Thursday, Aug 21, 2008
A once-proud Web-content firm mutates from an editorial powerhouse into a technology backbone -- because that's what its new owner needs.
May 26, 1998 | Starwave began in 1993 as a funky little games company producing celebrity-driven CD-ROMs for Peter Gabriel, Sting, Clint Eastwood and the Muppets. Three years later, it had become one of the biggest names in online content -- producing a number of acclaimed Web sites like Mr. Showbiz, Family Planet, Outside Online and ESPN SportsZone. With a professional editorial staff, Starwave was the rare company at which writers and editors got the chance to be creative online.
Today, that Starwave is gone. In its place is a new Starwave that -- though it still builds Web sites that draw 57 million visitors a month -- is essentially a technology company, deploying geek talent to engineer gargantuan Web sites. Starwave's technology is so good, in fact, that Disney bought the entire company last month, folding it into Disney's fast-growing Internet division, the Buena Vista Internet Group.
Starwave's evolution is not all that unusual in itself; what Internet company hasn't constantly revised its goals in the face of ever-changing Web business plans? But it's also a cautionary tale for anyone hoping to build an empire of independent Web sites featuring original content, as Starwave did. If Starwave's fate is any indication, Internet content companies may have a tough time surviving on their own in a market where big-media behemoths are carving up the Net.
Starwave's original conception as an offbeat Paul Allen project investigating the potential of interactive TV was very brief. The company's second plan, to build creative interactive games, was almost as brief: The CD-ROM industry was already choking when Starwave was formed in 1993, and by 1995 the company realized that spending 80 percent of its budget on those expensive disks was a big mistake.
Meanwhile, the Internet was budding, and Starwave turned its attention to the fledgling online division, which had only just begun building Web sites under brand-new deals with ESPN and Outside magazine. Starwave envisioned itself as a "content house" and staffed its entertainment-news site (Mr. Showbiz) and sports site (ESPN SportsZone) with publishing industry characters: Tom Phillips, former publisher of Spy; Pulitzer Prize-winning journalist Mitch Gelman; New York Post gossip columnist Susan Mulcahy.
"There were a lot of conceptual discussions going on back then -- or we'd have daily sports trivia sessions for about half an hour," says Scott Roesch, a four-year veteran of Starwave and producer for Mr. Showbiz. "That doesn't happen anymore, that's for sure. It was a unity bonding type of thing -- they no longer have time for that."
ESPN SportsZone soon taught Starwave -- and most of the rest of the Web, for that matter -- that information sells. The sports site proved immensely popular (today it gets 24 million visitors a month, placing it among the top 10 most-visited sites on the Web) and by 1997, Starwave had produced a clutch of similar sports sites: NFL.com, NBA.com, NASCAR online and WNBA.com. The formula was simple: Get a great license with the authority in a sports field, build a powerful technology backbone that can grab and post up-to-the-minute sports scores and statistics and fill it in with news generated by your own staff of reporters.
Starwave had always been a sporty kind of place. Wired, the New York Times and the Red Herring all published Starwave profiles that gushed over the foosball tables in the front office, the basketball games at Allen's house, the execs who went jogging together in the morning. That hasn't changed much over the years (though the days of basketball games at Paul's are over, thanks to the sale), but the enormous success of ESPN SportsZone changed the company's direction dramatically. Starwave began to be far more about the perfect code than the well-written story.
"A lot of people went there thinking they were going to do noncorporate creative work online, and there were two periods of fallout," explains one former staffer. "The first was when they discovered this was not about writing feature pieces, this was about information architectures. Some got jazzed -- people with a logical or mathematical bent really got into it. If you didn't make that transition, you either left or were fired. That was a fundamental shift in direction -- asking, what is the Internet business all about?"
"The second switch," the former staffer says, "was when Starwave changed from being a place where you thought, 'I've got a playground in which to experiment with this stuff.' There was a point at which we realized that Starwave was becoming a corporation, a Disney subsidiary."
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