Motley Fool: Bye, Bye, Infoseek

Sally Khudairi (
Mon, 12 Jul 1999 10:36:09 -0400

Bye, Bye, Infoseek

The inevitable has finally happened. This morning Walt
Disney Co. (NYSE: DIS)
announced it will acquire the shares in Infoseek (Nasdaq:
SEEK) it doesn't
already own and combine it with its Buena Vista Internet
Group to create a
single network called The combined entity will trade
under the stock
ticker "GO" on the New York Stock Exchange.

Disney, which announced its acquisition of 43% of Infoseek
almost exactly a
year ago, will contribute 52.5% of the assets of the new
company and get a
72% interest in after the merger. Infoseek
shareholders will receive
1.15 shares of for each Infoseek share. The deal is
expected to close
by the end of the year. Infoseek President and CEO Harry
Motro will stay on
through a "transition period" and then leave the company. He
called it "a
perfect opportunity for me to take some time off."

I guess this deal overrides last year's agreement, which
actually prohibited
Disney from acquiring more than a 49% stake in Infoseek for
three years. It
appears that independence isn't so glorious after all (see
the Fool's
StockTalk interviewlast year with Harry Motro), especially
when Infoseek's stock
has languished in the shadow of hot Internet stocks such as
rivals Yahoo!
(Nasdaq: YHOO) and Lycos (Nasdaq: LCOS). Infoseek shares
have risen just
60% or so over the past year compared with Yahoo!'s 244%
growth in that same period.

The combined Infoseek-Buena Vista Internet Group businesses
are expected to
generate roughly $350 million in revenues for the current
fiscal year. Of
that, about $200 million will be derived from the Internet,
with the rest
coming from the Disney Catalog. The catalog will support's e-commerce
growth by providing product sourcing, fulfillment, and
customer service

The Disney assets being contributed to include, Disney's
Club Blast, The Disney Store Online, Disney Travel Online,'s
international sites,,,, and
Additionally, Disney will throw in some Web properties still
development, including Family travel, Family shopping, and
Disney auctions.
Also part of will be current Disney-Infoseek joint
ventures, Mr. Showbiz, Wall of Sound,,,,,, and The ESPN Store Online.