Warner Online Launches Web Design, Hosting Service BY CARLOS MARTINEZ Staff Reporter After years of continuing losses, Warner Bros. Online is changing its business model to offer Web design and hosting to corporate America. While the company will continue to produce entertainment content for some of its many Web sites, Warner will no longer seek subscribers for those sites. Instead, the company said it would turn its attention to building advertising support in order to develop a revenue base for its Web entertainment efforts. Jim Noonan, Warner Bros. Online’s senior vice president and general manager, who last year replaced Jim Moloshok, said he is optimistic about the company’s move into Web hosting and design. “We’re looking to tap our skills and expertise and take them out into the market,” Noonan said. Warner Online has a staff of about 200, many of whom have technical expertise gleaned from developing the company’s many Web sites. Since Warner began launching these sites, in 1996, the company has developed state-of-the-art techniques and graphics Noonan believes will attract other companies. Among the sites operated by Warner Brothers Online are the flagship site, Warnerbrothers.com, Looneytunes.com, thewb.com, cartoonnetwork.com, dccomics.com and others. So far, the company has signed three clients: Nestle’s Purina PetCare Co., the U.S. Army and Hyundai Motor Co. Warner Online designed the Purina PetCare site and linked it to its own Warnerbros.com site. A small banner ad on the Warner Web site directs visitors to the Purina Pet Network site. On that site, viewers can see an animated comedy short that features Looney Tunes characters Sylvester the Cat and his nemesis, a bulldog named Hector. Visitors can also access information on pet care and nutrition and view commercials for pet food along with tips from veterinarians. Purina officials would not comment on the service, but Noonan said working with companies like Purina has helped Warner Brothers Online to attract more clients. Among them are the U.S. Army, which contracted with the company to create MissionMax, an interactive site that teaches children about science, math and technology. Other clients like Hyundai have not used the Warner characters on their sites. But even with the advantage of its well-known library of characters, some say Warner may have a tough time attracting clients. Jack Myers, editor of the Myers Report, a media trade publication in New York, said he’s unsure whether Warner Brothers’ new online strategy can capitalize on the studio’s strong brands and characters. “I don’t see it as a good business model,” Myers said. “There are plenty of companies out there that are dedicated to that business that are struggling.” Warner had high hopes for capitalizing on its many characters on the Internet. The company developed original content for its Web sites, including mini-movies with highly sophisticated graphics, hoping that its fan base would fork over the price of a subscription for access to the material. The company even had plans of taking the online unit public, but those plans were quashed in 2000 when the Internet bubble burst. Parent company AOL-Time Warner does not break out the unit’s revenues, but officials concede that the online division has been struggling with losses since its launch. Others have found it difficult, if not impossible, to attract paying customers for their Web content. Nickelodeon Online, a unit of Viacom Inc., has had more success supporting its online efforts by tapping into advertising because it has established a stronger link between its television programming and its online offerings, Michael Skagerlind, general manager of Nickelodeon’s online division, said. “We’ve managed to move kids from one medium to another because we have a wider set of interactions,” Skagerlind said. Nickelodeon promotes its online contests on its TV network and it links games featured on its TV shows to its Web site. The company has also secured a number of corporate sponsors who provide elaborate prizes for participating in the contests and games. The company’s Nick.com site is completely ad supported, and Viacom says it is nearing profitability.
