Microsoft, Viacom Announce $500m Ad, Licensing Deal

Viacom and Microsoft Corporation have announced a strategic alliance to collaborate on advertising, content distribution, event promotions and games over the next five years. The agreement includes numerous components, and among them, Microsoft will non-exclusively license long and short-form television and theatrical content from Viacom's cable TV and motion picture business for use on Microsoft properties, including MSN and Xbox 360. Details of the financial agreement were not disclosed, but the companies project the base value of the deal at $500 million in financial considerations and business services over the agreement's five-year length, including revenue sharing, guarantees and licensing agreements. The two companies will also share revenue from the sale of advertising inventory. Under the terms of the agreement, Microsoft's Atlas division becomes the ad server for Viacom's U.S. websites, while Microsoft retains the exclusive rights to sell remaining display ad inventory on Viacom's U.S. websites. Microsoft will also buy advertising on Viacom's broadcast and online networks over a five-year period, and the two companies will collaborate on promotions and sponsorships for award shows on MTV and BET Networks. Finally, Viacom will work with Microsoft on opportunities to become a preferred publishing partner across Microsoft's casual gaming platforms. Kevin Johnson, president of Microsoft's Platforms & Services Division, said, "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."