Walt Disney Co. today announced that it will discontinue the operation of its Go.com portal and convert all outstanding shares of Disney Internet Group common stock into shares of Disney common stock effective March 20. Walt Disney Internet Group will continue to operate under its current management structure as a business segment of Walt Disney Co.

"The Internet continues to be a central focus of our company's business strategy," said Michael Eisner, chairman and CEO. "We believe this action should help us gain greater competitive advantage as we leverage Disney's creative content, brands, and other assets."

"The competitive factors that initially compelled us to establish a separately traded class of common stock tied to our Internet operations have fundamentally changed," Eisner added.

Steve Bornstein, chairman of Walt Disney Internet Group, added: "This is a difficult decision, as it impacts both our employees and Go.com users. However, the Internet environment has continued to shift and change, and therefore our strategies must also change."

The closure of Go.com will affect approximately 400 employees, the majority of whom are based in Sunnyvale, Calif.

A streamlined version of Go.com will continue to operate for a period of time to allow for the transition of its users. The company will continue to operate and support the Infoseek search engine and associated traffic during this time.

Disney is evaluating various alternatives for the Go.com assets, including the sale of the Infoseek search engine and site traffic.

In November 1999, shareholders of Disney and Infoseek approved the creation of an additional class of Disney common stock to reflect the performance of the new Internet business called Go.com--later renamed Walt Disney Internet Group.

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In accordance with the terms of the company's certificate of incorporation, each outstanding share of Disney Internet Group common stock will be converted into 0.19353 share of Disney common stock as of March 20. The conversion is expected to result in the issuance of approximately 8.1 million new shares of Disney common stock.

There are currently 2,086,258,193 shares of Disney common stock outstanding, and an additional 158,509,549 shares of Disney common stock are issuable upon exercise of outstanding options.