News from tonight's "Internet Stock News":
SITE PREVIEW OF DISNEY/INFOSEEK'S GO NETWORK-DOES IT
LIVE UP TO ITS HYPE?
By Chirag Amin, M.D.
Go Network, Disney's new internet portal, released its preliminary beta version of its portal site yesterday (12/12/98), with tentative plans to launch its official site in mid-January 1999. Go Network, which is owned by Infoseek (Nasdaq: SEEK, recent price 43 7/8), a company which is 43% owned by Disney, is an “all-in-one” internet portal which provides news, sports, weather, entertainment, and commerce sites, as well as numerous other links and services to its users. Although Disney already has a significant web presence, with affiliations to greater than 300 web sites (eg. espn.com and abcnews.com), Go Network was designed by Disney/Infoseek to establish a dominant internet presence, and looks to compete against internet portal giants such as AOL and Yahoo!
THE HYPE:
Recently, with the imminent launch of the beta Go Network (http://beta.go.com), there has been a lot of hype generated by various media sources. On December 7, the story was featured on CNBC's Business Center, with the CEO of Infoseek, Harry Motro, stating numerous positive comments regarding the prospects of Go Network. CNBC went on to say that “…[Go Network] could be the #1 website in the world.” Infoseek's stock reacted extremely well as a result, jumping approximately 9 points (about 25%) the following day. Infoseek (Nasdaq: SEEK, recent price 43 7/8), which had been trading in the mid 20s to low 30s for the past 3 months, hit a 52 week high of 49 last week, trading at over three times its average volume (more than 40 million shares traded over the past week). Although Infoseek is already up over 400% year to date, the stock has underperformed relative to its fellow search engine competitors Excite (Nasdaq: XCIT) and Lycos (Nasdaq: LCOS), which have both announced 2:1 stock splits earlier this year. In addition, today (Dec. 13), The New York Times also wrote a detailed article about the release of the beta version of Go Network which was very optimistic. Furthermore, there has been numerous favorable comments made on the Infoseek stock message boards on the Yahoo! Finance site with regards to the release of Go Networks beta version, with over 550 new posts (and counting!) since the launch of the beta version of the site on Dec. 12. All of this hype will most likely contribute to a gap up in the opening price of Infoseek's stock on Monday, despite the passage of four articles of impeachment against Bill Clinton.
THE POWER:
Although the question remains whether Go Network can effectively compete against giants such as AOL and Yahoo!, many experts believe that with Disney's advertising and marketing muscle, Go Network can pose a serious threat against these competing internet portal giants. Disney's CEO Micheal Eisner has been personally overseeing the whole project from its inception, and is planning an aggressive marketing campaign. In an interview last week, Eisner told the media, “I don't want to have our company be in the railroad
business while people are flying overhead in airplanes.” With Disney's vast media empire consisting of the Disney Channel, ABC television (which includes the highly watched Monday Night Football, as well as the Superbowl next month), ESPN, sports teams (eg. NHL's Anaheim Mighty Ducks), as well as over 300 Disney-affiliated websites and the numerous theme parks and cruise ships, Go Networks has behind it an advertising and promotional juggernaut -- something that, in my opinion, AOL, Yahoo! and other internet portal giants are going experience extreme difficulty competing against. Already, Disney's Epcot Center in Orlando, FL has a large internet exhibit which allow visitors to have their pictures of their Disney vacation to be placed on personal family web pages in Go Network. Also, with ABC (which is
owned by Disney) televising the Superbowl next month (with Go Network tentatively scheduled to officially debut approximately one week before the big game), television commercial advertising of Go Network will capture the eyes of several million viewers. Imagine hypothetically the following example: John Elway (quarterback for the Denver Broncos), is awarded Superbowl MVP. When asked what he was going to do after winning the big game, he says, “I'm going to Disney World! But first, I'm going to check out the stats and post-game highlights on Go Network.”
Go Network's advertising slogan, “Are you ready to go?”, is also very catchy in and of itself. The potential advertising campaign is mindboggling!
MY IMPRESSIONS:
Despite all of the hype, I went to check out the preliminary beta version of Go Network (http://beta.go.com) for myself, something I strongly invite all readers to do. The opening page, with the green traffic light logo, looks very similar to that of Yahoo! The site appears to be very well done, and functions like a true network, with access to numerous links, all self-contained in its portal. In addition, the site was very user friendly and simple to use and navigate. I also found that Go Network to have a very in-depth kids link with Disney generated content, which should help to bolster the idea of the site being the ultimate family web portal.
Furthermore, Go Network was very customizable to its users' web page preferences, thereby further facilitating its usefulness. All in all, I believe that Disney/Infoseek has done a very impressive job with their preliminary version of Go Network, and that this portal, with its power-punch backing of Disney-Infoseek, will indeed become a major player in the internet portal world. |
