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WEB—MrShowbiz.com Becomes Part of Other Disney Sites

MrShowbiz.com, one of the oldest entertainment news-oriented Web sites on the Internet, will shut down this fall as the Walt Disney Co. retools its Web businesses and dumps the money-losers. “This is part of an overall restructuring for the Internet group,” said Michele Bergman, a spokeswoman for Walt Disney Internet Group, who would not say how many jobs would be affected by the move or the overall savings expected from the closing of both MrShowbiz.com and its sister site, WallofSound.com. “We will be focusing our efforts on our main Internet sites,” she said. The Disney Internet Group now employs about 1,500, after 535 jobs were cut when Disney eliminated financially troubled Go.com in January. The two sites will be integrated into Disney’s ABC.com site. MrShowbiz.com, a premier entertainment news Web site for much of its six-year existence, features film reviews, contests, trivia games, film clips and sound bites from movies and celebrities. Starwave Entertainment Group, founded by Microsoft Corp. co-founder Paul Allen, sold the two sites to Disney in May 1998 for about $100 million. MrShowbiz.com seemed to flourish in an earlier era when there were few Web surfers and fewer Web sites. Even as times changed and competition became more intense, the site managed to hold its own while other Web sites experienced declining advertising revenue, analysts say. “It was the main place to go if you wanted to know about show biz,” said Dan Keen, a Web expert with Media Track, a Web consulting firm in Los Angeles. “WallofSound had its niche before anyone else, but it didn’t last and that’s the nature of the web.” Under Disney’s ownership, the two sites never returned to earlier profitability or status. Keen said competition from a wealth of newer sites, among them Hollywood.com, left the two pioneer sites struggling for advertising revenue. In its early days, WallofSound.com attracted attention with its glossy graphics and myriad music-related content about band reviews, tour dates, music samples and news. Arthur N. Newman, an equity analyst with the investment bank, ABN AMRO, said he is encouraged by Disney’s efforts to consolidate its Internet business and eliminate its non-performing units. “They’ve taken a bath with these Web sites and it’s time to cut them loose,” Newman said. Disney’s ABC.com, however, has remained a solid revenue producer due to its content based on ABC network television shows and their fan base, as well as continuously updated news from ABC correspondents and wire services, Newman said. He added that ESPN.com and Disney.com also enjoy a similar advantage with their programming emphasis. While Disney won’t say how much of a loss it may incur by closing down the two sites, Newman says the news is good for investors who have grown weary of the company’s spotty Internet strategy. In January, the company closed its Go.com site and took a $790 million loss as a result. The site had featured games, contests, news, chat rooms and information on sports and leisure, but could not compete with the likes of Terra Lycos, Yahoo! and others. Disney, which has announced the layoff of 4,000 employees over the course of this year in a number of its divisions, says it’s focusing on its ABC.com site which will now have material from US Weekly Magazine, in which Disney recently purchased a 50-percent stake. “Our objective with the (ABC.com) Web site is to take full advantage of all the resources of ABC, the Walt Disney Internet Group and Disney’s new relationship with US Weekly,” said Dick Glover, executive vice president, Walt Disney Internet Group. ABC.com will officially include its new content, including material produced under the MrShowbiz moniker, in September, Glover said. The MrShowbiz.com and WallofSound.com offices in Seattle will close and content from their brand name will be produced at Disney Internet Group’s North Hollywood headquarters. Lanny Baker, an analyst with Salomon Smith Barney, said the move is in keeping with other recent Disney cost-cutting efforts. “There’s still value in the MrShowbiz name and they’re taking advantage of that,” Baker said. According to company figures, Disney Web sites attract about 17 million visitors a month.

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