Should the deal go through, Disney will acquire 100 percent of Infoseek and combine its Internet businesses under a tracking stock for its Web portal, Go.com. Infoseek shareholders will receive 1.15 shares of Go.com stock for each share of Infoseek common stock.
Disney acquired a 43 percent stake in Infoseek last summer in a complex deal to jump-start its Web strategy. The new company will include Disney-owned Web sites such as Disney Online, ESPN.com, ABCNews.com, Family.com, and Mr. Showbiz.com, as well as Disney's catalog of products and gifts.
The Infoseek deal was Disney's stepping stone into the Web portal game--an attempt to take a slice of a market dominated by Yahoo, America Online, Lycos, and Excite. The culmination of Disney's investment was the January launch of the Go Network, a portal that combined Disney's Web brands with Infoseek's search technology.
But Go left the starting line slower than expected and also has hit a few roadblocks since its inception. The site faces a lawsuit from search engine GoTo.com for allegedly designing a logo that creates confusion with GoTo's logo. And in attempting to maintain its family-friendly image, the site's decision to discontinue accepting pornography advertisements meant an initial hit to its revenue line.
More recently, Disney suffered a public relations nightmare when Infoseek senior vice president Patrick Naughton was arrested and charged by the FBI for allegedly trying to solicit sex from a 13-year-old girl.