The Walt Disney Co. (NYSE: DIS) announced Monday a plan to merge its Buena Vista Internet Group with GO.com partner Infoseek Corp. (Nasdaq: SEEK) and take GO.com public. If approved by Infoseek and Disney stockholders, the agreement will yield Infoseek holders 1.15 shares of GO.com for each of their Infoseek shares. Disney hopes the new stock will trade on the New York Stock Exchange under the ticker symbol GO.
Both companies’ boards of directors have already approved the deal, which is expected to close by the end of year. Once the deal is complete, Infoseek will no longer exist and CEO Harry Motro will have a lot more time to himself. Motro agreed to see Infoseek through the deal’s closing and a post-closing transition period, but he has opted to leave after that. “I believe in this deal and in go.com’s enormous potential for category leadership,” Motro said. “As I’ve had the chance to reflect on Infoseek’s tremendous accomplishments and growth, it has become clear that this is a perfect opportunity for me to take some time off,” Motro said.
Disney Executive Vice President and Chief Financial Officer Thomas Staggs will head a team of executives from both companies through the transition, but Disney has not said who will head the new GO.com after that point.
Full Control for Disney
Disney, which currently controls about 42 percent of Infoseek, will have an approximately 72 percent interest in GO.com after the merger. The combined businesses are expected to generate $350 million in revenues this year, of which nearly two thirds will come from the Internet business. The balance will come from the Disney Catalog, which the company is including in the GO.com business to provide fulfillment and order processing services for the company’s online retailing operations.
As expected, GO.com will also control Disney’s current online operations, including Disney.com and ABC.com. It will also include Disney’s share of several joint ventures it has with Infoseek, such as ABC News Internet Ventures and ESPN Internet Ventures.
“The new structure will integrate management, align interests and eliminate operational redundancies, making it easier to pursue initiatives such as electronic commerce, international expansion, broadband, third-party partnerships and cross-network sponsorship opportunities that will increase the overall strength of the go.com portal,” Disney said. On the financial side, having a tracking stock strictly for the GO.com businesses means Disney has a publicly measurable currency for one of its fastest growing businesses.