The Walt Disney Co. said yesterday that it had decided to abandon the Go.com Internet portal site, once the centerpiece of its World Wide Web strategy. The company said spending on Internet advertising has slowed down, making it no longer worth trying to compete with AOL (owned by sometimes-rival Time Warner), Yahoo and Microsoft's MSN.
Disney also said it would buy back the shares of the Walt Disney Internet Group, ending its separately traded online affiliate. The company will take a charge of $790 million to write down the value of its Internet assets, and will incur another $25-$50 million in expenses related to closing Go. It will lay off 400 of the 2000 employees in its Internet group, mostly in its soon-to-be-defunct Sunnyvale, Calif., office. Theremaining employees will work on other Disney online properties.
"The advertising community has lost faith in the Internet, and specifically in portals," said Michael D. Eisner, Disney ceo. "We were waiting for something at the end of the rainbow that was looking less and less worth waiting for."
Though Eisner predicted that online advertising would rebound, Go would not have been in a position to benefit. "Seventy percent of the advertising for portals is going to the top three players," he said. "The 10 second-tier portals are left picking up the scraps." However, Eisner said, Disney will intensify its efforts on the Web sites of its various properties, including ESPN.com, Disney.com, ABC.com and ABCNews.com.
Originally meant to mimic Yahoo, the Go portal offered searching and a host of other features, including stock quotes, e-mail and chat rooms. Last fall, Disney refocused Go to emphasize entertainment and leisure searching, areas more closely linked to the Disney brand. But, after a lot of money spent on advertising, promotion and redesign, only about 22 percent of the Go network's traffic is on its portal site.