Disney nets online gain with toy firm

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The Independent Online
THE WALT Disney Company announced yesterday that it had bought a majority stake in the online educational toy seller toysmart.com, the latest manoeuvre in a major overhaul of the company's Internet and publishing interests.

Struggling to combat several months of disappointing financial results and the downward drift of its share price, Disney appears determined to consolidate its online presence and take advantage of its many toy, family and sports-oriented outlets to strengthen and to generate publicity for its new ven- tures.

Analysts said that the company has paid out $20m for a 60 per cent stake in toysmart.com, a relatively new company that was launched last January.

Disney also offered a further $25m in free advertising that will appear on Disney's new Internet arm, Go Network, as well as the television Disney Channel and elsewhere.

Toysmart's website would be integrated with the |Disney-owned website family.com, cross-referencing the educational toy market - worth an estimated $9bn per year - with online advice on parenting and child-rearing.

Earlier this week, Disney also announced the purchase of a 60 per cent stake in soccer.com, one of the world's most popular football-oriented sites, from Daily Mail & General Trust, to bolster its sporting presence online. The Go Network, which was created earlier this summer in a joint venture between Disney and the search engine Infoseek, already includes the US sports broadcasting service ESPN.com, which will now be able to expand more easily into global markets.

Disney is expected to issue a tracking share price for the Go Network in the near future, to underline its commitment to cyberspace.

This flurry of activity follows widespread speculation of major restructuring at Disney to cut costs and streamline its multiplicity of interests.

With net income decreasing in the nine months to June by 22 per cent over the previous year to $1.22bn, the company's share price has fallen from a year's high of $38.69 to around $29 now. Disney has merged its traditional television division with one of its other recent acquisitions, the ABC network, and there has been speculation that it might sell two of its sport interests, the Anaheim Angels baseball team and the Mighty Ducks hockey franchise.

This week it announced the sale of most of its magazine arm, Fairchild Publications, to Conde Nast.

Significantly, though, it will hold on to the Internet rights of such titles as Jane and Women's Wear Daily.