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OnLive, the online gaming service, has hired as its new chief operating officer Etienne Handman from cloud-music service Pandora.

Handman replaces Mike McGarvey, who becomes OnLive’s chief strategy officer. The new hire reflects OnLive’s need to have both a technical executive in charge of operations and someone who has relations with the major entertainment studios, said OnLive chief executive Steve Perlman in an interview.

It also means that OnLive is moving on to a new stage of growth, moving beyond providing a cloud-based gaming service to also offering, at some point in the future, other kinds of entertainment on its cloud service.

Perlman confirmed in December that OnLive plans to stream movies to users, starting sometime in 2011. Handman will help expand into the broader entertainment business, Perlman said today.

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Perlman said that OnLive, a nine-year-old company that started offering its online game service last year, has grown to more than 200 employees and it needs someone with technical know-how to take charge of operations, engineering, and other business units. That will free Perlman up to do other things and it means McGarvey can focus on executing a lot of partnership deals and financial agreements.

Handman has 25 years of experience managing tech companies. During his tenure as COO of Pandora, the music-streamning service grew to more than 75 million users. Perlman said Handman’s knowledge of streaming will be important to OnLive, which also relies on web-connected data centers to stream high-end games to players on a variety of devices.

OnLive investors include Warner Bros., Autodesk, Maverick Capital, AT&T, British Telecommunications, and The Belgacom Group.  Because its technology is potentially disruptive to traditional game retailers, investors recently valued the company at $1.1 billion.

[photo credit: Bob Adler]

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