Viacom buying Neopets

Deal valued at about $160 million

Viacom Inc., looking to extend its strength in children’s television programming to the Internet, has struck a deal to buy children’s Web company Neopets Inc., the Wall Street Journal reported Sunday.

Deal is valued at about $160 million.

Viacom’s MTV and Nickelodeon have a dominant position in TV aimed at teenagers and children, but the conglom holds a much lesser position with even younger auds.

Neopets, a closely held Glendale, Calif., company, is part of a wave of Internet companies courting young audiences with games, animated characters and news. Membership on the Neopets Web site, which is free, has grown to more than 25 million from 90,000 in 2000.

The deal comes a few months after Viacom Chairman Sumner Redstone promised to invest more money in the Internet as part of an effort to boost the company’s growth rate.

Mr. Redstone’s desire to focus more on high-growth businesses is part of the reason Viacom is splitting in two, separating its slow-growing broadcast TV and radio businesses from its cable channels and film studio. The split, approved by Viacom’s board last week, is expected to take effect early next year.

While online advertising makes up about 60% of the company’s revenue, Neopets is expanding beyond the Web with a line of plush toys sold through Target Corp. and other stores. Time Warner Inc.’s Warner Brothers Pictures is producing an animated feature film based on the Web site’s characters.

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