Company Town : Spielberg Said to Be Close to Signing Software Deal

Director Steven Spielberg is close to signing a deal to develop educational multimedia software with La Crescenta-based Knowledge Adventure, sources close to the company said Monday. He also plans to make an equity investment in the 2-year-old company.

Based on Spielberg’s skills and reputation alone, the deal would eclipse all of the partnerships forged so far between entertainment and technology in the emerging multimedia industry, members of which are meeting this week at the Digital World conference at the Los Angeles Convention Center.

The partnership would also resolve some of the questions about where the Academy-award winning director and producer plans to channel his well-known passion for technology.

And it would send Knowledge Adventure’s modest profile skyrocketing--if only because of the Spielberg aura.

Spielberg, best known for movies such as “Jurassic Park,” “Schindler’s List” and “E.T.,” is also something of an expert on interactive software.

He owns just about every video game player ever manufactured and has helped design an adventure game called “The Dig,” due out later this year, for LucasArts’ chief, George Lucas.

Multimedia developers who knew of Spielberg’s interest in investing in their field coveted the association not only for the name and the money but also for his renowned storytelling skills and solid grasp of interactive technology--a rare combination even in an industry based largely on those two skills.

Spielberg could not be reached for comment Monday. But in an interview at the Consumer Electronics Show last January, he told The Times that he was there scouting out educational software firms to buy or invest in. He said he was unimpressed with much of the basic math and reading software available on the market and was interested in adding entertainment to educational software.

“There’re all sorts of possibilities in education to use this technology to make it more fun,” he said in January.

Knowledge Adventure officials declined comment Monday. Sources said a deal could be announced as early as today.

Educational software is one of the fastest-growing segments of CD-ROM multimedia software, which combines video, audio, images and text on a shiny disc that looks like a music CD.

Spielberg has said he often judges games and educational programs by how his kids, ages 4 and 7, respond to them. So does Bill Gross, a techno-whiz who says his whose young son helped inspire him to leave his job at business-oriented software maker Lotus Development Corp. to found Knowledge Adventure nearly three years ago.

The two reportedly hit it off when Spielberg paid a visit to Knowledge Adventure last December. The firm is best known for its popular “Adventure” CD-ROM series, whose titles include “Dinosaur Adventure,” “Space Adventure” and “Body Adventure.” Plans for the partnership include adding story lines and characters to the firm’s current titles as well as developing original programs.

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In other interactive Spielberg news, William Morris agent Lee Rosenberg plans to hold a cocktail reception today for technology executives, entertainment industry officials and medical professionals involved in a project Spielberg asked him to put together for his nonprofit Starbright firm and aimed at combining technology and entertainment to invent “therapeutic interventions” for sick children.

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The annual high-tech conference--which brings together about 1,200 from the cable, telephone, computing and entertainment industries, including new-media artists and entrepreneurs--opened with a technical glitch Monday as what was apparently a computer malfunction forced attendees to wait in long lines to receive their admission badges.

But the show went on, and true to form, it prompted some cross-cultural friction among panelists and participants.

MCA President Sidney Sheinberg, who participated in a keynote panel discussion along with International Creative Management Chairman Jeff Berg and IBM Executive Vice President James Cannavino, described the complexities of the new world in one of Monday’s more memorable remarks:

“One of the problems many people who talk about merging Hollywood and Silicon Valley forget is the enormous legal and financial complexities in so doing. It’s a little bit like people from Mars talking to people from Earth--forgetting for the moment who comes from which place.”