The alliance calls for Infoseek to pay WebTV at least $26 million over a two-year period. Fifteen million dollars will be paid in advance for the first five quarters, with the rest paid over the last three quarters of the agreement, the companies said.
Under the deal, Infoseek has also agreed to manage WebTV’s advertising sales for online search and content advertising, including banners.
Infoseek said it will receive a guaranteed number of at least 4.5 billion impressions from WebTV and will retain 100 percent of the advertising revenue generated up to a pre-determined amount. Beyond that amount, WebTV and Infoseek will share revenue. Infoseek added that it intends to implement a separate, dedicated sales team
to service the WebTV ad inventory.
Additional financial terms were not disclosed.
Sunnyvale, CA-based Infoseek said the partnership is aimed at furthering its reach to home Internet users, diversifying its traffic
mix, and increasing page views and revenue.
WebTV Networks claimed more than 40 million page views per day during June, July and August of 1998, with the average subscriber dialing in three times a day.
In June, The Walt Disney Co. agreed to purchase a 43% stake in Infoseek in exchange for Disney’s ownership position in Starwave and $70 million in cash. Microsoft completed its acquisition of Palo Alto, CA-based WebTV in August, 1997 for approximately $425 million in cash and stock. Later that same month, Excite was tapped as the primary default Web search service for WebTV Network, extending an earlier alliance begun in 1996.
“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,” said Harry Motro, president and CEO of Infoseek, in a statement. “The convergence of the Internet and television media has the potential to empower the consumer like no other media in history.”
“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,” added Joe Poletto, vice president of advertising sales and strategic partnerships, WebTV Networks.