Sarkisian/infoseek/6″/mike1st/mark2nd

No. 12

Disney Invests in Infoseek

The line between television and the Internet grew increasingly fuzzy last year as media companies bought into portal sites.

Among the most significant of those deals was Walt Disney Co.’s acquisition in June of a 43 percent stake in Infoseek Corp., in a stock-plus-cash transaction worth about $420 million.

This isn’t Disney’s first Internet acquisition. A couple of years earlier Disney bought Starwave Corp., a designer of such popular Web sites as ESPNet-SportsZone.com.

But the Infoseek deal takes Disney to a new level in its quest to bring fantasyland into cyberspace. Infoseek is a Web search engine and navigation service, which Web surfers can use to locate specific types of information on the Internet.

Analysts have hailed the deal, saying Disney’s media products will benefit from the added online presence on Infoseek, and that Infoseek will benefit from using Disney’s marketing clout to boost its online traffic. While Infoseek is one of the more popular portal services, it continues to lag such giants as Yahoo! and Excite.

But the new Disney-Infoseek partnership hasn’t wasted any time trying to change that. Just last month, it launched one of the largest new Web hubs, called the Go Network. Should that site catch on, as expected, Infoseek would eventually be phased out, industry officials predict.

In exchange for its stake in Infoseek, Disney gave the company its wholly owned Starwave operation, valued at $350 million, as well as $70 million in cash.

Nola L. Sarkisian