MTV Net generation

Music channels, Nick expanding Web presence

MTV Networks said Tuesday it plans to boost its restrained presence on the Internet, launching two new multimedia-heavy Web sites targeted at viewers of its MTV and VH1 music- and Nickelodeon kids-branded cable channels, beginning in June.

Officials from MTV Networks parent Viacom Inc., including chairman and CEO Sumner M. Redstone, said in a press conference that the media giant plans to invest $250 million over the next five years in cross-promotions and on-air ads to push the two ad-supported Web sites worldwide — the music-driven “The Buggles Project” and kid-friendly “Project Nozzle,” both working titles.

Final names for the sites will be announced in the coming weeks.

Central to the plans include Viacom’s recent acquisition of three Internet companies, including Web radio broadcaster Imagine Radio, for which sources say Viacom paid $14 million; Nvolve, Inc., a San Mateo-based Web developer; and Red Rocket, an online educational toy retailer that was formerly part of Viacom’s Simon & Schuster unit.

Of the sites, “The Buggles Project,” set to launch in June, MTV and VH1 will feature customizable streaming audio and video music channels, concert and ticket information, news and reviews, and e-commerce and community features.

The company is in talks with Internet retailers CDnow and Ticketmaster to handle e-commerce duties.

The name stems from MTV’s first musicvideo, for the Buggles’ song, “Video Killed the Radio Star.”

Nickelodeon’s “Project Nozzle” will be a kids-only online service to feature Web tours, auditoriums, bulletin boards and e-mail in a registered community.

The site, to compete with the Walt Disney Co.’s Disney Blast and Disney Channel’s Zoog Disney presences on the Web site, is skedded to launch Sept. 1, with testing slated to begin June 1.

Both MTV, VH1 and Nickelodeon’s current Web sites will continue to operate and are to be linked to the new sites, once they launch.

A separate Internet unit, to be based in New York with a satellite office in San Mateo, will oversee the operation of both divisions. A public offering of the division is possible, Redstone said.

Until now, Viacom has yet to make an aggressive move on the Internet. Its existing Web sites, although popular, feature few interactive services and the media giant also does little to cross promotion of the sites on its cable channels.

“For the first time, MTV Networks will capitalize on the combined promtional power of MTV and VH1,” said Tom Freston, chairman and CEO of MTV Networks. “With the dawn of the broadband era upon us, now is the time to create an all-genre, pure-music destination online.”

MTV Network’s site attracted 1.2 million visitors in December, lured 1.4 million, according to Internet tracker Media Metrix.

Comparably, the Disney Channel, alone, attracted 54 million hits in December, sources said.

“We’re not newcomers to the Internet,” Sumner added, “but these new initiatives represent the foundation of an entirely new business for Viacom. This will have a great economic significance on the company.”

Shares of Viacom rose $1 on Tuesday to close at a 52-week high of $87.75.

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