Disney Acquires Remaining 57% of Infoseek

Computergram International, July 13, 1999

As expected, The Walt Disney Co has decided to merge its Buena Vista Internet Group (BVIG) with Infoseek Corp to create a single internet business called Go.com. The partners say that forming a single company will allow them to integrate management and eliminate operational redundancies, so lay-offs appear likely. A new class of common stock will be issued to track the performance of the combined enterprise. The stock will be traded on the New York Stock Exchange under the ticker symbol GO.

Disney's Michael Eisner and Infoseek's Harry Motro announced the deal after the companies' respective boards of directors unanimously approved the transaction. Infoseek shareholders will get 1.15 shares in Go.com for each of their Infoseek shares. Disney, which already owns 42% of Infoseek and is contributing 52.5% of the assets to Go.com, will own about 72% of the new company. The deal is expected to close by the end of calendar 1999.

Executives claim the combined businesses will generate $350m in revenues for the current fiscal year. Of this, $200m represents internet-related revenue. The balance comes from the Disney Catalog, which clearly has room to grow online and which Go.com gets to keep. Disney will contribute content, in the form of the Disney Store Online, Disney Travel Online, Family.com, ABC.com. Oscar.com and ABCSports.com.

Go.com will also inherit the existing ten-year joint ventures between Disney and Infoseek for ABCNews.com, Mr Showbiz, Wall of Sound and ESPN Internet Ventures. Each of these joint ventures will be extended to 99 years. Disney also promises to promote Go.com through its TV, radio, theme part and resort properties.

Disney CFO Thomas Staggs, credited with being a chief architect of his company's web strategy, explains: "Disney's internet business, like the internet itself, is only beginning to realize its potential. Combining the businesses under Go.com should enable us to move the business more nimbly and effectively." Staggs will lead an executive team to manage the transaction until it closes. Motro will continue as Infoseek president and CEO until the deal closes, at which point he says he intends to take some time off.