William Morris Launching VC Fund

Focused on "reducing the friction" between Hollywood and Silicon Valley, the William Morris Agency and two prominent VCs - Accel Partners and Venrock - are launching an investment fund focused on digital entertainment, according to the NYT and LAT.

AT&T, an investor in the Endeavor-affiliated Media Rights Capital, is also a limited partner in the fund, apparently looking for opportunities in mobile entertainment and advertising.

Expect the focus to be on technology, not content. Per LAT, the fund "will make investments of less than $1 million in young companies that help foster growth in areas including broadband, wireless, gaming, advertising, entertainment and emerging media platforms."

That said, both Venrock and Accel have invested before in companies producing original content. Venrock has money in National Banana, which was founded by Jerry Zucker to produce and distribute short-form comedy. (Check out the site's wonderfully tongue-in-cheek "About" page link.)

Accel invested in Matt and Ben's Live Planet and On Networks, both also producers of original internet content, as well as in Facebook, which, like MySpace, is a technology company being driven ever closer to admitting it's also a media company and making investments in content.

It will be interesting to see what kind of opportunities this creates for WMA's talent, though finding a Funny or Die for whichever mega-star WMA represents probably isn't the point of the partnership.

In any case, it looks like Sand Hill Road is ready to give Hollywood another chance to demonstrate we understand what a scalable business is -- the difference between YouTube (make billions!) and a web series that 's a hit on You Tube (make thousands!). And given how internet technologies promise to disrupt the oligopoly of big media, that's a good thing no matter what.