Time Warner Invests in Gaia

NEW YORK Gaia Online, a virtual world aimed at teens, said it has received an investment from Time Warner as part of a $12 million round of financing completed last year.

Financial terms of the deal were not disclosed, but Gaia officials said 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 is one of a handful of avatar-filled virtual worlds that are drawing noteworthy numbers of teens and children. The company said the site now reaches 3 million users each month who on average spend an hour per day visiting the virtual world.

While advertising in virtual worlds is still nascent, traditional media companies have become increasingly interested in the medium, given its growing reach and e-commerce potential. Gaia claims to pull in $1 million 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. Those parties, according to CEO Craig Sherman, have been “extremely successful.”

In the coming weeks, Gaia may explore incorporating 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.”