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Technology Stocks : INFOSEEK (GO) -- Ignore unavailable to you. Want to Upgrade?

To: Sowbug who wrote (6621)	6/18/1998 9:15:00 AM
From: fred woodall	Respond to of 9343

WIRE: Walt Disney Co. is in talks with Infoseek Corp. about buying a stake in the Internet search and directory company, people familiar with the discussions said. Proposed terms could not be determined. But Disney is believed to be considering a minority position in Infoseek, shares of which have been rising lately on speculation about the potential interest of big media companies. A 10% stake in Infoseek, for example, would cost about $100 million at the company's current valuation. Disney officials did not return calls, and Infoseek executives declined to comment. But people familiar with Disney's thinking say its Internet group is considering using Infoseek, or some other major hub or "portal" site on the Web, to increase audience traffic at its existing sites. Disney's sites include ABCNEWS.com, affiliated with Disney's ABC Broadcasting unit, and ESPN SportsZone. Interest in the portal business accelerated last week when General Electric Co.'s's NBC division paid $32 million for a minority investment in Internet-media firm CNET Inc. and its Snap! directory service. NBC also has rights to buy up to 60% of Snap! for $32 million more. Snap had been considered a marginal player in the directory arena. Internet stocks also surged yesterday after a published report that America Online Inc. rebuffed a recent takeover bid by AT&T Corp., as speculation intensified about potential acquisitions of companies that include major portal sites. Shares of Yahoo! Inc., for example, rose $8.6875 to $130.625, while Excite Inc. stock rose $8.8125 to $76.125. Infoseek, which had already been the subject of deal rumors involving Time Warner Inc. earlier this week, rose $1.375 to $34.50. Time Warner this week denied it intended to buy Infoseek, which now has a market capitalization of about $1 billion. Internet portals are considered hot commodities because of the increasingly large volumes of user traffic flowing through them, traffic that has begun translating into advertising revenue and electronic-commerce transactions. The Web efforts of most media and communications companies, by contrast, have largely failed to match the audiences lured by the portal players. "NBC's investment in Snap last week made all the traditional media and communications players sit up and take notice," said Paul Noglows, an analyst at Hambrecht & Quist LLC in San Francisco. "It really forced them to reassess what their Internet strategy has been." Michael Eisner, Disney's chairman and chief executive officer, recently said the company plans to be an "aggressive competitor" on the Internet. People familiar with the matter say Disney has looked at all the major portal companies, but has been put off by their increasingly high valuations. Within Disney, these people said, there is a continuing debate about whether to build a portal or buy one, and a deal with Infoseek is far from assured. Infoseek's audience ranks considerably below that of other portal players, including Yahoo, Excite, Microsoft Corp. and AOL. David Simons, managing director of Digital Video Investments, a New York stock-research firm, said the Snap deal has inspired investors to ponder the fate of the other lesser-known contenders. "My sense is this is more something conjured by the imagination," Mr. Simons said of the Infoseek rumors. But other analysts said big media companies have concluded that they must act soon. "The question is, what properties are positioned to win," said one Infoseek executive earlier this month. "As these deals begin to shape up, we are almost like the last piece of beachfront property in California."