Disney to take stake in Infoseek

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Walt Disney Co., Burbank, Calif., said it agreed to take a 43% stake in Internet portal site Infoseek Corp., Sunnyvale, Calif. In return, Infoseek acquires online entertainment company Starwave (producer of ESPN.com) from Disney and receives $70 million in cash. Disney also purchased warrants that enable it to potentially take a majority stake in Infoseek.

Disney agreed to spend $165 million to promote the portal site. Infoseek and Disney plan to launch a combined portal site later this year, which will feature ABC.com, ABCNews.com, Disney.com, Disney's Blast Online, ESPN.com and the official league sites of the National Football League, National Basketball Association and Nascar. Last week, NBC agreed to take an equity stake in Snap!, the portal site from CNET, San Francisco.

Jake Winebaum, chairman of Disney's Buena Vista Internet Group, said it choose Infoseek over competitors Excite, Yahoo! and Lycos for two major reasons: It was impressed with the people and Infoseek's roots as a technology company. "Infoseek is Disney's portal strategy," Mr. Winebaum said. "You'll see never-before-seen integration of content and search [capabilities] that's only possible with this type of alliance."

Copyright June 1998, Crain Communications Inc.

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