December 19th, 2007
Microsoft lands Viacom as ad partner
The deal is wide ranging, but he most notable part of the deal is that Microsoft’s Atlas platform becomes the exclusive ad serving tool for Viacom’s brands ranging from MTV to Comedy Central to Nickelodeon. Microsoft has been on an advertising tear of late. Viacom joins Facebook, Digg and CNBC as large Microsoft ad partners. And given Viacom’s history with Google it was pretty clear that Sumner wasn’t going to call Larry and Sergey.
While the ad-serving is the big win for Microsoft there are other components to the partnership. For instance, Microsoft will license Viacom’s video content for use on MSN and Xbox 360. Meanwhile, Microsoft will advertise on Viacom’s broadcast and online networks over five years. And the two will partner on games.
Financial terms weren’t disclosed, but according to a statement:
The deal has a projected base value of approximately $500 million in financial considerations and business services between the two companies over the initial five-year length of the agreement. The deal includes a combination of revenue sharing provisions, guarantees and content licensing agreements. The agreements contemplate the potential for expansion of the transactions.
Reading between the lines it sounds like Microsoft giving Viacom advertising and content licensing revenue so it can claim another exclusive ad win. Microsoft’s ad serving technology, Atlas AdManager, was acquired in the aQuantive purchase. As for remnant inventory Viacom and Microsoft will split the revenue.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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