Go.com Causes Disney's Earnings to Plunge

After a delay of more than two weeks, Walt Disney (DIS) on Wednesday finally reported quarterly results that included those of its Go.com  Internet subsidiary. As expected, Go.com reported substantial losses, though its $0.30 per share loss--before depreciation and amortization--was better than consensus estimates.

That loss dragged down Disney's quarter as a whole to net earnings of $0.16 per share, little more than half the $0.30 of a year earlier. It was Disney's seventh straight quarter of declining earnings.

Go.com recently abandoned attempts to become an all-purpose Web portal to rival Yahoo , instead positioning itself as an entertainment-centered Web destination. While executives were making that decision, however, they held back marketing dollars from the site, causing page views to shrink last fall. Although page views rebounded in January, that kind of slowing momentum damaged Disney on the fast-moving Internet.

Disney has often been mentioned as a possible merger partner in the wake of the deal between America Online  and Time Warner , but CEO Michael Eisner brushed aside such speculation in Wednesday's conference call. He bragged, "We're not skittish about making acquisitions, and we can play ball with the biggest players out there. But we're capable of competing with AOL Time Warner even without making any acquisitions."

Such independent thinking is admirable, but it's unlikely that Disney can really go it alone in the rapidly consolidating world of new media without at least one major acquisition.