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).
