Full Announcement
Infoseek Corporation
(NASDAQ:SEEK) today announced revenues for the third quarter of 1998 of
$19.2 million, a 129% increase over revenues of $8.4 million for the third
quarter of 1997. The Company reported a net loss for the third quarter of
1998 of $2.6 million, or $0.08 per share, compared to a net loss of
$5.0 million, or $0.19 per share, for the prior year quarter. For the
nine-month period, revenues were $50.7 million, a 126% increase compared to
revenues of $22.4 million for first nine months of 1997. Net loss for the
nine months was $5.7 million, or $0.19 per share, compared to a net loss of
$21.9 million, or $0.83 per share, for the comparable prior year period.
Results for the 1998 periods include $1.4 million of costs associated with the
pending integration of Infoseek, Starwave and its joint ventures. Results for
the nine-month period of 1997 included a $7.4 million restructuring charge
taken in the second quarter of 1997. Operating Highlights
"During this busy period where we are preparing to finalize our strategic
transaction with The Walt Disney Company (NYSE:DIS) and Starwave, we are
pleased to report a record third quarter. During the quarter we experienced
solid revenue growth which was driven primarily by the growth in the ad
revenue-supported Infoseek service," commented Harry Motro, president and CEO
of Infoseek. "We also signed several significant agreements that will
position Infoseek to better leverage our pending relationships with Starwave
and The Walt Disney Company. Deals with Microsoft and WebTV, as well as the
pending Quando acquisition, will all contribute to the expansion of the
Infoseek service, and ultimately the GO Network to be launched before the end
of 1998, pending completion of the company's transaction with Starwave and
The Walt Disney Company. Additionally, we added strong new channel partners
and sponsors, redesigned the site to enhance the experience of our users and
launched Express by Infoseek(TM), a free desktop search product that is
already being distributed by over 150 partners including USA Today and ZDNet."
Update on the Disney Alliance
Infoseek and Disney continued to move toward the completion of their
strategic alliance that was originally announced in June. The companies
announced their new Internet service would be named GO Network (www.GO.com).
GO Network(TM) will combine Infoseek's award-winning search and directory
technology with content and e-commerce from Disney, ABCNEWS.com and ESPN.com,
as well as leading Internet content publishers. Infoseek and Disney plan to
launch a preview version of the GO Network by the end of 1998. Disney
signaled its commitment to Infoseek and the GO Network by selecting three of
its senior executives (Robert Iger, president, ABC, Inc.; Steven Bornstein,
president, ESPN, Inc.; and Jake Winebaum, chairman, Buena Vista Internet
Group) for appointment to the Infoseek Board of Directors upon the closing of
the previously announced transaction among Infoseek, Starwave and Disney. The
shareholder meeting to approve the transaction has been set for
November 18, 1998. Traffic
Traffic on the core Infoseek search service, excluding chat traffic,
increased 17 percent in September 1998 compared to June 1998 and saw reduced
dependence on traffic purchased from Netscape. Traffic from lower-revenue
generating pages, namely chat pages, were down 9 percent from the month of
June 1998. In addition, pageviews sourced from Netscape declined slightly
from June 1998. In total, average daily pageviews increased from 20.3 million
per day in June 1998 to 21.4 million daily pageviews in September 1998.
During the month of September average daily pageviews from Starwave's joint
ventures with ESPN and ABCNEWS increased to 17 million pageviews per day from
12 million pageviews per day in June 1998. Quando, Inc.
Infoseek agreed to acquire Quando, Inc., a specialized e-commerce company
that provides consumers with high-value services, such as comparative shopping
and local content, that can help make users' lives easier. The integration of
Quando technologies into the Infoseek service will create opportunities to
extend Infoseek's reach and revenue by addressing the online shopping and
local events markets -- one of the 'sweet spots' of the e-commerce sector.
The acquisition is subject to the approval of Quando's shareholders and is
expected to close shortly following the proposed Starwave acquisition.
WebTV Networks, Inc.
Infoseek also announced an agreement with WebTV Networks, Inc.,
guaranteeing Infoseek more than four billion impressions as its exclusive
provider of search and directory services. WebTV Network, Inc.'s diverse
audience of Internet users will have access to Infoseek's advanced search and
directory services, and Infoseek will gain brand exposure in the Internet TV
appliance market. As part of the two-year agreement, Infoseek also will
assume management of advertising sales for WebTV, giving Infoseek the
opportunity to leverage its own sales force and have greater presence in the
marketplace. Microsoft
Infoseek was named as one of the premier search partners to provide search
and navigation on Microsoft's network of Internet products and services,
including Internet Explorer and MSN.com. This service launched in October
1998. Previously, the Company had announced that it would recognize certain
costs associated with this agreement upon launch of the service and the
remainder over the life of the agreement. The company now expects that it
will recognize the full amount of the contract, approximately $11 million, as
an expense on a ratable basis over the 12-month life of the agreement.
Express by Infoseek(TM) (www.express.infoseek.com)
Infoseek introduced Express by Infoseek; a free desktop product designed
to make each user's search experience easier and more effective. Fully
customizable, Express runs within the browser and works with multiple
information sources for a more comprehensive Web experience. By using the
resources of the desktop to provide features like background downloading,
random or sequential viewing of results, and term highlighting, Express speeds
up the entire search process. Additionally, with over one hundred categories,
such as top news, stock quotes, movie times, and weather, Express puts the
Web's most popular tools right at users' fingertips. Express can be
co-branded by partners, and the product is available for download at
express.infoseek.com and at over one hundred other sites, including
USA Today, IDG, The San Jose Mercury News, CMP, TV Guide, and the Weather
Channel. Channel and E-Commerce Partners
New channel and e-commerce partners include N2K's Music Boulevard,
OnHealth Network company, Vitamin Shoppe Industries Inc., HomeShark Inc., and
HouseNet Inc. Infoseek and SmartAge introduced "Infoseek Clicks" -- an
innovative partnership to bring the benefits of banner exchange and Internet
search to greater numbers of Web sites. "Infoseek Online Powered By AT&T
WorldNet(R) Service" was released in the quarter, offering Web surfers
reliable Internet access at a low introductory rate of $9.95 per month.
Additionally, Infoseek launched its "Communications Center" giving users
one-click access to AT&T's most advanced Web tools that let surfers transform
an online keyboard chat into a live conversation, initiate a conference call
from the Web, or automatically dial anyone in AT&T's AnyWho(SM) directory.
Ultraseek Software
Infoseek's Ultraseek Server Software Division continued to grow its roster
of 450 premier customers. Companies such as Hertz Corporation, First Chicago
NBD and the Massachusetts Institute of Technology selected the Ultraseek
server product in the third quarter for their Intranet and public web site
search applications. Licensing of the Infoseek Ultraseek Server software
accounted for approximately 11% of total revenue in the third quarter. |
