Disney Approves Internet Spinoff

In a move that comes as no surprise, Walt Disney Co. (NYSE: DIS) shareholders voted Wednesday to complete a merger with Infoseek Corp. (Nasdaq: SEEK) and spin its Internet assets off into a separately traded company to be called Go.com.

“As computer processing power increases and the advent of broadband enables the streaming of full motion video, the Internet will become a medium for the delivery of entertainment, rather than just data,” said Michael Eisner, Disney’s chairman and CEO. “And thanks to Go.com, we will be well positioned to take our company’s immense range of content into people’s homes in new and intricate ways.”

Position Of Net Strength

Although broadband will enhance the delivery of entertainment, Media Metrix reports that Disney’s online presence already captures 9.2 percent of the domestic Internet audience.

“We are well positioned to capitalize on our broadband future, but our day-to-day service is delivered with practicality and reality in mind,” Ken Goldstein, senior vice president and general manager of Disney Online told the E-Commerce Times. “We want to build guest loyalty even before broadband comes.”

Vote Results

In preliminary results, 63 percent of the outstanding shares — 97 percent of the shares that voted — approved a proposal to amend Disney’s certificate of incorporation to increase the number of authorized shares of common stock to 4.6 billion from 3.6 billion.

This adjustment provides for an additional class of Disney stock: Go.com common stock.

Also in preliminary results, holders of roughly 93 percent of the shares of Infoseek, an Internet search engine based in Menlo Park, California — excluding the shares owned by Disney — voted in favor of a merger with Disney.

Infoseek will be combined with Disney’s Buena Vista Internet Group (BVIG).

Shares of the new common stock are scheduled to become available on the New York Stock Exchange Thursday under the ticker symbol GO.

About The Deal

In July, Disney and Infoseek reached an agreement on Disney’s purchase of the 58 percent of Infoseek that it did not already own, with an eye toward taking the new unit public.

Go.com is an Internet portal that combines Infoseek’s search engine with content provided by Disney’s movie studio, theme parks, ABC TV news and ESPN sports information.