Buena Vista Internet Group

~ the obituary ~

In 1999 I was fifteen, in Ankara, online down a phone line that cost money by the minute. The thing that died here was never a website I could have visited and lost. It was a share class. You needed a brokerage account that could reach the New York Stock Exchange, which in Turkey in 1999 was not something a high school student had any route to, so the entire product was on the other side of a wall that had nothing to do with language or bandwidth.

Buena Vista Internet Group was the holding name Disney put on its online business while it worked out what that business was. Jake Winebaum ran it as president from March 1997 and moved up to chairman a year later. Underneath the name sat Disney Online and the internet ventures attached to ABC News and ESPN. None of those were failing. What they lacked was a search engine, which is what everybody in 1998 believed a portal needed to have.

Disney bought into Infoseek in June 1998 and took the rest of it in July 1999. The reorganization that followed folded the Go Network, Infoseek, Disney Online and the Buena Vista Internet Group into a single company called Go.com. Disney held seventy-two percent of it. The remaining slice was the part that made this unusual, because it was sold to the public as a stock.

~ the case file ~

~ what a tracking stock actually was ~

A tracking stock owns nothing. It is a class of shares issued by a parent company whose price is meant to follow the reported results of one division rather than the whole business. Holders have no claim on the division's assets and usually little or no vote. The parent keeps the division and keeps the right to undo the arrangement later. What the buyer gets is exposure to a number in a segment report.

Disney's shareholders approved it on 17 November 1999 and the shares began trading the next day under the letters GO. The logic of 1999 made this look clever. Internet businesses were valued on different arithmetic than media businesses, so bolting the online unit onto a company that also made films dragged the multiple down. Give it a ticker of its own and the market would price it like an internet company. The following year the stock was renamed Disney Internet Group, which is the name most of the surviving paperwork carries.

~ the day it died ~

The arithmetic that justified a separate ticker in 1999 stopped existing in 2000. Once internet valuations came down, a share class that tracked a portal losing money to Yahoo and AOL was tracking a loss with extra steps, and the undo clause Disney had kept became the obvious move. On 1 March 2001 the tracking shares were converted into ordinary Disney common stock and the portal business was closed on the same day.

The name Buena Vista Internet Group had already been gone for a year and a half by then, absorbed in the 1999 merger and renamed twice after that. What ended on 1 March was the whole idea it had been built to hold: that Disney's internet business was a thing you could separate out and price on its own. Go.com survived as an address that points at Disney, which is what it had been before any of this started.

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