A Palace Parent Fit for a Media King

As part of its far-flung efforts to build a presence in cyberspace, Time Warner late last year launched The Palace, software that allows Netizens to create their own online personas, or avatars, and interact with one another in a virtual, 3-D space.

Now the media giant has decided to spin off Burbank-based Palace Group as an independent company, and chip giant Intel and Softbank, the Japanese computer publishing and trade show powerhouse, have agreed to invest an undisclosed amount in the firm.

Time Warner estimates that more than 100,000 copies of The Palace software have been downloaded from its World Wide Web site (https://www.thepalace.com) and that it’s been used to create more than 1,000 “communities.” But there’s plenty of competition in this fledgling business--including AlphaWorld and Worlds Chat--and the technology is still a bit clunky.

Intel set up a division nine months ago to mentor innovative young technology companies: “New media keeps the [personal computer] exciting, and if the PC is exciting, people will keep using them and we, of course, sell more chips,” explained spokesman Howard High. Mike Maerz, vice president of Intel’s Internet and Communications Group, will serve as chief executive of Palace Group.