September 21, 1998 1:15 PM PDT
Infoseek, Disney plan portal
As previously reported by CNET News.com, Infoseek and Disney's Buena Vista Internet Group said they will launch the "Go Network," by the end of the year, backed by Disney's usual marketing muscle.
When the portal launches at the end of the year, the Infoseek-branded portal will be dissolved. Instead, Infoseek will only provide search and directory functions on the site, according to chief executive Harry Motro.
"We're going to have Infoseek as our search brand within Go the same way Yahoo had AltaVista within Yahoo," said Motro, referring to Yahoo's former relationship with the Compaq-owned portal, where AltaVista provided Web searches for queries that extended beyond Yahoo's edited directory. In May, the two companies discontinued their relationship, citing a conflict of interest after AltaVista beefed up its service to compete in the portal space.
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"Infoseek will continue [as a brand] just like ESPN will continue," he added.
"This alliance brings together an incredible combination of assets: great content, strong brands, superior technology, and tremendous marketing horsepower," Buena Vista Internet Group chairman Jake Winebaum said in a statement. "Go Network is an exciting new brand and product that we will put our collective resources behind."
Shares of Infoseek jumped 5.95 percent higher on news of the agreement. The stock was trading at 21.72 and has been as high as 45 and as low 6.25 as during the past 52 weeks.
Shares of Disney fell 2.44 percent on the news. The stock was trading at 24.94 and has been as high as 42.75 and as low as 23.88 during the past 52 weeks.
Infoseek has been in stiff competition with the likes of Yahoo, Excite, and America Online for visitor traffic and advertising dollars.
Infoseek has lagged behind these other Web portal giants in terms of traffic and visibility but hopes to change that status with Disney's investment in the company.
The portal was first discussed by the companies as part of a strategic transaction in which Infoseek would acquire Starwave, which is majority-owned by Disney. The deal also involved Disney acquiring additional shares of Infoseek common stock that would result in them having an approximately 43 percent stake in Infoseek. Disney would also purchase warrants from Infoseek enabling it, under certain circumstances, to achieve a majority stake in Infoseek over time.
Motro will remain president and chief executive of Infoseek. Under the terms of its agreement with Disney, Infoseek will oversee a number of properties including the Infoseek-branded search directory, the Go Network portal, and all Starwave properties, including ESPN, ABCNews.com (a News.com partner), and Mr. Showbiz, among others.
Motro added that Infoseek will report to an eight-member board of directors, which will include himself; Infoseek founder and chairman Steve Kirsch; John Zeisler, a partner with venture capital firm Interwest Ventures; Matt Stover, group president of information services at Bell Atlantic; and Bill Krause, a former chief executive of 3Com who currently heads scanner maker Storm Technology.
This transaction is subject to customary closing conditions, including shareholder approval.
Go Network will allow visitors to search the Web using Infoseek's search and directory technology. In addition, Go Network will provide immediate access to branded content on the Internet from Network partners such as Disney, ABCNews.com, and ESPN, among other Internet content providers.
