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Time for Warner to Get Social

By Rick Munarriz – Updated Apr 5, 2017 at 10:22PM

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OMG stands for oh my Gaia.

Another media giant is crashing the animated online community.

This morning's New York Post reports that Time Warner (NYSE: TWX) is buying an undisclosed stake in teen magnet Gaia Online.

Gaia is a free online community where guests create animated avatars, socializing with fellow members as they explore the site. If you want to lump it into a timeline, it's the place to go after kids outgrow Disney's (NYSE: DIS) Club Penguin yet lack the adulthood to tackle Second Life.

Gaia is sticky. On a typical day, Gaia attracts 300,000 visitors, averaging a whopping two hours on the site. Between chatting in online realms, participating in forums (with a billion cumulative posts and counting), and playing online games, Gaia draws 2 million unique monthly visitors.

The deal with Time Warner will also load up Gaia's online cinema with many of the Warner Bros. action flicks like The Matrix and Batman Returns, available for $1.99 a stream. Since community members are used to earning virtual coins for free and teen pockets tend to have holes, getting kids to open their real wallets to purchase Gaia Cash won't necessarily be an easy sell. Sure, they do just that on the site for some items, but Warner's gratification is likely to be more promotional than financial.

Time Warner isn't the first media behemoth to make a splash in Web-based communities. FOX parent News Corp. (NYSE: NWS) owns MySpace. Viacom (NYSE: VIA) watches over Neopets. Disney acquired Club Penguin this past summer, and is in the process of rolling out virtual communities themed to its Pirates and Disney Princesses lines. Even Mattel (NYSE: MAT) is getting in on the fun with last year's launch of BarbieGirls.com.

It's surprising to see Time Warner settle for a chunk of the company instead of buying it whole, but this may be a tactic to wedge its foot in the door before making a bigger commitment.

It's an important place to be. Even before the writers strike shooed away viewers from their television sets, video games and cyberspace were winning the war for teen eye sockets. Time Warner knows this, of course. It owns AOL. However, now it has a stake in a percolating platform that is truly magnetic to the young audience that all broadcasters covet.

Now, just make sure that nobody tells those kids on Gaia that their hub has gone corporate.

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Longtime Fool contributor Rick Munarriz can't imagine spending two hours on an anime community site, but he's also far removed from the target age group. He owns shares in Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Stocks Mentioned

Time Warner Inc. Stock Quote
Time Warner Inc.
TWX
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$98.20 (-1.31%) $-1.30
Twenty-First Century Fox, Inc. Stock Quote
Twenty-First Century Fox, Inc.
FOX
Mattel, Inc. Stock Quote
Mattel, Inc.
MAT
$19.56 (-1.71%) $0.34

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