something in their sights and wanted to chase it down. It was a winning combination and the same team appears to have landed on their feet at Zillow.
BLUCORA: Then I took a CFO position at a digital ad tech company called AudienceScience. While there, I joined the board of InfoSpace in 2007. They had recovered from the market correction in early 2000 and streamlined from 15 different businesses to three. Within five months of my being on the board, we divested two of the companies. We gave $400 million in cash to shareholders, which left us with $200 million in cash and a strategy to grow InfoSpace and complementary businesses. I stepped in as acting CEO in 2010, then full-time CEO in 2011. I was really interested in the job. I saw an opportunity around investing in businesses in a way that could be opportunistic or catalytic for the company.
THE STRATEGY: InfoSpace [now a Blucora subsidiary] is performing in online search. There are a finite number of key words that Yahoo and Google can bring to any advertiser that will be of quality. We act as a channel partner for them. We aggregate third-party publisher sites that have search boxes on them and it’s our search box. We bring more liquidity to the search engine marketplace and help [Google and Yahoo] bring more value to their advertisers. But as a channel partner on behalf of Google and Yahoo, our business is concentrated, so it makes sense to diversify.
DIVERSIFICATION: We acquired [Iowa-based] TaxACT in 2012 [for $287.5 million] and [Southern California-based] Monoprice in August this year [for $180 million]. TaxACT was a disruptive business in that it was the first to offer free federal tax preparation [online]. That was a breakout strategy that got them 5 million individual filers. This company managed to put forward a very compelling product, price it in a good way and still grow a profitable company. It’s hard to do all three things. Monoprice is about to do the same thing. They have a position in their market providing quality computer accessories and electronic components at fantastic prices and with good service. We also like their culture. There is an excitement and pride about what they are doing on behalf of consumers. We recognized that right away. And they are growing fast. While competitors sell through a traditional supply chain, whether physical or online, where there are a number of markups, Monoprice is sourcing directly and selling directly, so they are price competitive.
THE FUTURE: If we are successful, InfoSpace will be bigger and will have figured out how to bridge to mobile. TaxACT and Monoprice will be much bigger and their brands will be much more recognized. We can help with that by providing capital to invest over the long term. We will operate in a decentralized manner, giving the companies autonomy to run independently. They will have the motivation that comes from being independent and the benefit of having resources. They will also benefit from InfoSpace’s deep understanding of the online world. Those insights could result in more traffic to their sites. We might even feature Monoprice and TaxACT within InfoSpace.
—Interviewed and edited by Leslie Helm