Walt Disney Co. Internet chief Jake Winebaum is quitting just as Disney enters into discussions to acquire Infoseek, and merge the Internet site with its other online businesses.
Disney said yesterday it may buy the 57 percent of Infoseek it doesn’t already own, valued at about $1.53 billion at yesterday’s close of 43.
One Wall Street source said Winebaum headed for the door because Disney Chairman Michael Eisner indicated he would give the top job at the Internet businesses to Harry Motro, currently the CEO of Infoseek.
Disney may use the Infoseek acquisition to spin off, or issue a tracking stock for, its Internet businesses, separating them from its underperforming entertainment business.
Winebaum said yesterday he is starting a new firm with Earthlink Chairman and founder Sky Dayton, called eCompanies. The firm will develop and invest in Internet companies, and Disney is planning to take an equity stake in the new venture.
“Disney has allowed me to pursue my entrepreneurial bent for the past seven years,” said Winebaum. “I’m thrilled now to have Disney as my partner outside the existing company structure to further pursue this dream.”
Disney, whose stock has been underperforming those of other entertainment companies, has been stepping up its online presence by launching new sites and making acquisitions of smaller Internet companies.
While Disney flirted with the idea of spinning off its Internet assets, the company now says it is considering a plan to issue a tracking stock instead. The tracker would include all the company’s Internet assets, including Infoseek, if Disney acquires the 56 percent of Infoseek that it does not already own.
“Separating Internet assets from Disney’s core business is a way to boost the value of those holdings,” said Linda Bannister, a Disney analyst at Edward Jones.
“It doesn’t have to be a complete separation or spin-off,” she added. “A tracking stock would provide the same service.”
But other analysts suggested that Disney would almost certainly still spin off its Internet assets.
“Essentially, Infoseek is the mechanism for Disney to spin off its Internet assets,” said Chris Charron, an analyst with Forrester Research. “Infoseek is Disney’s key Internet portal play.”
No one will immediately assume Winebaum’s title as chairman of Disney’s Buena Vista Internet Group, though Disney said yesterday that Steve Wadsworth, Winebaum’s key deputy, would be elevated to president of the group. Three other executives are expected to take on broadened responsibilities.
“They’re not naming a new chairman because that’s the job they’re saving for Harry,” said one Internet analyst.