Infoseek Sees Red Three Years Post-Merger
[October 26, 1998] Infoseek, reportedly the number three Internet search
engine, said in regulatory filings that it may not make any money for more
than three years after it integrates with Walt Disney Co.'s Starwave Corp.
Starwave runs the ABC News and the ESPN sports news Web sites.
In June, Disney agreed to buy 43 percent of Sunnyvale, CA-based Infoseek for
$70 million in cash and its 91 percent stake in Starwave. The companies plan
to launch an Internet directory called Go Network.
Bloomberg News reported that the filing also showed that Bellevue, WA-based
Starwave, started in 1993 by Microsoft Corp. co-founder Paul Allen, has lost a
total of $112.5 million on revenues of $25.8 million from 1995 to June 28,
1998. During the same period, Infoseek lost $43.1 million on revenues of $82.1
million.
In a filing related to the transaction with Disney, Infoseek stated,
"Management currently estimates that the combined companies would not achieve
profitability until at least 2002 and, excluding the amortization of goodwill
and other intangibles associated with the Starwave merger, until at least
2000."
The filing also revealed the financial results of Starwave's top two Web
sites, designed for ABCNews and ESPN. The ABC site lost $21.5 million on
revenues of $9.1 million between April 1, 1997 and June 28, 1998. Revenue
included $3.79 million from advertising and $5.31 million from royalties.
Over the same period, the ESPN site lost $7.23 million on revenues of $21.5
million. Revenue included $15.3 million from ads, $5.63 million from
subscriptions and $656,000 from merchandise sales.
Infoseek shareholders will vote on the Starwave merger on Nov. 18 at the
company's annual meeting.
Last modified: Monday, 26-Oct-1998 09:16:48 EST |
