Mouse's Internet venture loses $1 billion
Disney’s Internet arm Go.com lost $1.06 billion in fiscal 1999, the media conglom said in a report filed Friday with the Securities Exchange Commission.
The Mouse House formed Go.com as a separate company three months ago to combine its Internet search engine Go.com — a co-venture with Infoseek — with Disney’s other online assets, which include ESPN.com, Disney.com and ABCNews.com, among other Web sites.
The company also includes Infoseek, after Disney bought the rest of the shares of the Silicon Valley outfit it didn’t already own.
The loss, which includes $956 million in depreciation and amortization expenses, widened from a loss of $991 million a year earlier and includes all of Go.com’s new-media properties.
Revenues for the year ended Sept. 30, rose 8% to $348 million, the report said.
Although much of the negative performance can be attributed to losses inherited from Infoseek, the report proves that even media giants such as Disney are finding it difficult to make money on the Web.
Disney has been on a spending spree trying to attract eyeballs to its Web ventures, something it plans to continue doing.
Go.com’s Web sites are still in “investment mode” Go.com prexy Steve Wadsworth said last week at the PaineWebber Media Conference in New York, hinting that the future doesn’t look much brighter financially, at least for awhile.
With so many properties in its Web basket, another billion-dollar stumble is likely to follow next year, as well.
The report follows Go Network’s fight with Web search service GoTo.com over the similarities of the two companies’ similar traffic-light logos.
Disney said it could lose $2 million to $40 million in branding costs if it is forced to change the icon. A trial is set for March.
A tracking stock, issued by Disney in November to highlight the value of its Internet assets, Go.com has seen its share price fall 29% since its IPO.
Shares fell 88¢ to close at $25 on Friday. It hit a high of $37.69 in November.