Infoseek Losses Blow Out to $53.0m Ahead of Disney Merger

Computergram International, Oct 29, 1999 by Rachel Chalmers

Infoseek Corp, the Sunnyvale, California-based internet portal which is about to become part of the Walt Disney Co, has reported revenues of $41.3m for the quarter ended October 2 1999, compared with $19.2m for the corresponding quarter last year. The company recorded an impressive $53.0m loss for this quarter, up from $2.6m this time last year. To deflect attention from this startling increase in spending, executives pointed to the growth in revenues and in the GO Network's user base, which reached 16 million over the quarter. Disney has appointed Steven Bornstein, chair of the Buena Vista Internet Group, to be CEO of go.com when the merger is completed. Judy Fearing will be his senior VP of marketing.

As they assume their new responsibilities, Bornstein and Fearing may ask themselves where the money went. One answer is, all over the place. Over the course of the quarter, Infoseek increased its branding and marketing efforts for the GO Network, running a TV campaign and an exhibit at the Walt Disney World Resort. The efforts to raise awareness seem to have paid off. ESPN's unique users reached 7.6 million in September, while ABCNews collected 3.2 million. An auction service was launched and users were given the opportunity to bid on Mark McGwire's bat, a basketball signed by Michael Jordan and signed sheet music to Led Zeppelin's Stairway to Heaven.

The more established sections of the network also received their share of attention. GO Money got a redesign and new content sources in the shape of the Motley Fool, CBS MarketWatch and TheStreet.com. Travelocity.com and Vacationspot.com signed up as partners for GO Travel. Ericsson agreed to test its wireless internet services using content from the GO Network. Four thousand volunteers signed up to be content providers for the community-based GO Guide. The company also built a meta search engine, GO Network Express Search, and integrated it with a machine translation engine, GO Translator.

In a bid to reinvent itself as a platform, not just another site, Infoseek announced several applications during the quarter. These include the already-mentioned auction service; GO Invite, a joint venture with Evite.com; GO Organizer, built in partnership with eCal.com and DayRunner; and GO Shopping, whose partners include Furniture,com, PetSmart.com, BizRate.com and Active Research. Infoseek's software division launched two new products: Ultraseek Server 3.1 and the Ultraseek 3.1 Content Classification Engine (CCE).

If this sounds like a business you'd want to invest in, you're in luck. When Infoseek merges with Disney to become go.com, a new class of Disney common stock will be issued under the ticker symbol GO. Stockholders are expected to vote to approve the transaction on November 17 1999. Go.com will get Club Blast, the Disney Store Online, Disney Travel Online, Family.com, ABC.com, Oscar.com and ABCSports.com from Disney, as well as Disney's ten- year joint ventures with Infoseek. The latter include ABCNews.com, Mr Showbiz, Wall of Sound, ESPN.com, NFL.com, NBA.com, WNBA.com, NASCAR.com and the ESPN Store Online.