Disney Wants Its Own MySpace

It's been the worst kept secret in dot-com land of late. The Walt Disney Co., after nearly a year of rethinking its flagship Disney (NYSE: DISnews) .com site, will soon unveil a major overhaul in an effort to make it less of a promotional site and more of a social-networking site for kids and their folks. Call it the PG MySpace, or at least that's what they're hoping for at Disney (DIS). The official announcement is expected from Disney Chief Executive Robert Iger during a Jan. 8 keynote address at the Consumer Electronics Show in Las Vegas.

Details of the new site have been leaking out for months, mostly through well-placed hints that Iger and Disney's chief financial officer, Thomas Staggs, have dropped to analysts and investors at various conferences. "Will Disney.com be sort of a 2- to 15-year-old portal the way News Corp.'s (NWS) MySpace is to 12[-year-olds] to twentysomethings?" Iger asked rhetorically during a recent New York media conference. "Well, one of the features it will have is a customized point of entry" much like MySpace, he said.

Such customization would enable kids to log on to a world tailored to their needs — with Disney characters and games and eventually with movies to be downloaded from the Disney Channel or other company outlets — while teens could log on to take a shot at a new array of online games that the site will also offer. Iger has said that kids will be able to swap music lists, send messages to one another, and do other things that qualify as social networking in the new MySpace-style Disney.com.

Sticky Sites

It all sounds great, of course. But Disney is playing catch-up in a big way. The Disney sites, which include sites for the Disney Channel, Playhouse Disney, and Toon Disney, have been lagging the sites operated by Viacom (NYSE: RBVnews) 's (VIA) Nickelodeon powerhouse for much of the last few years. Nickelodeon has better mastered "stickiness," or the amount of time that kids stay online to play games, watch videos, and — most important — buy stuff or soak up advertising.

In the most recent numbers from Nielsen//NetRatings (NTRTnews) , kids and their folks stay on Viacom's Neopets site — a social-networking site where some 25 million folks have created their own pets and play games — for a whopping 114 minutes per visit, on average. That compares favorably to the nearly 124 minutes per visit that teens stay on MySpace.com, although MySpace lures a massive 53.6 million unique users a month while Neopets lures 3.4 million a month.

Disney isn't even second on the list in terms of stickiness, with the 55 minutes its Playhouse Disney site keeps kids around, less than the 70 minutes that users of Viacom's Nick Jr. hang around for games, videos, and more. The site also lets kids "mash up" videos — that is, create their own videos by altering videos Viacom has given to them. What Disney does have, however, is massive reach and name recognition that means a hefty audience — if it can manage to hang on to its users. In November, the most month for which numbers are available, Disney's online unit lured 21.4 million users to its sites, including 7.6 million who found their way to the Disney Channel site and 10 million who logged on to Disney.com. Before its relaunch, the site was heavily promoting new Disney movies and TV shows and directing visitors to buy Disney products.

Duking It Out with Nickelodeon

The Disney-Nickelodeon fight is a long and competitive one that started when both were pitching their shows to kids on cable. For years, Nickelodeon has been the top-rated channel in the cable and satellite world among kids 2 to 11, luring more than 1 million. Disney has been coming on strong in recent years, especially in prime time among tweens and 6- to 12-years-olds with shows like Hannah Montana and movies such as The Cheetah Girls.

Now Disney intends to close in or overtake the Viacom kiddy powerhouse online as well. The company has major assets, including a worldwide household name and family-friendly brand. Indeed, Iger says that the company has a list of some 58 million Disney-philes that it can promote to, enticing them to buy tickets to theme parks, Disney cruise vacations, and Mickey Mouse ears. Now it intends to use that same list to get them to log on to the revamped Disney.com site. And, if Disney works its magic right, perhaps they'll stick around.

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