Time Warner buys into teen virtual world Gaia

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Gaia Online, an Web-based virtual world aimed at teens, announced that it has received an investment from Time Warner as part of a $12 million dollar round of financing completed last year.

Financial terms of the deal were not disclosed, by Gaia officials said that Time Warner did not gain any managerial influence over the company as a result of the investment. Just last month, a similar investment from Sony Pictures was disclosed.

Gaia – which its founders liken to an online version of the mall – is one of a handful of avatar-filled virtual worlds that are drawing noteworthy numbers of teens and children. The company says that the site now reaches three million users each month who on average spend an hour per day visiting the world.

While advertising in virtual worlds is still nascent, traditional media companies have become increasingly interested in the medium, given its growing reach and ecommerce potential. Gaia claims to pull in a million dollars per month in the sale of virtual goods. And just recently, the site began hosting virtual viewing parties featuring various movies from the Warner Brothers library, such as The Matrix and Ace Ventura: Pet Detective - parties that according to CEO Craig Sherman have been "extremely successful."

In the coming weeks, Gaia may explore incorporating more marketer-driven games and contests into its signature movie-theater parties, said Sherman. Last summer, the site hosted an event for the movie Nancy Drew that included an appearance by an avatar version of the character.

"We plan to test a variety of different things," said Sherman. "We are trying to figure out what fits consumer behavior and what teens actually want."
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