News Corp.'s IGN Entertainment acquired Hearst Corp.'s UGO Entertainment, a combination that sets the stage for the eventual spinoff of the gaming and male-oriented entertainment sites.
Together, IGN's and UGO's online properties reach more than 70 million monthly users, who are attracted by the relentless editorial focus on boys and their fixations (UGO has an entire section devoted to "hot girls, celebrities, actresses, sexy photos and videos.")
"This instantly catapaults us to another level and positions us to serve and entertain tens of millions more fans," said Roy Bahat, president of IGN Entertainment.
The merger broadens IGN's spectrum of entertainment offerings, allowing it to reach more men ages 18 to 34. The two groups have complementary properties. IGN's collection of sites include such video game-focused properties as GameSPy and FilePlanet, as well as men's lifestyle sites like AskMen. Similarly, UGO's network includes the game-sites 1up.com and MyCheats.
Under terms of the deal, Hearst Corp. would become a shareholder in IGN and participate in business decisions.
IGN is expected to begin to explore its options, which could include bringing in an outside investor or merging with another company, said one person familiar with the matter who is not authorized to speak on the record.
Unlike Myspace, this digital operation within News Corp. is profitable. Nonetheless, it may be able to achieve greater success as an independent company, this person said.
-- Dawn C. Chmielewski