CBS to invest in virtual designer Electric Sheep

By Kenneth Li

NEW YORK (Reuters) - CBS Corp. will invest in virtual world content developer Electric Sheep Co., the U.S. television broadcaster said on Monday. hoping to expand its reach beyond the living room.

CBS will participate in a $7 million round of financing, which includes existing investors Gladwyne Partners.

Electric Sheep develops 3-D properties in virtual worlds like Second Life, an online society that allows players to create characters that exist in a world they help create.

"We believe that all these virtual worlds represent next generation communications platforms," CBS Interactive President Quincy Smith said in a phone interview last week.

Corporate interest in tapping virtual worlds to market brands and products have surged in recent months as marketers test new technologies to reach consumers who now split their leisure TV-viewing time with the Internet.

Electric Sheep, consultants and designers of properties in 3-dimensional virtual worlds such as Linden Lab's Second Life, have accumulated a portfolio of Fortune 500 clients that include Time Warner Inc.'s AOL, General Electric's NBC and Viacom Inc..

Reuters Group Plc is an Electric Sheep client.

"We're helping (entertainment companies) bring their audiences into Second Life or other virtual worlds and then developing more entertainment experiences for that audience," Electric Sheep Chief Executive Sibley Verbeck said in a phone interview last week.