Tech Investors Tepid on Disney Deal

Disney's purchase of a majority stake in Infoseek is pretty much a nonevent in this morning's market.
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SAN FRANCISCO -- Investors have not shown much enthusiasm over news that Disney (DIS) - Get Report was finally purchasing a majority stake in Infoseek (SEEK) .

Disney will combine its

Buena Vista Internet Group

with Infoseek and create a single Internet business called

go.com

. A new class of stock is expected to be issued and traded on the

New York Stock Exchange

under the ticker symbol GO. Disney currently owns about 42% of Infoseek. Under terms of the transaction, Infoseek shareholders will receive 1.15 shares of go.com for each of their Infoseek shares. Disney will have a 72% retained interest in go.com following the merger.

Investors do not seem thrilled with the news early today. Infoseek was down 4 5/16, or 8%, at 47 3/16 in recent trading, while Disney was up 5/16, or 1%, at 27 15/16. Traders may be selling the fact of a buyout, as Disney has been rumored to be looking to increase its stake in Infoseek for some

time.

Elsewhere, a positive earnings report from

Ameritrade

(AMTD) - Get Report

this morning was not helping online brokerage stocks.

Ameritrade reported earnings of 5 cents a share for its fiscal third quarter, vs. the 3-cent estimate from

First Call

. Revenue came in at $78.1 million vs. $39.6 million in the third quarter of last year. Ameritrade was lately down 1/8 to 38, and

E*Trade

(EGRP)

was down 1/4 to 39 1/2.

Yet more site problems plagued

eBay

(EBAY) - Get Report

over the weekend. Pages at the online auctioneer's site were inaccessible for about three hours on Saturday due to what the company said were problems with its database server.

TheStreet.com

looked at eBay's woes in a recent

piece. Shares of the company were off 3 5/16, or 2%, at 132 7/16 in early trading.

eBay's ongoing woes come at a time when yet another Internet site is looking to take some of its business away.

Lycos

(LCOS)

said it was beginning online auctions at its

Lycos.com

and

Tripod.com

Web sites today. Lycos was off 11/16 to 106 1/2 lately.

Finally,

Yahoo!

(YHOO)

continued to suffer from the postearnings blues. In early trading, Yahoo! was off 4 1/4, or 2.7%, at 155 3/4. It has fallen more than 40 points since reaching a high of 189 1/4 a day before it bested earnings

estimates.