The Walt Disney Co. will scale back its Go.com Web site, shedding 400 jobs and folding its money-losing Disney Internet Group back into the company.
The group will operate under the same management as a Disney division overseeing such Web sites as Disney.com and ESPN.com.
Disney said it will continue to operate a streamlined Go.com site while it moves various services and registered users to its other sites. The company said it is also looking at selling some of its assets, including the Infoseek search engine it bought in 1998.
Disney officials said the decision came after it became clear that Go.com would never become an industry leader and the separate stock would provide neither money for investment or acquisition nor serve as a tool to retain employees.
In December, Go.com ranked fourth among Internet portals, behind Yahoo, MSN and AOL, according to Media Metrix.
The tracking stock for DIG will be converted into 0.19 of a share of Disney common stock as of March 20. The management of the Internet Group will continue to run Disney's separate Web properties.
Disney announced its entrance into the Internet business in 1998, when it acquired Infoseek and said it would construct its own Web service to compete with Yahoo Inc. and America Online Inc. In January 2000, Disney backed off its plans and said it would focus its Go.com site on entertainment and leisure as a way of separating itself from competitors. The Go.com site relaunched in September with a new design that more prominently featured Disney's individual Web sites.
The Internet Group faced widening losses. On a pro forma basis, as if the complete acquisition of Infoseek and formation of the Disney Internet Group had occurred at the beginning of 1999, the group lost $396 million in fiscal year 2000, compared with a loss of $208 million in fiscal year 1999.More Cuts for Icebox
Internet entertainment site Icebox.com laid off 11 employees, reducing its workforce to 30 as the company's funding is running short.
The layoffs of production and marketing workers followed a round of cuts in November that eliminated 50 positions.
Santa Monica-based Icebox, whose site features animated shorts, is attempting to raise $10 million in new financing. An official for Icebox, which is backed by online business incubator eCompanies, said its funding was expected to run out by the end of January.
Meanwhile, fellow Internet companies Z.com and Hollywood.com also reportedly initiated a new round of local layoffs.
It was unclear how many employees remained at Z.com where, in October, 50 workers were let go, half its staff at the time. The company's major backers include Internet incubator Idealab, Basic Entertainment, 3 Arts Entertainment, producer Jerry Bruckheimer and Maverick Records partner Guy Oseary.
Hollywood.com is cutting its crew by more than 50 percent. Officials said eight of 15 staffers in the Santa Monica office were laid off. The employees that remain in Los Angeles are mostly editorial staffers.
Company officials said parent Hollywood Media Corp. is continuing to move the focus of its operations to Boca Raton, Fla., and New York.Hermosa Drilling Ban Upheld
The California Court of Appeal ruled that Hermosa Beach may ban ocean-tapping wells within city limits.
The court overturned a 1998 trial court decision that the city had breached a contract with Santa Monica-based Macpherson Oil Co. that allowed it to sink slant wells a few blocks from the beach to tap undersea oil pockets.
Had Macpherson been allowed to go forward, it would have been the first slant oil drilling project in the bay since the 1950s, environmentalists said.
In sending the case back to the lower court, the appeals court did not address whether the city can be held liable for damages to Macpherson. The company is seeking restitution for losses it estimates at more than $100 million.
In 1986, the city and Macpherson signed a lease calling for nearly three dozen wells at the city's maintenance yard, several blocks from the beach. Company officials estimated the firm could extract as much as 30 million barrels of oil, generating $12 million annually for about 25 years.
After a lengthy permit process, Macpherson won approval from the California Coastal Commission. But a coalition calling itself Hermosa Beach Stop Oil battled the project on political and legal fronts. In 1995, the group convinced voters to approve a new oil-drilling ban in the city. The coalition also repeatedly sued the city over the lease, and in 1998 the City Council killed the project.Puck shutting Spago Hollywood
Spago Hollywood, celebrity chef Wolfgang Puck's onetime gathering place for entertainment industry powerbrokers, will close its doors March 31.
Puck, famous for his California Cuisine creations and his celebrity drawing power, opened the 180-seat restaurant in 1982 on the Sunset Strip.
After nearly two decades during which Spago became one of America's most famous restaurants, Puck and partner Barbara Lazaroff decided to close the restaurant when its lease expires. By Hollywood standards, Spago had a long run of success. Lately, however, it had become more of a tourist hangout than a celebrity haunt, with Puck's Spago Beverly Hills drawing the in crowd.
Puck's empire now includes 42 restaurant locations, a successful soup line, frozen food business, branded cookware and cutlery and a TV program on the Food Network. He also cut a deal in January estimated at $20 million that will allow ConAgra Foods, the nation's second-largest food company, to put his name on frozen entrees, side dishes and pizzas.GotByte.com Completes Sale
Latin America Online Inc. completed its acquisition of e-commerce enterprise GotByte.com and its related operations. GotByte.com, a privately owned e-commerce portal, has operations in Torrance.
The two companies had been negotiating since early December and agreed to terms earlier this month. Terms were not disclosed, but the acquisition was in exchange for stock in LAOL, a private company.
LAOL's current holdings include LatinaTeen.com, an Internet portal for teenaged Hispanic girls; Xumbido.com, an Internet entertainment Web site offering Spanish-language music; and Microsystemas, a branded PC designed for and marketed to Latinos.EToys Gets Breather
A group of creditors owed about $100 million by eToys Inc. extended a deadline to refrain from pressing claims against the troubled Internet toy seller while it seeks a buyer or investor to prop up the company.
The creditors group, which includes such names as toy makers Mattel Inc., Hasbro Inc. and Lego Group, had set a deadline of Jan. 31, but extended that until Feb. 15, according to an attorney who represents the group.
EToys owes creditors about $200 million, nearly half of which is owed to members of the informal creditors group. EToys previously reported that fourth-quarter sales had fallen well short of its earlier forecasts, and said it has only enough cash to stay in business through the end of March.Guess Restates Earnings
Shares of Los Angeles-based Guess Inc. fell 10 percent after the clothing designer and retailer said it lost money in the fourth quarter ended Dec. 31 and restated its earnings for the first three quarters of last year.
Because of a failure to properly account for some merchandise when the company moved its distribution facilities from Los Angeles to Kentucky, among other reasons, the company has restated its performance for the first three quarters of last year.
As of last week, the company's stock had lost about 65 percent of its value since Sept. 25, after Guess lowered its third-quarter profit forecast and said fourth-quarter results may also miss estimates.
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