By T.R. REID and BRIT HUME

Infoseek is a 4-year-old start-up company with fewer than 200 employees and annual sales around $35 million. It has never made a profit. Not exactly the kind of outfit you would expect to be worth $1 billion.

But the corporate wizards at mighty Walt Disney Co. agreed to buy a 43 percent interest in Infoseek for an astronomical amount. The New York Times estimates the purchase price at $900 million; other estimates are lower, but still astronomical. As soon as this was announced, Wall Street analysts praised Disney for a brilliant strategic move.

Why does it make sense to shell out hundreds of millions for a minority share in a money-losing company? Presumably it's because Infoseek is a significant player in one of the hottest areas of the Internet business. It is a "portal."

A "portal" is the kind of Internet site that used to be known as a "search engine." Other well-known portals are Yahoo!, Lycos, AltaVista, etc. These outfits started out fairly modestly, serving as electronic card catalogs to the endless body of information on the Internet.

The "portals" still provide the search function. But today, these sites are much more ambitious. They want to serve as your front door, or portal, to the Internet that is, the first screen you go to when you click on your Web browser to start surfing. To win our portal patronage, the sites are offering all sorts of useful, personalized goodies.

They'll tell you the latest price of all the stocks in your portfolio. They'll post the latest scores of your favorite baseball or football team, or the latest result from Wimbledon if you want. They'll give you the latest news stories on the topics you want to read about. They provide one-click access to your preferred e-mail services, newspaper, and local weather report.

The services are so carefully targeted nowadays that Yahoo! lets you enter your own zip code and then puts together a collection of Web sites of local interest to you. The goal is to design a library, address book and newspaper edited precisely to fit your interests.

In addition to the expanding "search engine" sites, there are several new sites that were created from the ground up as portals. The most useful one we've found so far is a spot called OnlineSpy.com. In addition to news, weather, etc., it offers one-click access to a dictionary, an encyclopedia, a Web search engine, an e-mail directory, a map-builder, a photo archive, a movie encyclopedia, and collections of song melodies and lyrics.

Naturally, both Microsoft (start.com) and Netscape (netcenter.com) have their own portals. We installed a new copy of Netscape's browser, Communicator, the other day and noticed that it is preprogrammed to take users automatically to the Netscape portal site. Are you listening, Justice Department? This seems suspiciously similar to the "captive audience" practices that Netscape screams about when Microsoft uses them.

Most of the major Internet service providers, such as America Online and Netcom, also offer their own portal sites. And most of them are you listening, Justice Department? are programmed to take their customers directly to their own portal at sign-on.

Of course, you are not stuck with the portal site that your browser or your ISP leads you to. To change the portal in Communicator, you click on the "Options" menu; under "General Preferences," type in your preferred portal in the box marked "Browser starts with:". In Explorer, you first go to your preferred portal page; then click on "View" and "Options" and check the box marked "Use current."

No matter which portal you go to when you first sign on to the Net, there's one excellent feature they all have in common: They're free. They don't charge any access fee. Their game plan is to get so many "hits" each day that they can charge the highest advertising rates on the Internet. This system seems to be working.

Netscape reported recently that one advertiser is paying $70 million in return for a top listing on the Netcenter portal. That's more than it would cost to buy a full-page ad in The New York Times every day for two years.

When you consider advertising fees of that size, it's less surprising that Disney would offer such a huge sum for little Infoseek.

T.R. Reid is London bureau chief of the Washington Post. Brit Hume is managing editor of Fox News in Washington. You can reach them in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200, or you can e-mail T.R. Reid at trreid@twp.com and Brit Hume at 72737.357@compuserve.com.

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