<ALERT> Go Network ready to go
Thursday December 3 5:19 PM ET
Go Network ready to go
By Matthew Broersma, ZDNet
Walt Disney Co. and Infoseek Corp. plan next week to launch a preview version of their consolidated Web site, Go Network, as first reported by ZDNN.
The venture is designed to combine the strengths of both brands in an assault on the market for Internet portals -- the multifeatured Web sites that grab up to 40 percent of all Web users. But industry analysts predict it'll be rough going.
"There's a lot of things to like about Go Network, like the sheer quality of the brands involved," said analyst Barry Parr with International Data Corp. "[But] the question is whether they can pull things together and do a decent job of integration. It'll be a group of sites that will have more traffic combined than they would have separately ... but I'm not sure it will be enough to lift Infoseek into a position to remain competitive."
In June, Disney (NYSE:DIS) agreed to acquire 43 percent of Infoseek (Nasdaq:SEEK) in exchange for its stake in interactive production company Starwave, plus $70 million in cash. That deal laid the foundations for Go, but since then, consolidation has raised the bar for success in the portal business.
AOL-Netscape merger
Most notably, the acquisition of Netscape Communications Corp. (Nasdaq:NSCP) by America Online Inc. (NYSE:AOL) brought together two of the largest portals -- AOL.com and Netcenter -- one of which is tied directly to Netscape's popular Navigator browser.
Disney's response is similar to that of Microsoft Corp. (Nasdaq:MSFT) with its Microsoft Network, or Lycos (Nasdaq:LCOS) with its Lycos Network: It plans to leverage the popularity of a group of diverse Web sites by gathering them into a loose "network."
The thinking is that users will be more likely to get what they want from other sites in the Go Network, increasing traffic all around, and making advertising more valuable.
Disney operates such sites as ESPN SportsZone and ABCNews.com, as well as such Disney-branded locations as Disney.com and Disney's Daily Blast.
Infoseek will add a search engine, one of the most popular applications online, to the mix.
Strategy 'makes sense'
Observers said the network strategy makes sense for Disney and Infoseek.
"They would like to see [themselves] on even competition with the Microsoft camp and the AOL/Netscape camp," said analyst Julia Pickar with Zona Research Inc. "Disney on its own might not have been able to do it, and Infoseek might not have been able to do it. But together they're less liable to fall to the competition."
Some analysts have speculated that Disney will try to brand Go as a family-friendly service as a way of differentiating itself from Netscape/AOL, Microsoft, and über-portal Yahoo! Inc. (Nasdaq:YHOO)
Niche danger
The danger of that strategy, however, is that the company could fall into a niche, forfeiting the mass market and the advertising dollars that come with it.
"The portal strategy is a mass-market strategy," said IDC's Parr. "It's all about reach. There is a market for [a family-friendly portal] but I'm not sure it's a killer market -- I'm not sure that would be sufficient."
See Also:
Starwave buy gives Disney more Web smarts
Infoseek is just part of Disney's online plans
Second look at Disney-Infoseek deal
This time, it's personal portal mania
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