New Line Cinema Stakes Net Media Firm

New Line Cinema, a subsidiary of media giant Time Warner, bought a multimillion-dollar stake in closely held online media company Snowball.com as part of a multiyear marketing partnership. Terms of the equity investment by New Line Cinema weren't disclosed. A spokesman said New Line, a producer and distributor of independent films, doesn't get a seat on San Francisco-based Snowball.com's board. It's New Line's first Internet investment. As its audience spends more time on the Web, the company needs to focus on promotions there, Executive Vice President Jim Rosenthal said. New Line, whose recent successes include ""Austin Powers: The Spy Who Shagged Me"" and ""The Wedding Singer,"" also wants to use the Internet to find fresh ideas. ""Clearly, our audience is there,"" Rosenthal said. ""There's also a lot of talent gravitating toward the new media world. We want to develop relationships with them and transform their ideas back to our medium."" Snowball.com's online networks, including ChickClick, PowerStudents.com, and InsideGuide.com, will appear in feature films via product placement and will be advertised on New Line videos. Snowball.com, which focuses on 12- to 29-year-olds, will promote New Line products by posting trailers, interviews, and behind-the-scenes footage on its sites. The companies will join on promotional sweepstakes and prize giveaways, and New Line will receive advertising on Snowball.com sites. ""For this generation, where each individual has their own voice, the attitude and approach New Line takes rings true with them in the offline world,"" Snowball.com chief executive Mark Jung said. ""Having offline partners is extremely important to us to reach the same users with blended content."" Snowball, with offices in Los Angeles and New York, sets up Web sites based on interests and then recruits other sites to become affiliates and add to its content. It recently acquired Vault Network and High School Alumni.com to expand its traffic base. Part of the investment will be used for marketing and e- commerce efforts, Snowball.com said. Snowball.com has also received funds from Walden Media and Information Technology Fund, Weiss Peck & Greer, Whitman Capital, and Worldview Technology Partners. Before the New Line agreement, it had raised about $25 million. Copyright 1999, Bloomberg L.P. All Rights Reserved.