Disney eyes stake in Excite as part of bold Web strategy

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Walt Disney Co. is in talks to acquire up to a 40% stake in the Internet search company Excite Inc., said an executive familiar with the discussions.

The talks are part of a larger Web strategy being considered at Disney that would make virtually all the Disney-related Web sites available through an umbrella site, which could be called D Guide or Go Online.


The site would include ABCnews.com, ESPN SportsZone, Family.com, NBA.com, NFL.com and Mr. Showbiz, as well as the sites for A&E Networks and Lifetime Television, among others.

Disney owns all or part of those sites. It is also contemplating new sites, including one called PetsburghUSA.

"These sites could be accessed individually, but by aggregating them under one banner it could drive eyeballs and, hence, advertising," said the executive.

A deal with an established search engine such as Excite is considered a key traffic driver.

"Excite's been looking to hook up with a big media company," said the executive.


The company already has strategic relations with America Online, Netscape, Intuit, Prodigy and Tribune Co. Intuit and venture capital firm Kleiner Perkins Caufield & Byers are among Excite's largest shareholders.

An Excite spokeswoman said the company does not comment on "rumor or speculation."

Jake Winebaum, chairman of Disney's Buena Vista Internet Group, was traveling late last week and could not be reached.

"That discussion has been going on for a very long time," said another executive close to the companies. "It wouldn't surprise me at all if it's come to fruition."

Just last month, Disney closed its deal to acquire total ownership of online publisher Starwave Corp., in which it had purchased a one-third stake in April 1997 for a reported $100 million.


As part of its new-media strategy, Disney has been working for some time on what it calls "telefusion," a mandate from Chairman-CEO Michael Eisner to find a way to exploit Disney TV properties in the new-media arena and vice versa.

"The whole `telefusion' effort has stirred big debates on branding," said another executive close to the company. For example, a controversial plan to label "NFL Monday Night Football" on ABC under the ESPN moniker has been tabled for now "because the ABC affiliates won't go for it," said this executive.

Contributing: Pat Riedman.

Copyright June 1998, Crain Communications Inc.

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