14 DAY TRIAL // After Viacom slapped Google with a lawsuit for $1 billion for the copyright infringing materials on YouTube, it has now added insult to injury and jumped into bed with Microsoft. The two companies have gotten quite cozy on a strategic alliance covering multiple aspects, but essentially focused on an advertising partnership. Having fallen out with Google, Viacom had, in fact, a limited choice in terms of online advertising, and Microsoft was perhaps the best choice. Even more so, as the deal is not focused exclusively on serving ads, but also on content distribution, event promotions and gaming.
"We are very impressed with how closely Microsoft's business plans complement our strategic objectives. This is a novel and comprehensive partnership that demonstrates the scale of our digital operation and the value of our branded content across all distribution platforms. By taking advantage of industry-leading assets at both our companies, this landmark alliance brings valuable promotional power and increased monetization to our wide portfolio of branded Web sites, which collectively represent the leading entertainment presence online. Microsoft's superior assets and expertise in the ad serving and sales business will drive enhanced value to our digital operations", commented Philippe Dauman, president and chief executive officer of Viacom.
As a consequence of the agreement, Microsoft will be able to license and serve Viacom content via Xbox Live and MSN, including materials from MTV, Comedy Central, BET and Paramount Pictures. On top of this, the Redmond company will be the exclusive provider of ads on Viacom's websites, in the U.S., via the Atlas division. Microsoft will also buy advertising space on the networks owned by Viacom. The exact financial terms of the partnership have not been disclosed, but the two parties estimate that for the five year duration of the agreement the value of the collaboration is approximately $500 million.
"We are delighted to establish this long-term partnership with Viacom. Viacom's portfolio of original content and strong consumer brand connections are a terrific complement to Microsoft's Web, gaming and digital advertising assets. This deal is another milestone in our quest to build a world-class advertising platform to serve the broad needs of advertisers and publishers. If ever there was a 'win-win' partnership across two companies, this is it", added Kevin Johnson, president of Microsoft's Platforms & Services Division.