Michael Ovitz and his technology investment partner, Yucaipa Cos., are expanding their Internet holdings by taking a controlling interest in Beverly Hills-based Scour.net, which operates a search engine for finding multimedia content on the World Wide Web.
The investment, said to be in the millions of dollars, is expected to be announced today.
This is the second time this month that Yucaipa and entertainment heavyweight Ovitz--who last month formed an electronic-commerce venture dubbed CheckOut.com--have invested in a Tech Coast firm. Last week, the partners made a multimillion-dollar minority investment in GameSpy Industries, an online entertainment site based in Costa Mesa.
More deals will probably follow. Ovitz and Los Angeles-based Yucaipa are looking to build a portfolio of companies that focus on online entertainment and e-commerce, said Richard Wolpert, the former Disney Online president who became a Yucaipa partner in January.
Ovitz and Yucaipa are evaluating about two dozen companies for possible investments, Ovitz said. The partners will take stakes in “whatever makes sense,” he said, but they don’t have a specific number of investments in mind.
Scour.net will operate independently of CheckOut.com. But the two firms will probably link to each other’s sites and enter into other cross-marketing partnerships after CheckOut.com launches this summer, Wolpert said.
In addition, Wolpert and Peter Levin, the partner in charge of high-technology and Internet investments for Ovitz, will join Scour.net’s board.
Scour.net has come a long way since it was founded in a Westwood apartment 1 1/2 years ago by five UCLA computer science students. Its Web site--which searches for audio, video and image files--registers more than 1.5 million page views each day and has logged more than 900,000 unique visitors in the last two months, said Scour.net President Dan Rodrigues.
A large portion of those visitors come from @Home, the service that provides high-speed Internet access via cable television lines. Such broadband services can digest multimedia files more easily than standard computer modems--and are becoming increasingly popular among consumers. That combination bodes well for Scour.net’s growth potential, Wolpert said.
“As broadband starts to come into its own in the next year or two, a tool like this will be more and more useful,” he said.
Rodrigues said the investment will help finance Scour.net’s growth. The 12-person company is planning to hire a few key management executives and move into bigger offices.