For Disney, a Web Site Upgrade Online Makeover Crystallizes a Battle for Creative Control

When the chief executive of Walt Disney, Robert Iger, takes the stage at the Consumer Electronics Show in Las Vegas next Monday, he is expected to introduce the new Web site, which has taken more than a year to redesign.

For years, Disney's Web sites, which include, and, have been among the Internet's most frequently visited.

In November, the company ranked No. 9 over all among sites visited at home and work, according to Nielsen/Netratings, which tracks online traffic.

But critics of, the home page for many of the company's online offerings, say the site is amateurish and hard to navigate. Disney recently showed off the revamped Web site at a company meeting at Walt Disney World in Orlando, Florida.

Some executives who saw it said that it was much improved, with video and interactive features, and sleeker than its clumsy predecessor.

Revamping has been a priority for Iger, who has sought to extend the Disney brand by embracing new digital media. But behind the revamping, analysts and others have said that there is an equally pressing issue facing Iger, one that many entertainment conglomerates could face in the coming years: Who should be running the company's Internet properties?

Disney executives have bristled at the influence that Disney's Internet Group, which oversees most of the company's online ventures, has exerted over film, television and theme park Internet operations. Executives wanted more authority over their own online ventures.

It is not the first time that Iger has grappled with how much autonomy executives should have. In 2005, he disbanded the company's unpopular strategic planning unit, giving more power to the company's individual units.

"It's inevitable that each division will be in the Internet space," said Harold Vogel, a media analyst. "I don't detect that Disney has resolved this. Someone is going to have to coordinate and, at the same time, not quash the creative side. I'm sure there will be political fights over this constantly. It will happen at every media company."

At Disney, the Internet Group is run by a company veteran, Steve Wadsworth. Currently, division executives are expected to work closely with Wadsworth and his team in developing new ideas for their division's online ventures, including those for theme parks, and Wadsworth joined Disney Online in 1995, having spent two years in the consumer products division.

Christopher Dixon, a managing director at the investment firm GGCP who has followed Disney for years, suggested a "structural overhaul" of the group, giving the division heads greater control. "The Internet Group needs to set technical standards, be a facilitator," Dixon said. "One person can't do it all."

A spokesman for Wadsworth said that neither he nor the executive overseeing's revamping, Paul Yanover, were available to comment because they were on vacation. Yanover is another Disney veteran, brought over last May from Walt Disney Parks and Resorts Online, which he headed, developing e-commerce for the company's theme parks. The spokesman said that Iger was also unavailable.

Since 1999, Wadsworth has had direct oversight of several online sites including, and, as well as Disney's cellphone ventures. Iger recently told investors that it could take three to five years for recent investments in Internet video and mobile devices to show much profit, despite the sectors' promise.

Disney Online, which Wadsworth oversees, was founded in 1995. It includes a cadre of games like the highly successful Toontown Online, and plans to release Pirates of the Caribbean Online in 2007. In addition to its own operations, the Internet Group is expected to consult with the divisions on major strategic initiatives. And that has caused tension as division leaders seek to integrate the Internet into their traditional businesses, said Disney executives, who asked not to be named because of their delicate relationship with the Internet Group. Many within Disney consider to be a far superior Web site because of strong oversight by the ESPN management team. As a result, one of the executives said, seeks to operate with little interference.

Last year, the Disney-ABC Television Group appointed Albert Cheng to head a newly formed digital media team and charged him with creating new business ventures for ABC's online unit. He reports to Anne Sweeney, co-chairwoman of Disney Media Networks, who negotiated with Apple Computer to sell the ABC television shows like "Desperate Housewives" on iTunes.

That venture has proved most successful. Not only did other networks follow suit, but ABC has expanded the number of shows available on iTunes while offering ad-supported Disney shows for free on ABC's Web site.

In November, Walt Disney Studios hired a new technology officer to help it deliver Disney movies online, among other things. Studio executives are hoping for more oversight of movie properties, including online movie distribution to homes, which has the potential to be quite profitable.

"That is the holy grail," Dixon said, given Apple's interest in in-home entertainment. Steve Jobs, chief executive of Apple, is now Disney's largest investor after Disney's acquisition of Pixar Animation Studios, formerly owned by Apple.



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