Disney takes control of Starwave

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Starwave Corp., one of the Internet's best-known independent content companies, on Thursday surrendered to the lure of a big brand name. Walt Disney Co. will acquire an equity stake in the company and will have operating control. Terms of the deal weren't disclosed, but it's believed Disney paid $100 million for a one-third stake.

Although key executives, including Chairman-CEO Mike Slade, will remain with Starwave, the company will soon undergo a series of management shifts and reorganizations related to the Disney acquisition.

Starwave and Disney will streamline the management of their Internet ventures, including the existing ESPNET SportsZone and an ABC News online venture which was announced Thursday and launching later this month. Tom Phillips, formerly senior VP-products and services at Starwave, was named president of the ABC News/Starwave venture, which will likely be named the ABC News Internet Partnership, according to Rich LeFurgy, Starwave VP-advertising and marketing. The ESPN/Starwave venture will likely carry the name ESPN Internet Partnership.

In the past, executives from ESPN and from Starwave sold ads on SportsZone. But in the future, a single ad sales force will support SportsZone and ABC News.com, said Mr. LeFurgy. In addition, the sports league sites that Starwave manages for the National Basketball Association and the National Football League will be managed under the ESPN partnership, he said.

ABC News' online operation will be a formidable presence on the Net. Under an extended agreement with America Online, with which ABC is already a partner, ABC News will be the main TV and radio news provider on AOL, where ABC and Starwave will offer daily multimedia news slide shows.

ABC News will also get premier positioning on the Netscape home page, offering headlines and a link to the ABC News site. In addition, ABC News will be a premier content provider for Netscape's upcoming Communicator component, Constellation.

"Partnering with these two online leaders is going to allow ABC News.com to have the best reach in online media," Mr. LeFurgy said. Starwave will handle advertising on the Web site as well as on the ABC presence on AOL, he said.

Copyright April 1997, Crain Communications Inc.

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