CBS Invests in Virtual World Developer Electric Sheep

CBS has made an investment in virtual worlds content development and marketing firm The Electric Sheep Company. The company raised $7 million from a group of investors that includes CBS, Gladwyne Partners and individual investor funds, but declined to discuss the amounts coming from each source.

While The Electric Sheep Company has created virtual world environments for networks like MTV and CBS’s Showtime channel, the CBS funding is earmarked for the development of software to track analytics and the user experience within virtual worlds, specifically to gauge exposure to advertising content.

The investment by a major media company in developing virtual world technology is important in itself, according to Sibley Verbeck, CEO at the Electric Sheep Company, as it suggests a future exists for advertisers aiming to reach consumers in the nascent medium.

“This kind of advertising is very different. Really in a way this is an opportunity to create virtual products or services that have… the brand equity building [effect] of actual products,” said Verbeck. “2007 is really the time when you can start getting real benefit out of advertising in virtual worlds. It’s still early in development… but it’s no longer just proof of concept.”

“We are working closely with CBS to figure out what they should be doing with their television shows and how they should bring those into the virtual world, or when or even should they,” he added. “It’s widely understood that the TV market is more segregated amongst more channels than ever before, and competing with people going online,” he said. “It behooves a company such as CBS to think about how they might be involved in these other areas.”

Electric Sheep’s clients have included AOL, MTV, NBC, Nissan and Sony.