Thursday, June 18, 1998 Published at 15:53 GMT 16:53 UK
Business: The Company File
The Walt Disney Company has bought 43% of Infoseek, the Internet search engine and directory service.
The move will enable Disney's Buena Vista Internet Group to create a new "portal" or access site to the Internet, which ultimately could combine Disney's ABC News and ESPN sports with Infoseek's popular search engine.
This follows a general trend on the Internet market, where strong established media brands buy up successful Internet upstarts.
Such a new combined web site then provides users with a "one-stop" access to the Internet, providing all the information and functionality they might want.
Disney's new one-stop portal will be launched later this year, but the new expanded company will continue to operate under the name Infoseek.
Michael Eisner, Disney's chairman and CEO, said the agreement prepared "an even more ambitious role" for Disney on the Internet. Together with Infoseek the company would be "well-positioned to take advantage of the Internet as it evolves into commercial maturity."
Disney's Buena Vista Internet Group was formed in 1997 and includes ABC.com, Disney.com, the children online service Blast Online, and is a joint venture partner in ABC News.com and ESPN Internet Ventures.
Disney will acquire 43% of Infoseek shares in exchange for Disney's stake in Starwave, a top designer and operator of Web sites for other companies, plus $70m in cash.
At first Disney will have a minority role on Infoseek's board, but under certain circumstances and over time will be allowed to acquire a majority stake.
Disney will provide, and Infoseek has agreed to purchase, $165m worth of promotional support for the new portal service.
Disney's latest move is part of a carefully calculated strategy to position the company on the Internet. Disney acquired its stake in Starwave only recently from billionaire investor and Microsoft co-founder Paul Allen.
The New York stock market, however, was not quite convinced whether Disney's plans will work. After the announcement Infoseek's share price rose, while Disney shares took a hit.
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