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DISNEY WISHES UPON A STARWAVE, BUYS REMAINDER OF NET COMPANY
Published May 1, 1998
Disney has exercised its option to purchase Paul Allen's remaining interest in Starwave Corporation. Last year, Disney made an initial investment in Seattle-based Starwave and formed two joint-venture Web sites, ESPN SportsZone and ABCNews.com. Starwave and the two sites will now become part of Buena Vista Internet Group (BVIG), Disney's Internet initiative arm. As part of BVIG, all existing Starwave sites will continue and Starwave's offices will serve as the core technology developers for all of BVIG. Starwave Chair & CEO Mike Slade will become BVIG President, while Patrick Naughton will serve as Chief Technology Officer, and Tom Phillips will run the ESPN sports group (Walt Disney Co.). BVIG Chair Jake Winebaum will continue in that role (HOLLYWOOD REPORTER, 5/1). DETAILS: In L.A., Martin Peers reports that Disney had owned 30% of Starwave, and its acquisition of the remaining 70% is "believed to value" Starwave at "more than" $300M. Although terms were not disclosed, Allen was believed to have held about 56% of Starwave before yesterday's deal, and "likely walked away" with more than $150M. Peers writes that the pact gives Disney the "ability to group its sites together and offer advertising space in packages across a range of sites" (DAILY VARIETY, 5/1). On Tuesday, before the Starwave deal was announced, Disney Chair Michael Eisner spoke at the Society of American Business Editors and Writers conference and said that his company wants to be "an aggressive competitor on the Internet." Eisner: "Eventually, content will prevail on the Internet just like it's prevailing now on cable [TV]" (OAKLAND TRIBUNE, 4/30).