Congrats on Disney's buyout of 43% of Infoseek.

I Find Karma (
Thu, 18 Jun 1998 23:37:36 -0700


Rohit and I met you at the poster session of WWW7 -- we were the ones
talking 'bout trust management. Well, when we picked up today's news,
we felts much happiness for you and Infoseek:

so we decided to share the news with 84 of the closest Friends (Foes?)
of Rohit Khare:

I guess rumors of Microsoft's buyout of Infoseek were greatly
exaggerated. Plus, the following must feel so good, given your
rivalry with Excite:

> "It came down to a matter of value," said International Data Corp.
> research analyst Paul Johnson. "An investment in Excite would have cost
> Disney an arm and a leg. Infoseek costs only an arm."

I'll have to ask Graham Spencer at Excite what he thinks. :)

As far as where you go from here... well, a searching/cataloguing engine
is much more powerful when bundled with content. It should be
interesting to see what happens from here... $70million in cash should
be a pretty helpful start...

> The goal is to create a compelling starting point, or "portal," for
> Internet explorers within a year, the companies said.

Portals, you say? Well, you'll want to deliver information one-on-one
instantly to subscriber lists tailored to the interests of individuals.
I'll bet you could use a nice general event notification architecture
that scales well to the Internet. Perhaps you'd like to attend WISEN:

Watching the consolidation of global media companies continue,
Adam (and Rohit)

> Disney Buys into Infoseek
> by Craig Bicknell and Dan Brekke
> 9:30am 18.Jun.98.PDT
> The long-awaited shopping spree just started.
> Disney (DIS) said it will buy a 43 percent stake in the search-engine
> company Infoseek (SEEK), in a US$770 million transaction that could
> bring more Internet visitors to its news, sports, and entertainment
> sites.
> At a stroke, the deal brings together one of the top Net search services
> -- Infoseek claims 14 million unique monthly visitors -- with the
> company that owns some of the most powerful broadcast media brands: ABC,
> ABC News, and ESPN, not to mention the Disney name itself. The goal is
> to create a compelling starting point, or "portal," for Internet
> explorers within a year, the companies said.
> The move by Disney comes after weeks of speculation that the company
> might buy one of the established Internet portals, like Infoseek or
> rival Excite (XCIT). Excite, the Number Two search engine, looked like
> the most likely target three weeks ago.
> "It came down to a matter of value," said International Data Corp.
> research analyst Paul Johnson. "An investment in Excite would have cost
> Disney an arm and a leg. Infoseek costs only an arm."
> In a complex swap of stock and services, Disney will acquire 25.8
> million shares of Infoseek stock, or a 43 percent stake. Disney will pay
> $70 million in cash for 2.6 million of those shares, and trade Starwave
> -- a producer of top-rated news, entertainment, and sports sites -- for
> the balance. It also will acquire warrants that allow it to buy a
> controlling interest in Infoseek over the next three years.
> Disney owns almost all of Starwave, with a small percentage belonging to
> individual investors. Infoseek also will issue another 3.1 million
> shares of stock to the independent Starwave shareholders. Additionally,
> Infoseek agreed to spend $165 million on promotional efforts with
> Disney.
> Executives of the three firms said that a brand new portal will be
> launched later this year and will be backed by a $50 million marketing
> blitz in 1999. The companies would not say what the new site would look
> like or what it would be called, though Disney's January registration of
> the domain name "" suggests a possible moniker.
> Jake Winebaum, chairman of Disney's Buena Vista Internet Group, said in
> a conference call that the deal "provides Infoseek with the rocket fuel
> to take it to the next level" in competition with powerful foes Yahoo
> and Excite.
> Infoseek chief Harry Motro said that for his company, the logic of the
> deal came down to the power of the brands it is combining. "There is
> only one Disney. There is only one ABC. There is only one ESPN," he
> said. "You simply won't find this combination of strengths in any other
> Web company."
> Some investors were not pleased with terms of the transaction. In
> exchange for just $70 million in cash and the divestiture of so-far
> unprofitable Starwave, Disney acquired some $770 million worth of
> Infoseek stock, based on Thursday closing stock prices.
> Disney's hand over of Starwave represented a hefty premium over the $250
> million Disney reportedly spent to buy the company in April.
> Infoseek shares initially surged on the news, but settled back as
> investors re-evaluated the deal. In early Nasdaq trading, its shares
> jumped as much as $7.50 to $42, but it closed at $35.12, just 62 cents
> above the previous day's close.
> Infoseek executives said they got a good deal.
> "In the end, no matter how the deal shakes out, no matter what the value
> is, there's one simple fact -- there's only one Disney," said Todd
> Friedman, Infoseek's investor relations spokesman. "You have to look at
> your prospects 10 years in the future. Disney guarantees that future."
> Analysts said Disney's purchase makes sense. Traditional media companies
> are interested in getting a big chunk of the $1 billion of advertising
> being spent on the Internet each year.
> "They're setting themselves up to be the TV network of tomorrow," said
> Vernon Keenan, an analyst with Zona Research.
> The Disney transaction came a day after reports that AT&T (T) attempted
> to buy America Online (AOL) for more than $19 billion. There is growing
> speculation that more portal acquisitions are in the offing.
> "We're in the middle of a feeding frenzy here," said Keenan.
> The recent spate of deals may also put pressure on the portals that have
> pledged to remain independent. Infoseek, with the backing of Disney, is
> vastly more threatening to leaders Yahoo (YHOO) and Excite, analysts
> said.
> "These portals need media partners," said Chris Charron, analyst at
> market researcher Forrester Research. "The scale of resources required
> to compete in the portal space is jumping up by orders of magnitude.
> These guys are going to need help."