Walt Disney Co., the second-largest U.S. media company, has merged its video-game and Internet units to better coordinate the operations.

The Disney Interactive Media Group will be led by Steve Wadsworth, who ran the company's Internet unit, and will develop and distribute entertainment for all digital media, Chief Executive Officer Robert Iger said in an e-mail this week to employees.

Disney wants the divisions to collaborate on future projects because of the growing use of games that connect multiple players over the Internet, Iger said. The company bought the "Club Penguin" multiple-player Internet site last year and has built virtual worlds involving characters and themes from "Pirates of the Caribbean" and "Cars."

Disney Interactive Studios, the interactive entertainment affiliate of The Walt Disney Co., has wholly owned video game subsidiaries Avalanche Software and Fall Line Studio, both based in Salt Lake City.