The Walt Disney Company seems to be eager to expand its web presence and just acquired the 57 percent of portal Infoseek Corp. that it doesn’t own to create a new Internet company called Go.com. Considering Disney’s usually rather traditional business practices such an aggressive expansion into the Internet is a bit surprising and could be an indication for the company’s attempt to diversify into new areas that they perceive lucrative in the future. According to the information Disney CEO Michael Eisner strongly believes people will watch movies over the Internet in the future and he wants to make sure Disney is ready, once the demand arises.
Infoseek shareholders will get stock in the new company, with each Infoseek share exchanged for 1.15 shares of Go.com. Other details of the deal, including the possible range of Go.com shares, were not disclosed.
Disney said it would combine its Internet holdings, which include Disney Store, ESPN.com and ABCNews.com, with Infoseek’s search engine and other Internet functions, such as electronic mail.
Infoseek and Disney jointly launched Go earlier this year as a new Internet portal to compete with Yahoo! Inc., America Online Inc. and Lycos Inc. . But several critics say they were slow to execute a clear strategy and hindered by answering to two different management teams.
Newly created Go.com, which would trade on the New York Stock Exchange, is expected to have about $350 million in revenues for the current fiscal year on a pro forma basis.
Please click here for a look at the entire press release via Infoseek.