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.
