Web TV platform Babelgum set up the festival to support international short film and Lee will return as honourary judge alongside the Seattle International Film Festival's artistic director Carl Spence, Rushes Soho Shorts Festival director Joe Bateman and the Annecy International Animated Film Festival's managing director Tiziana Loschi.
The Spike Lee Award, the Looking For Genius Award and the Professional Jury Award will recognise the best in the festival from four categories: general short Film, animation, documentary and the Mini Masterpiece section for newcomers on a shoestring budget.
The winners of the online film festival will be announced in early 2009 and details of the awards ceremony will be announced in due course.
Lee also unveiled the trailer for the festival's first original production Downstream, which centres on the controversy over the development of Alberta's oil sands.
'The results from the 1st Babelgum Online Film Festival proved that audiences from all over the world are eager for new content and that independent film-makers are excited to have found a new place to showcase their work,' Lee said. 'I feel privileged to be part of the Babelgum Online Film Festival and excited that it has the potential to reach more audiences than any other film festival in the world because of the Internet's global reach.'
Richard Recco, winner of the short film category, recently signed with the management and production company Hughes Capital Entertainment and a feature deal is expected shortly.