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The BBC's Mark Gregory
"The site was never a hit with internet users"
 real 28k

Tuesday, 30 January, 2001, 11:24 GMT
Disney's internet division closed
Michael Eisner, chairman and chief executive, Disney
Michael Eisner: "Internet still a central focus for Disney"
The hangover from last year's internet boom claimed another victim as Walt Disney revealed it is to close its Go.com internet division.

The Walt Disney Company (WDC) announced it is to cut 400 jobs and axe its Go leisure portal following concerns about the operation's ability to reach profitability.

The firm was one of the first media giants to embrace the web.

But the Disney Internet Group, which has its own stock exchange listing, has lost money ever since its launch two years ago.

Reports said the sites have failed to attract the advertising revenues forecast, and lost $395m last year.

Hopes dashed

The closure further undermines expectations that the internet will grow into a cash cow, hopes which drove shares in new economy firms to startling highs last spring.

Disney Internet Group was last month ranked as the eight largest web "property", with 20 million individual visitors, researchers said.

CNN, News Corporation, the New York Times and the UK's Daily Express are among other organisations which have cut back internet operations in recent weeks.

Under the closure plans, Disney Internet Group will be reabsorbed into the parent company, and will continue to publish sites including ESPN.com, Disney.com and ABCnews.com.

"The internet continues to be a central focus of our company's business strategy," Michael Eisner, WDC's chairman and chief executive officer, said in a statement.

Wall Street analysts on Monday forecast the revamped internet arm could reach breakeven within three years.

Weak link

Go.com is thought to have been one of slowest growing sites in the Disney porfolio, expanding by less than 20%, in terms of page views, over the last 18 months.

ABCnews.com and ESPN have grown by 50-75%, Charlene Li an analyst at Forrester Research, said.

"Go.com had quite a few problems in the past year trying to carve out an identify for itself," she said. "It's hard to make something like this make money."

In New York, shares in Disney closed a fraction over one dollar higher at $30.82.

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