Infoseek Signs $26 Million Deal with WebTV

Infoseek said its $26 million deal with Microsoft Corp.’s WebTV Networks Inc. will allow it to assume management of advertising sales for online search and content advertising, including banner inventory.

Infoseek said it will be the exclusive provider of search and directory services on WebTV. The two-year agreement enhances Infoseek’s exposure to home Internet users, and allows the company to leverage its own sales force while creating a greater presence with advertisers.

“Integrating television and the Web, while delivering a compelling experience to the consumer, is the next step in the new media revolution,” said Harry Motro, president and CEO of Sunnyvale, CA-based Infoseek. “This agreement is a great complement to our pending relationship with The Walt Disney Company and its family of broadcast brands such as Disney, ABC News and ESPN. The convergence of the Internet and television media has the potential to empower the consumer like no other media in history.”

“Infoseek shares our desire to lead the development of interactive television and has an outstanding search product and sales team that complements our own,” said Joe Poletto, vice president of advertising sales and strategic partnerships, WebTV Networks. “Through this relationship, we can continue to focus our own sales efforts on strategic interactive television relationships, while Infoseek extends this new medium to a greater number of advertisers.”

WebTV Networks reported an average of over 40 million page views per day during June, July and August of 1998. Eighty percent of WebTV subscribers have never or rarely been online before and the average subscriber dials in three times a day, the company said..

Under the terms of the deal, Infoseek will pay WebTV Networks $15 million in advance for the first five quarters, and the remainder will be paid over the last three quarters of the agreement. Infoseek will receive a guaranteed number of at least 4.5 billion impressions from WebTV Networks and will keep 100% of the advertising revenue generated up to an undisclosed pre-determined amount. After that, WebTV Networks and Infoseek will share revenue.

Infoseek said it will create a separate, dedicated sales team to service the WebTV ad inventory.

Infoseek recently signed a definitive agreement with The Walt Disney Company to launch a Web portal that combines the best of Infoseek, Starwave, ESPN, ABC and Disney. The finalization of the agreement, which is subject to shareholder approval, will give Disney a minority interest in Infoseek.