IAC buys virtual fashion site GirlSense.com

NEW YORK, May 20 (Reuters) - Web conglomerate IAC/InterActiveCorp IACI.O plans to announce on Tuesday it is buying StarNet Interactive, parent company of GirlSense.com, a website that lets teenagers design and market virtual fashions.

The Israel-based company will be part of IAC's Consumer Applications and Portals division. The unit also includes teen virtual world Zwinky.com, where members create and dress up Web characters.

Terms of the deal were not disclosed.

Media brands and advertisers use GirlSense to reach an audience of about 13 million registered users, most of them girls 9 to 14 years old. Celebrity-themed boutiques on the site have included Walt Disney Co (DIS.N: Quote, Profile, Research, Stock Buzz) pop phenomenon Hannah Montana and the Jonas Brothers band.

GirlSense members use the site's Web tools to create online fashions, build boutiques and draft advertising for their stores. Virtual money earned on the site by selling clothes can be used to buy other clothes and accessories at other member boutiques.

"Up until now we were just growing our community by ourselves, through word of mouth," GirlSense founder and Chief Executive Cathy Glazer told Reuters.

IAC said it will maintain the site as a separate brand, but sees potential to build promotions that run with its other Web properties.

"Right now it is advertising and media-based," said IAC consumer applications CEO John Park. "There's definitely an opportunity to ... go into the subscription category."

IAC is restructuring its business to focus on Web media and advertising, with plans to spin off four of its other units in August. In recent weeks, the company has purchased Lexico, owner of Dictionary.com, and launched RushmoreDrive, a search engine tailored for the U.S. black community.

The company, run by longtime television and film executive Barry Diller, includes dating website Match.com and search site Ask.com. (Reporting by Michele Gershberg, editing by Leslie Gevirtz)