gotta read this--Mon Dec 28--By Steve Harmon
Senior Investment Analyst
Internet.com
"Where Wall Street Meets The Web"
First reader up writes:
"Go.com. Any comment on this Internet portal....the beta version looks good, the stock seems like a good buy, as you know it has gone through the $50 barrier. Any comments."
Reply: We think Infoseek (NASDAQ:SEEK - news) may be undergoing a radical transformation in its new endeavor with Disney. The $50 "barrier" refers to Disney's warrants to acquire more SEEK shares but that's what Disney has the right to pay but if you consider the value it brings to the shares that may imply a higher valuation to the public.
It's extremely difficult to quantify what the value of Disney's endorsement, marketing, alliance, partnering, branding, exposure and global presence could be to SEEK. These are intangible benefits of the deal.
When the Disney-Infoseek deal was first announced we believed strongly that SEEK could be tremendously undervalued, especially relative to its peers. SEEK was also one of our 1998 "stocks to watch" (see ISR, 12/31/97 in Archives). We believe the deal could have spelled out the value better to SEEK shareholders. The value of Starwave, for example, which Disney put in its interests in as part of the deal.
On the beta of "go.com" it looks a lot like every other content aggregator on the Web today so we are a little disappointed by the lack of a fresh approach from the powerful creative forces at Disney.
That said, this is a beta. The real value of the agreement between Disney-Infoseek probably won't emerge until after 12 months of them working together, after they apply some marketing muscle and combined brain power to the endeavor. Anytime Disney gets involved expectations run high. That works both for and against it.
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