October 22, 1998 10:55 AM PDT

Infoseek filing tells Disney story

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Infoseek chief executive Harry Motro today spelled out key details of the company's deal with Walt Disney in a letter addressed to shareholders, according to a filing today with the Securities and Exchange Commission.

The letter comes one week after Infoseek filed its proxy statement and requested shareholder approval of its deal with Disney. In it, Motro spells out the main points of the deal and accounts for the millions of dollars exchanging hands as a result of it.

The proxy gave outsiders their first glimpse at the deal's financial terms, along with the management structure that was reshuffled after the three-way transaction between Disney, Infoseek, and Starwave.

In addition, it outlines the history of how Disney and Infoseek agreed to team up to develop their new search directory and content aggregation service--or portal--Go Network. Go will package Disney and Starwave Web content, as well as Infoseek's search directory, into an offering designed to compete with current portal heavyweights Yahoo, and AOL. The proxy also stated that the portal also will include universal navigation, registration, community, and e-commerce features.

While the launch of Go essentially eliminates Infoseek as a portal, the Infoseek.com Web address will remain. Infoseek executives in the past told CNET News.com that the new Go management team will not dissolve the Infoseek brand, but instead market it solely for its search and directory service. Motro's letter confirmed this.

Among the terms of the deal that were revealed in the SEC filing:

  • Infoseek will acquire 100 percent of Starwave in a stock swap. Infoseek then will own Starwave's stake in ABCNews.com and ESPN SportsZone, its joint ventures with Disney.

  • Disney will purchase 43 percent of Infoseek stock, and will receive a warrant that will allow Disney to become a majority shareholder after three years.

  • Disney will place three executives on Infoseek's eight-person board of directors.

  • Infoseek will purchase $165 million in advertising spots from ABC over five years to promote the Go Network.

    Shareholders will vote on whether to approve the transaction on November 18.

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