Disney folding Web back into TV

Following a trend among its media industry peers, Walt Disney is planning to fold the online operations of its TV properties back in-house.

By October, ABC.com, ABCNews.com and ESPN.com will be managed under their respective TV parents. No layoffs will occur as a result, but the existing Web site general managers will have dual reporting obligations to executives in their TV counterparts and Walt Disney Internet Group President Steve Wadsworth.

"The objective of the restructuring is to achieve full integration of the Internet properties with their offline business counterparts," said Rebecca Anderson, a Disney spokeswoman. She added that the TV stations would be responsible for "driving the Internet businesses."

The restructuring is not a surprise. Disney earlier this year announced it would lay off the entire staff of Go.com, its Web portal created to compete with Yahoo and America Online. Disney also decided to buy back the existing shares of the Walt Disney Internet Group, which was created as a separately run business to tap Internet stock valuations.

Disney joins a number of prominent media and entertainment companies to create separate online divisions and then hastily disassemble them during this period of belt-tightening. Media giants including Viacom, News Corp., NBC and AOL Time Warner have all taken measures to fold their online progeny back under the control of their offline parents.

Media companies originally created separate online divisions as a way to tap online advertising dollars and to make their own mark on the Internet. But the collapse of online advertising has caused companies to pull back their ambitions and slash costs. As a result, media companies have turned their online efforts into elements of their traditional businesses.

With the scaling back, the Walt Disney Internet Group will become a shell of its former self. Still headed by Wadsworth, the division will now oversee Web sites such as Disney.com, Family.com and Disney's online auction partnership with eBay, Anderson said. Wadsworth will also oversee the technology back-end of all the sites, the online consumer marketing division, online product development and other broadband activities, Anderson said.

General managers Bernard Gershon of ABCNews.com and John Skipper of ESPN.com will remain in their roles. Brian Bowman, the former general manager of ABC.com, agreed to resign as part of Disney's plan to lay off 4,000 employees.