The only people who really know about GameSpy Industries are the young, fickle denizens of the Internet who live and breathe--and shop--online.
But the buzz among these cyber-youth was enough to convince former Hollywood super-agent Michael Ovitz and Yucaipa, the investment company of supermarket mogul Ronald Burkle, to buy into the small Costa Mesa firm earlier this year.
They think that GameSpy, which makes software tools for finding live entertainment on the Net, is poised to become a key player in the age of high-speed Internet access. The $3.4-million investment--more than triple GameSpy's estimated sales last year--bought Yucaipa a minority interest in the company.
More important, it bought Ovitz and Yucaipa credibility among young consumers.
Hundreds of people vie to get into GameSpy's monthly computer game parties, where attendees spend 72 hours together playing games and listening to live music.
Millions of fans each month flock to GameSpy's Web site, which houses a series of "planets," or online communities devoted to particular titles.
And millions more have downloaded and paid for GameSpy's various software tools, which help people find everything from live Internet radio shows to computer game battles.
Yucaipa plans to incorporate GameSpy's technology into CheckOut.com, an entertainment Web portal set to launch in August.
Not Their First Internet Play
Richard Wolpert, head of Internet and technology ventures for Yucaipa, won't reveal how much Ovitz and Yucaipa Cos. have committed to CheckOut.com, but sources say the figure is in the hundreds of millions of dollars.
Ovitz and Yucaipa have made other Internet plays, investing an undisclosed sum in Coral Springs, Fla.-based Alliance Entertainment, which distributes music, videos, DVDs and games, and taking a multimillion-dollar controlling interest in Scour.Net, a Los Angeles start-up with technology for doing multimedia searches on the Web.
"If we could have bought [GameSpy], or bought a bigger piece of them, we would have," Wolpert said. "They're young, they're taking on some huge competitors, and they still need a lot of internal focus. But the promise is there."
The 3-year-old company's underlying philosophy is that even in today's wired culture, people need each other to have fun on the Net.
"The Internet can be a very impersonal place," said Mark Surfas, 34, founder and chief executive of GameSpy. "I don't care if it's music or movies, radio or games, shopping or EBay . . . anything you have to do by yourself is boring."
