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Originally published Monday, May 5, 2008 at 12:00 AM

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Brier Dudley

Disney online group a creative engine in Seattle

It's a little opportunistic, but when Disney said it was staffing up its Seattle office, I took the chance to finally learn about its low-profile...

Seattle Times staff columnist

It's a little opportunistic, but when Disney said it was staffing up its Seattle office, I took the chance to finally learn about its low-profile Internet operations center here.

You may not realize that Disney has a pretty big operation here, but it's powering some of the world's biggest Web sites, including the sites of ESPN, ABC and, of course, Disney.com.Disney's presence is also a good comeback to that recurring line about Seattle not having the consumer Web heft of Silicon Valley, but I'll save that one for another column.

It took awhile for the parent company to sort this out, but Disney Internet Group in Seattle is now a central technology center for the whole company. It's responsible for a standard platform and set of components used by all of its Internet properties.

That ranges from the high-definition media player used to view ABC shows online to ESPN's fantasy-sports network to Disney park-reservation systems.

The Seattle office is also developing technology behind Disney's growing collection of online virtual worlds, games and mobile content. It's also building and running ad systems that now serve a billion ads a day to Disney's various online properties.

"The creative engine's terrific — you want to be able to extend that culture and that creative engine, bring it into the technology world wherever you can," said Bud Albers, a veteran of several large area online companies who became Disney Internet Group's Seattle-based chief technology officer in December.

A native of the St. Louis area, Albers was earlier chief technology officer at drugstore.com, Getty Images and MediaNet.

"The overarching mission is to let the guest consume, and let our customers and the fans of our characters and our franchises be able to get access to the property in whatever form they want, whenever they want — time-shifting, place-shifting, any type of access — and it depends on what type of content," he said. "It is definitely convergence world."

Albers is on a recruiting binge, trying to grow the 300-person office to 400 over the next year.

Disney's also working with a consulting firm to figure out whether it ought to become an enterprise software company and start licensing some the technology developed here.

The story of how Disney came to have an outpost in Seattle is complicated, but it was key to the region's early and important role creating the sort of media sites now blurring the line between television and the Web.

It began as Starwave, a digital-media startup funded by Paul Allen in the early 1990s, back when he threw serious money at crazy ideas and before he was burned by his investment in Charter Communications.

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Starwave started out making CD-ROMs and eventually began developing online media sites. Some were created from scratch, like the Mr. Showbiz entertainment site, and others were built in partnership with content companies such as Outside magazine, ESPN and ABC News.

With Allen's open checkbook and no rush to turn a profit, Starwave lured stars from the content and software worlds to Bellevue and began staking out the future of online media.

Fewer than 20 Starwavers are still there. Others have gone on to start their own companies or play big roles at companies including Amazon.com, CNN and Google.

"It was like a little breeding ground for high-tech people," said Alex Alben, a Starwave veteran who is now vice president of Pluggd, a startup in Pioneer Square.

Starwave itself was a celebrity back then, the subject of glowing stories in the national media, another high-flying, visionary pre-dot-com Seattle company mentioned alongside Microsoft and Amazon.

Never left

Meanwhile, Disney acquired ABC in 1995, launched its first Web site in 1996 and invested in Starwave in 1997. A year later, in 1998, it bought Starwave outright for about $100 million, according to unconfirmed reports at the time.

Then things got messy. Caught in the portal craze, Disney wheeled and dealed and consolidated its online properties under a subsidiary called Go.com that lost $1 billion in 1999.

Yet the company became a pillar of Seattle's Internet industry during the boom, especially after it moved from Bellevue into the Smith Tower, joining the cluster of Web companies in Pioneer Square.

After the dot-com crash, you stopped hearing so much about the Disney Internet Group's Seattle offices.

But Disney never left, and the parent company eventually sorted out its Internet strategy.

Online ventures are actually a top priority of its current chief executive, and the company is once again pouring resources into its Seattle technology shop.

That continuing focus is one reason Disney's doing so well with its online properties, according to Rick Martinez, one of a dozen or so Starwave employees still with the company.

Martinez, who joined right out of Washington State University, is now vice president of technical operations.

"We're largely ahead of the game now because even through the dot-com bubble burst, Walt Disney didn't take its eye off the Internet. A lot of companies had to retrench," he said.

Smart choices

It also seems Disney eventually made smart choices about which technologies it should build and run itself.

Instead of simply outsourcing or forming a big alliance with a single tech company, it bought Starwave and used its expertise to build its own platform and tools.

When I asked Albers about Disney finding the right mix of build vs. buy, he said the needs have evolved.

"What you had to do in 1999 and what you have to do today are different things," he said. "Where we're going to be unique are the places where we absolutely can delight our guests or our audience. The further out you go to the audience, the more unique you are, the more you want to control that experience, still leveraging new technologies and things off the rack wherever you can get them."

In some ways the company has come nearly full circle. It's back to building independent Web sites for Disney, using a common platform and reusable components. It's even using some of the same tools that Starwave originally built, including its content-management system.

The difference is that instead of having the creative talent down the hall, the content is coming from Disney, ABC and ESPN.

It's also making money — as much money as it was losing in the early days, before anyone knew exactly what they were doing.

$1 billion projected

Disney's online ventures are still a relatively small part of its overall business, but they generated more than $750 million in sales last year and are expected to exceed $1 billion this year.

Disney zigged and zagged and lost a bundle before it found its way online, but maybe there's a message about perseverance and vision for tech and media companies now entering a down cycle.

"If you looked at a lot of the forecasts that occurred during the bubble, the reality's hitting now," Albers said.

"Think of the audiences you can generate when you put a high-definition version of 'Lost' online today. ... It's just going to continue to roll, but we've had to spend a lot of the last decade laying the foundation."

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com

Copyright © 2008 The Seattle Times Company

About Brier Dudley
Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
bdudley@seattletimes.com | 206-515-5687

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