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05/04 0903 Powerful coalition of partners teams up to fund …
HOLLYWOOD (MAY 4) BUSINESS WIRE – May 4, 1994–Telecommunications giant Bell
Atlantic and The Interpublic Group of Companies Inc., parent of several of the
largest global advertising agencies, along with Kleiner, Perkins, Caufield and
Byers and Technology Partners, to prestigious Silicon Valley venture capital
firms, have joined forces with InterActive Partners to fund and build start-up
companies in the interactive television and multimedia arena.
Interactive Partners is headed by Robert M. Fell, a well-known entertainment
communications investor and entrepreneur, and David S. Morse, a technology
leader who founded and developed the core technology for Amiga Computer as well
as the technology for The 3DO Company's Interactive Multiplayer.
Fell and Morse were both founding directors of Crystal Dynamics, a prominent
game software company which serves as the prototype for future InterActive
Partners companies.
This powerful coalition provides key strategic relationships and direct
funding for the companies emerging in home shopping, electronic games,
education, children's entertainment, gaming, location-based entertainment and
other areas. Initial portfolio companies include VideoStream, The New
Children's Studio and Silicon Gaming.
The equity investment Bell Atlantic and Interpublic will make in InterActive
Partners projects represents a new stage in the story of the convergence of
Hollywood and Silicon Valley.
The strategic partners will be able to provide not only the financing but
delivery systems and paid commercial programming to support the consumer
channels that will distribute interactive multimedia over a digital network to
home TV. InterActive Partners anticipates a large content provider will join
the alliance.
"The telephone and cable companies have been making investments in Silicon
Valley over the last few years. Now, for the first time, a major advertising
entity has joined the inner-circle of players in the multimedia arena," Fell
said. "Interpublic can bring clients to the table early on and help us
determine what kind of new venture would provide the greatest market synergy."
Bell Atlantic has been moving quickly to develop full service networks that
deliver video programming and information over telephone lines. The regional
bell operating company also has been a pioneer in the development of
interactive multimedia TV (IMTV), programming and systems under its Stargazer
brand.
As its Stargazer service comes on line, the company will need content,
designed and re-configured for IMTV.
"We believe many of the most innovative products and services will emerge
from the combined talents of Hollywood and Silicon Valley," said Stu Johnson,
chairman, Bell Atlantic Video Services. "Bell Atlantic's sponsorship of
InterActive Partners is a vehicle to stimulate the market for interactivity and
participate in bringing exciting interactive services to customers."
Interpublic, whose holdings include McCann-Erickson Worldwide, Lintas:
Worldwide, The Lowe Group and Dailey & Associates, is interested in exploring
multiple concepts which will allow the company to develop new forms of
advertising as well as interactive television programming.
"Our role is to look over the horizon and see what new types of technology
can be used by our agencies and their clients to reach their customers more
effectively," said Philip H. Geier, chairman and CEO, Interpublic.
"It's therefore important to be at the forefront of the convergence of
multimedia, interactive television and advertising. Our agencies and their
clients will benefit from this early involvement."
Kleiner, Perkins, Caufield and Byers has invested in 150 technology
companies, including Compaq Computer, Sun Microsystems and Lotus, which have
grown into billion-dollar companies. In multimedia, they were early investors
and active board members in Electronic Arts, The 3DO Co. and Crystal Dynamics.
Technology Partners also made a major commitment to the interactive media
area early on by backing Dave Morse at Amiga Computer. More recently, they
were the founding investors and active directors in Crystal Dynamics,
VideoStream and New Technologies Group, which developed the technology for 3DO.
InterActive Partners plans to "incubate" software creators and content
providers for the interactive market in newly formed companies. The future
interactive market will witness the linking of homes and schools to the
fast-growing "superhighway," the full service network that will carry sound,
video, text and graphics.
"Interactive Partners has an innovative approach to capitalize on the
digital waves. The company has pulled together a cast of strong strategic
partners with interactive technology experience, communications and networking
expertise and immense marketing resources. Their combined talents will help
foster innovative technologies and content for the emerging interactive
marketplace.
"The financial structure allows each member to benefit from the unique
strengths and talents of its partners," said interactive entertainment analyst
John Taylor, L.H. Alton.
The business model adopted by InterActive Partners is similar to that of the
film industry. In Hollywood, it is not unusual for a producer to partner with
a studio that funds development costs for a movie project in return for the
right of first refusal on the film. In this case, Fell and Morse have
conceived of and organized new companies which the alliance will fund and help
build.
"We are looking for talented leaders who have a passion for the convergence
of entertainment, computers and communications," Fell explained. "They may have
a technical background or come from Hollywood, but in every case they will
bring with them an owner's mentality, similar to what Strauss Zelnick, former
president Twentieth Century Fox, brought as CEO to Crystal Dynamics."
InterActive Partners has two offices, one in Silicon Valley, the other in
Los Angeles. Fell and Morse create the fundamental concepts and technology
platforms, organize and arrange for the funding of companies, participate in
the management and direction of those companies and serve as active members of
the board of directors. -0-
NOTE: All trademarks and registered trademarks are the property of their
respective holders. -0-
EDITOR'S NOTE: The following quotes can be attributed to the venture
capitalists in the InterActive Partners venture.
"Our decade-long working relationship with Bob Fell and Dave Morse makes
this a natural collaboration," said Brook Byers, senior partner, Kleiner,
Perkins, Caufield and Byers. "They bring their skills and network of contacts
from the entertainment, media and computer industries. We bring our 22 years
of investment experience."
"Back in the '80s when we funded Dave Morse at Amiga we recognized the
importance of interactive technologies. Our success with Dave and Bob in
launching Crystal Dynamics and VideoStream has led us into the application and
content side of this new industry.
"We believe InterActive Partners will create some of the most significant
companies of the decade," said William Hart, managing general partner,
Technology Partners. Interactive Partners' Current Portfolio Companies
— VideoStream: a company which has developed a unique consumer
interface and delivery system for home shopping via television.
— The New Children's Studio: a company dedicated to the
development of wholesome children's entertainment.
— Silicon Gaming: a venture that will bring the high-quality
graphics and animation of video games to the gaming industry.
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CONTACT: The Bohle Co., Los Angeles
Cynthia Seymour/Holly Zmetrovich, 310/785-0515,
ext. 205/211
or
Bell Atlantic
Larry Plumb, 703/974-2814
or
The Interpublic Group
Barry Linsky, 212/399-8068