AOL starts showbiz division
The online service buys LightSpeed to launch its own entertainment network, headed by former NBC executive Brandon Tartikoff.
As a central part of the effort, AOL's content division, Greenhouse Networks, is acquiring LightSpeed Media. Terms of the cash and stock deal were not disclosed.
AOL's stock finished the day at 47, up five points from Friday's close of 42.
LightSpeed produces entertainment for all media with a focus on episodic Web sites. Its founders created Web soap opera The Spot and GrapeJam, an online comedy show and daily drama.
LightSpeed's current talent and assets will be assumed and managed by Greenhouse. Tartikoff will serve as chairman of the entertainment network.
Tartikoff's relationship with Greenhouse started last fall as a consultant, in which he developed original interactive brands to be launched simultaneously on television, in books, and on the Internet.
As chairman of the entertainment network, Tartikoff will be acting in a very senior role with a direct involvement in day-to-day activities, according to Anne Bentley, AOL's director of communications.
Tartikoff's first project with Greenhouse is already in the works and centers on a series called "Beggars and Choosers" about a struggling TV network. The program will be launched on AOL and also as a made-for-TV movie on Showtime.
"I was too young to participate in the pioneering days of television," Tartikoff said in a written statement. "This is my chance to be there at the dawn of a new form of entertainment."
LightSpeed has about 17 employees who will become Greenhouse workers under the acquisition. They will remain in Los Angeles, where they will "become the foundation for the entertainment network," Bentley said. She said additional employees will be hired as the project grows.
The entertainment network, scheduled to launch in this fall, will feature celebrity hosts, fictional and nonfictional personalities, real-time events, search features, and electronic commerce. "We want it to be entertaining but also a resource of information," Bentley added.
The network will be free to AOL members and supported through advertising and transaction revenue, such as purchases of movie tickets and other goods, Bentley said. The entertainment network will also be seen through distribution deals with ISPs and with companies using push technologies.
The purchase of LightSpeed is the beginning of Greenhouse's expansion to create online communities.
"Don't rule out other acquisitions. AOL wants to create big, broad consumer brands, so potentially going forward, it is very likely" that there will be other deals, Bentley noted.
In addition to the upcoming entertainment network, Greenhouse has plans to create a number of programming networks. Others will feature sports, romance, young adults, health, and women.