Disney and Infoseek Combine Forces on the Internet

Posted on June 18, 1998

The Walt Disney Company has reached an agreement to acquire a 43% stake in Infoseek Corporation in exchange for Disney's ownership position in Starwave plus $70 million in cash, it was announced by Michael D. Eisner, chairman and CEO of The Walt Disney Company, Harry Motro, president and CEO of Infoseek, and Jake Winebaum, chairman of Disney's Buena Vista Internet Group.

The transaction forms an Internet entity that combines the resources of Infoseek, Starwave and Disney. The new entity will bring together the branded assets of ABCNews.com and ESPN.com -- currently joint ventures between Starwave and Disney -- with one of the Internet's most popular search and directory services. In addition, Disney will commit to provide, and Infoseek will agree to purchase, $165 million in promotional support for the new portal service.

"This agreement stakes out an even more ambitious role for Disney in this promising medium and provides an ideal partnership for the creation of a new Internet portal service," said Eisner. "We have made great strides as a sports, news and entertainment programmer on the Internet over the past four years. Through our association with Infoseek, we are now well-positioned to take advantage of the Internet as it evolves into commercial maturity."

Infoseek and Disney, which currently have 14 million and nine million users respectively, plan to launch an advanced portal service later this year that will provide the best of Infoseek's and Disney's existing services. The portal service will feature, on a non-exclusive basis, ABC.com, ABCNews.com, Disney.com, Disney's Blast Online, ESPN.com, plus the official league sites of the NFL, NBA and NASCAR.