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

To: Oliver & Co who wrote (8587)	12/17/1998 3:00:00 PM
From: Bob Logan	Read Replies (1) \| Respond to of 9343

McDonalds & Disney Deal (involving GO.COM) December 17, 1998 8:30 AM PT McDonald's wants Disney magic Looks to spend millions for Hamburgler have more fun in Mickey's domain. By Jane Weaver, MSNBC McDonald's Corp. has approached Walt Disney Co. to develop a multimillion-dollar, long-term kid's content area on Disney's online site, according to sources familiar with the plan. If the deal goes through, it would be McDonald's most significant Web venture to date. Fast food companies like McDonald's (NYSE=MCD) or rivals Burger King and Wendy's have been reluctant to use the Web as a way to reach their consumers. "The Internet is making companies understand that they need to do integrated marketing," says Evan Neufeld, senior advertising analyst with Internet research firm Jupiter Communications. "But McDonald's is finally getting a better idea how to market across various media." In this case, McDonald's is looking to maximize its wide-ranging partnership with Disney (NYSE:DIS) to include marketing on the Internet, according to people familiar with the discussions. Early AOL advertiser Although McDonald's was an early advertiser on America Online, for the last several years its online presence has been focused on its corporate Web site, mcdonalds.com. "McDonald's has been looking for creative ideas to get more involved with the Internet," says a source close to the negotiations. "They see it as another channel to consumers." A McDonalds spokesman denied the company was working on a content area with Disney Online. When asked whether the fast food company was going to expand its online presence in 1999, the spokesman said, "We have no plans that I'm aware of." A Disney executive declined comment. Extending partnership The McDonald's sponsorship would be an extension of the fast food company's global merchandising partnership with Disney, according to sources familiar with the plan. In 1996, McDonald's and the media conglomerate entered into a massive 10 year global merchandising agreement - worth $100 million a year - in which the fast food company's outlets would hawk Disney movie merchandise. Promotions include Happy Meals and toys tied into the video-only release of "The Lion King II: Simba's Pride," and the current blockbuster, "A Bug's Life." The merchandising deal has been successful for the Oak Brook, Ill. company. McDonald's has forecast earnings per share to be up more than nine percent for the year, a boost largely connected to the popularity of its tie-ins with animated Disney movies, according to analysts. In particular, kids are the consumers McDonald's wants to reach. Logical extension "McDonald's has probably been thinking for some time about how to leverage that relationship on the Web," says Ron Paul, analyst with food industry research firm Technomic. "It's a logical extension." Web content would be developed around upcoming Disney movies such as "Inspector Gadget," scheduled for next summer. There have been some internal conflicts during the discussions. McDonald's would like to use Disney content or characters to drive traffic to its own corporate site, www.mcdonalds.com. Given the control Disney exerts over its properties and animated characters, it's not likely the media company would allow that arrangement, sources say. In 1994, McDonald's hosted one of AOL's first celebrity chats with Garth Brooks and ran a sponsorship with Nickelodeon on the cable channel's AOL site.