It’s sibling rivalry time for two of Bill Gross’ Idealab! companies.

CitySearch Inc. and Tickets.com Inc., both developed out of Gross’ Idealab! incubator in Pasadena, will soon be in the business of selling tickets over the Internet to sports and entertainment events.

That turn of events results from a recent agreement by CitySearch to be acquired by USA Networks Inc., the parent of Ticketmaster Group Inc.

Once the deal closes, USA Networks plans to merge CitySearch into Ticketmaster Online, the e-commerce division of Ticketmaster.

While officials with CitySearch and Tickets.com say they will not be direct competitors right away, both companies are positioning themselves to conquer the potentially lucrative online ticket sales market.

“Bill (Gross) has never addressed the fact that we’re in the same field (as CitySearch),” said Jim Caccavo, Ticket.com’s chief executive. “It does seem a bit odd, but I haven’t jumped into the fray. We’re going about our business over here.”

Gross did not return phone calls to discuss the potential competition between his progeny.

Tickets.com, based in Marina del Rey, launched its site in October 1997. It sells tickets online for sports, entertainment events and travel. It secures tickets from brokers, consolidators and the venues themselves, and then sells them to consumers via the Internet.

To build online traffic, Tickets.com is developing a database of information about venues and event schedules, whether or not it sells tickets for those venues. To further broaden its appeal, the site has made deals to publish sports and music news.

A major marketing push is planned in October to promote the company’s new e-commerce system.

Across town, Pasadena-based CitySearch has specialized in creating arts-and-entertainment guides for a growing number of U.S. cities. On the morning of its over-subscribed initial public offering two weeks ago, the company abruptly cancelled its IPO and instead announced a surprise merger with Ticketmaster Online.

Ticketmaster’s parent, USA Networks, will own 62.5 percent of the merged company and will invest another $50 million to fund its post-merger expansion. An IPO for the Ticketmaster Online/CitySearch entity is already in the works, but its issue date will not be set until equity markets stabilize, said Charles Conn, co-founder and chief executive of CitySearch.

“We’re really excited about the Ticketmaster deal,” said Conn. “The market potential for online ticket sales is huge. Ticketmaster Online sales already account for about 5 percent of total Ticketmaster revenues.”

Over its 21-month history, Ticketmaster Online’s sales have risen from $100,000 a month to $10 million a month.

As with other Internet start-ups, however, profitability remains elusive. CitySearch posted a net loss of $36.5 million last year. Numbers for the privately held Tickets.com are not available, but the company is not believed to be making money.

Still, Americans are projected to buy $120 million worth of tickets over the Internet this year for sports and entertainment events, according to Jupiter Communications, a research firm. Next year, online U.S. ticket sales are projected to reach $260 million, as people become more comfortable with making online transactions.

“Tickets are one of those commodities that are amenable to online sales and should become a very profitable market,” said Barry Parr, director of e-commerce strategies for International Data Corp. “People are already used to self-service for tickets by buying them remotely over the phone. Back-end operations already are fully automated, and the retail experience can be extremely frustrating. Instead of waiting in lines or being on hold (on the telephone), more people are likely to be inclined to buy their tickets over the Internet.”

With such tantalizing revenue projections, analysts expect both CitySearch, with its Ticketmaster connection, and Tickets.com, with its easily memorable Internet address, to be significant players. Ticketmaster has an immediate advantage with its high name recognition.

“There is room for some competition in the online ticket sales market, but it will be limited with Ticketmaster on the scene,” said Nicole Vanderbilt, director of digital commerce for Jupiter. “Ticketmaster is a huge presence, and people will automatically be drawn to it when first going online to buy tickets. Tickets.com hasn’t really developed a strong brand name yet, which is a problem.”

The two Idealab! start-ups are not direct competitors for now. CitySearch will sell tickets only for venues and events that Ticketmaster covers. Tickets.com will sell tickets from a variety of sources, and may even purchase blocks of tickets from Ticketmaster in the future, and then resell those tickets online to consumers.

“It’s a fairly natural phenomenon in business that your supplier can become your competitor as well, which will be the case with Ticketmaster Online and us,” Caccavo said. “At the end of the day, ticket sellers just want to unload all of their tickets. There is room for us to work alongside each other.”

Conn also emphasized that the two companies complement each other rather than compete.

“Maybe down the road there will be competition between us, but not now,” he said. “We should be more concerned about getting people comfortable with buying online. We’re in the early days of a market with high growth potential, and everyone involved in this industry needs to focus on being very good to our customers in order to help it continue to grow.”