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Disney Buys Stake In Web Site Operator

Walt Disney Co. said Thursday it had taken control of Starwave Corp. and will team the Web site operator founded by Microsoft Corp. co-founder Paul Allen with ABC News to launch an online news service.

In a competitive twist for Allen, the service would become an immediate rival to MSNBC, a joint online venture of NBC and Microsoft.

It’s another aggressive move into the Internet for the Burbank, Calif.-based Disney. The company announced Monday that it will launch a Web service for children and families called Disney’s Daily Blast.

Disney said it had bought a “significant” stake in Starwave and would run its daily operations. Financial terms were not disclosed. Starwave, a privately owned company that doesn’t disclose profits, has been praised for its creativity in designing Web pages but criticized for loose management.