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Disney may hook up Go with ISP

The Go Network is exploring its options to have members sign up for Go Network-branded Internet access service, an executive says.

Is the Go Network, Disney and Infoseek's portal site, looking to offer Net access?

It is exploring its options, according to Patrick Naughton, executive vice president of products at Infoseek, which operates the Go Network. Naughton said no deal is imminent but noted that giving Go Network members an option to sign up for Go Network-branded access service would be an appealing addition for the portal.

"We have our business development people out talking to various ISPs about how to do a branded ISP portion of our service," Naughton said. "It would just be a rebranded partnership with one or more existing ISPs."

In other words, the Go Network See news analysis: Will Disney's Go Network pay off? would partner with an ISP rather than buying and managing one. In return, the Go Network would market the service across Disney properties, driving potential subscribers to the ISP.

While Naughton declined to comment on the structure of these ISP deals, he said the objective is to drive new users to Go Network. But, he added, Go Network does not want to take a slice of the ISP partner's revenue.

For portals, controlling the dial-up access point is a way to offer users a more complete package of services. America Online, for example, boasts 17 million paying members.

Other Web companies also are looking into dial-up access. Excite@Home may need to consider adding dial-up as a separate offering to its current broadband cable modem service, sources said.

"What is happening is the closer you are to the consumer, the closer the relationship is," said Jim Preissler, an equity analyst at PaineWebber. "For a lot of these other players, unless they're very close to the desktop or the consumer, they could be literally cut out of the equation."

Portals have tried cobranded access before but were largely unsuccessful--at least in part because many of those deals were nonexclusive. For example, last year AT&T's WorldNet ISP unit struck deals with Yahoo, Infoseek, Excite, and Lycos--the last three of which were announced in a single week. Under those deals, users' start pages became cobranded portal-WorldNet pages.

While these deals potentially give portals a foothold toward reaching first-time users, many industry analysts and observers say they have proven to offer little benefit to either party.

Naughton said AT&T WorldNet is a remnant of a deal made before the Go Network's launch and has "no prominence" on the site today.

As for actually buying an ISP to offer access, portals thus far have shunned that idea. Yahoo executives, for example, have said that managing access is a high-cost, low-margin business that Yahoo does not want to enter. Yahoo president Jeff Mallett said in a previous interview that the company's brand and offerings will distinguish it from the rest of the pack.

Naughton's comments come a day after Disney said it is in talks to acquire the remaining stake in Infoseek. Last June, Disney acquired a 43 percent stake in the Web directory site. In return, Disney dealt ownership of Starwave to Infoseek to create the Go Network.

While the Go Network ranks high in terms of reach, it has stumbled out of the starting gate since it launched in January. Infoseek admitted that many of its existing advertisers waited in the sidelines until a clearer picture of the Go Network was formulated. In addition, revenue took a hit because of the company's decision to drop adult advertising.

Down the road, Infoseek plans to introduce more features to the Go Network in areas such as e-commerce, community, and content, Naughton said. Later this year the company plans to release a number of products on its site, including a home page builder, an instant messaging client, an auction service, and beefed-up content channels, according to Naughton.

Infoseek stock surged 13 percent today, or 5.63 points, to close at 48.625 in the aftermath of yesterday's announcement by Disney.