GO.COM NOSE-DIVES; DISNEY INTERNET STOCK OFF 37% IN FIRST FOUR WEEKS.

Byline: Dave McNary Staff Writer

Where in the world is Go.com going?

Walt Disney Co.'s new tracking stock for its Internet assets has been a major flop so far, losing 37 percent of its value since its creation four weeks ago. It began trading at $37.675 on Nov. 18 but closed Tuesday at $23.625, declining 62.5 cents to its lowest close ever.

The company, which is 72 percent owned by Disney, has seen its stock slide amid a red-hot market for many rival Internet issues. But the company has not issued any negative announcements recently and some media analysts believe the decline reflects a variety of factors including continuing skepticism over Disney's management and online plans.

``The stock is being driven down because Wall Street does not have a clear understanding of what Disney's strategy is for Go.com,'' said media analyst Barry Hyman of Ehrenkrantz King Nussbaum.

Others say the sell-off reflects mostly year-end profit-taking along with the tendency of investors to downgrade Internet assets of large companies that are not solely focused on the World Wide Web.

``Part of what Go.com is suffering from is the market perception that views media conglomerates like Disney as being too slow-moving to compete,'' said Katherine Styponias of Prudential Securities. ``I don't think that's the case; it's just the market perception. There has not been any specific news item that would make it trade down.''

Linda Bannister of Edward Jones & Co. noted that many Internet stocks have run-ups during the first couple of days they trade before investors have completely analyzed the company. ``It's also likely that some people that owned it have started taking profits,'' she added.

Burbank-based Disney created the stock following the merger of its Buena Vista Internet Group - including Family.com, Mr. Showbiz, NFL.com and NBA.com and sites related to ABC, ESPN and theme parks - with Infoseek Corp., one of the Web's leading search engines. The publicly held Go.com shares were distributed to Infoseek stockholders as part of Disney's $2 billion buyout of Infoseek.

Media analyst Christopher Dixon of PaineWebber, who issued a ``buy'' rating with a $48 price target last month, said it's probable that many of the shares are being sold by money managers and investors to adjust portfolios prior to the end of the year.

``Of course, I'm disappointed about the price,'' said Dixon, but he stressed that the fundamentals of Go.com are ``very strong'' as the Internet evolves.

``I'm very comfortable for its prospects as the Internet moves from low-speed delivery at 28.6 kilobauds per second to full broadband,'' Dixon said. ``The validity of these long-term strategies will be correct. One of the best ways to take advantage of those changes is through major entertainment companies.''

Styponias said it's difficult to evaluate the success of Go.com at this point. ``Disney is using something like its TV broadcast model, where they're looking to capture as many eyeballs as possible and funnel them to as many sites as they can,'' she said. ``Will it win out? It's hard to say but it's important that they play in the space.''

However, Joseph Butt Jr. of Forrester Research believes the idea of a ``portal'' no longer makes sense due to its costs and increased sophistication of Internet users.

``My issue has been that they have strongly branded properties, so they should take Go and subsume it to those brands,'' Butt said. ``If they want to keep it, they could make it an internal directory. But the best thing would be to let it go gently into the good night.''

CAPTION(S):

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CHART: Go.com's slide