The second coming of Infoseek?
The search engine, which Walt Disney acquired and refurbished into its ill-fated Go.com Web portal, may not be dead after all.
A group of 25 former employees of Go.com is trying to acquire the rights and technology behind Infoseek, according to one member. The group wants to revive Infoseek and bring it back to its roots as a Web search pioneer--without Disney's help.
"We were doing the numbers, and we knew it would be a profitable enterprise if we focused on search," said Bernt Wahl, a former senior manager at Go.com. "The Infoseek brand name is still well known on the Internet. If we can re-create that, we think we have a niche market."
Should the deal go through, the group would obtain the rights to the Infoseek brand name, its www.infoseek.com URL, and some of its servers.
The acquisition attempt comes after Disney quietly revamped Go.com and replaced its Infoseek search feature with pay-for-placement search engine GoTo.com. Disney also reduced its staff by 400 employees in January. At the time, the entertainment giant said it would shut down Go.com to take itself out of the portal race largely dominated by Yahoo, Microsoft's MSN and AOL Time Warner's America Online.
Wahl, who was laid off in January, would not disclose how much Disney has asked for Infoseek, but he hinted it would be much less than the company paid. In 1998, Disney spent $70 million for a 43 percent stake in Infoseek, which was a publicly traded company. By the time it shut Go.com's doors, the company incurred a $790 million write-off for the depreciation of its intangible assets related to the portal.
Disney created Go.com as a gateway to its content sites, such as ABCNews.com, ESPN.com and Disney.com. The effort was also an attempt to tap into the high-priced stock valuations that many portals such as Yahoo enjoyed two years ago.
But reality hit hard when Internet stocks began plummeting. The start-ups that had advertised heavily online began folding as venture capital dried up. Portals lost their main source of revenue, and traditional advertisers became tentative about stepping in and spending their marketing dollars on the Web.
Creating a business around Internet searches continues to be a risky proposition, but not as risky as creating a Web portal. AltaVista tried to become a full-fledged portal through hundreds of millions of promotional dollars from majority owner CMGI. But the economics of the portal business, hindered by shrinking advertising dollars, forced AltaVista to retrench as a search company.
Wahl hopes to take a different route. He said he and his associates believe that keeping a core team to run the site would reduce the company's overhead. Wahl said he plans to rely on advertising as well, but in a targeted fashion modeled after the Yellow Pages. He declined to elaborate.
The group said it has already raised between $5 million and $10 million of its own money as well as cash from domestic and international investors. It hopes to raise an additional round of $5 million in the coming week and is actively seeking investors.
"We're not trying to get into Yahoo's face," Wahl said. "We want to be the good guys in the Internet space, and because we don't have this huge overhead, we think we could guide it to what consumers really want."
A Disney representative said the company could not confirm or deny whether it was in talks with the group over the sale of Infoseek.
"We are continuing to look at buyers of our assets at Go.com," the representative said.