The new company, dubbed Checkout.com will combine e-commerce with news, streaming audio and video, live events and personalised content, officials said.
Ovitz, who served as president of the Walt Disney after leaving the Hollywood agency firm Creative Artists Agency, is teaming up with Richard Wolpert, the former president of Disney Online.
Wolpert is a partner in charge of Internet and technology ventures for The Yucaipa Companies, a private investment company.
Yucaipa, the single largest shareholder in the Kroger Co. grocery chain, recently acquired the Alliance Entertainment, a distributor of music, videos, DVDs and games, and a developer of e-commerce databases. Alliance runs several Web sites, including the All-Music Guide, All Movie-Guide and All-Game Guide. Alliance's customers include Barnesandnoble.com, Blockbuster , Musicland, and shopping.com
The company will serve as a distributor for Checkout.com, Wolpert said. The new company, which has also backed TalkCity, an online community site, hopes to make even more investments in the Internet space.
"My role at Yucaipa is to oversee a strategy to invest in the Internet," he said. "We're definitely interested in the space we're building up a portfolio."
The new company will combine that Internet interest with Ovitz' Hollywood background, he said, Ovitz recently started his own management agency in Hollywood.
"We all bring different skill sets. Ron [Burkle, Yucaipa managing partner] brings long-term retail and financing skill sets, I bring technology skill sets and Michael brings entertainment experience," he said. "He's going to be helping us out in a variety of ways which overlap with how we market the company as a whole, how we relate with Hollywood."
As for how the new company will compete with the host of firms currently selling music, videos and games online, Wolpert said that Checkout.com would focus on "immersing" the user in "the whole experience." "It's not just a place to buy music or find out about a movie. It's all-inclusive , if you want to find pictures, find audio clips, find web sites anything and everything in the music, game or video space, it's here," he said.