Microsoft and Viacom announced on Wednesday a “broad-based, strategic alliance” for collaborating on several fronts — including advertising, content distribution, event promotions, and games.
Although financial terms were not disclosed, the companies said the arrangement has a “projected base value” of about $500 million in financial considerations and business services.
For content, the deal includes Microsoft’s nonexclusive licensing of content from Viacom’s cable network and movie businesses, which include MTV Networks, Comedy Central, BET, and Paramount Pictures.
The content will be used for MSN, the Xbox 360, and other Microsoft properties. Viacom noted that it already distributes its content to Xbox 360 users through the Xbox Live Marketplace, although this deal adds content from BET.
Advertising, Branding, More
For advertising, Microsoft gets the exclusive right to sell remnant display ads on Viacom’s Web sites in the U.S., and its Atlas division will become the sites’ ad server. In August, Atlas AdManager was obtained by Microsoft as a result of its $6 billion acquisition of aQuantive.
In addition to highlighting the ad-serving component of the partnership, the companies said that AdManager will provide optimization features, inventory forecasting, real-time reporting, and precise audience advertising targeting. AdManager is part of Microsoft’s newly created Advertiser & Publisher Solutions division, which covers mobile, gaming, video-on-demand, and IPTV.
Microsoft will buy ads on Viacom’s cable and online networks over five years. Viacom, whose properties also include Spike TV, TV Land, Neopets, Nickelodeon, VH1, Logo, DreamWorks, and others, offers about 145 channels and 300 online properties in 160 countries and territories.
The arrangement includes several stated intentions for the companies to work together in developing a closer relationship, including working together for Viacom to become a preferred publishing partner for Microsoft’s gaming platforms, and for joint promotions and sponsorships for award shows on MTV Networks and BET Networks.
As one example, the…